Due Diligence Consulting
The Need For Due Diligence
The majority of business owners recognize the need for due diligence in every aspect of their business and many individuals are becoming aware of the need for a thorough understanding of the arena being created through and by their relationships with others. This recognition has come about largely because there are many more lawsuits in our courts by plantiffs alleging the defendent did not do a particular thing or take a particular action. To state this very plainly, you are more likely to be sued because you did not do something rather than what you did.
When preparing to make an important decision or action, the best money spent is on determining how much risk is associated with the action or decision. With a due diligence assessment, you have the opportunity to decide if the action is worth the risk. It also prepares you for changes that need to be made or what potential issues may arise in the short term or long term.
Due Care vs Due Diligence
Due care is the act of using reasonable care to protect the interests of an organization or person. Due diligence is those practices that preserve due care. You can look at due care as performing ongoing actvities needed to keep something in good working order – in other words, do what one would normally do in the situation. Due Diligence is the ongoing observation and adjustment of due care.
Due Diligence has a distinct legal meaning but the term has is close to becoming a generic metaphor due to its improper use. Simply put, “due care” is what you do and “due diligence” is what you know concerning “due care.”
Due Diligence Checklist
An often asked request is for a due diligence checklist. Any checklist pertaining to due diligence is troublesome to due diligence consultants and professional investigators due to the fact that firms and individuals may have a tendency to think putting a checkmark in the box is sufficient due diligence. Due diligence may be a legal obligation depending on the circumstance but more commonly due diligence is a voluntary process of thoroughly investigating all aspects of the intended action.
The Bottom Line on Due Diligence
Due diligence is time consuming and often wearisome, frustrating and expensive. It goes far beyond the cursory examination of documents and the casual question and answer dialogues between people. Professional Due Diligence Consultants say a professional due diligence case is best measured by the aggravation, frustration and hours of lost sleep.