Due diligence on partners

Due diligence is the process of finding out who you are really dealing with before you rely on them. It is one of the six adequate procedures principles, and for third parties it is the control that matters most.

What due diligence looks for

Before engaging an agent, introducer, or significant supplier, the organisation should establish some basics. Who owns and controls the company, including the ultimate beneficial owners rather than just the named directors? Do they have a real trading history and the capability to deliver the service they are being paid for? Do they have any history of corruption allegations, sanctions, or legal trouble? Are they connected to public officials, or to anyone involved in decisions the organisation cares about? Is their fee in line with the market for the service described?

Risk-based, not one-size-fits-all

Due diligence should be proportionate. A stationery supplier in the UK needs little more than standard onboarding checks. An introducer promising access to government contracts in a market known for corruption needs deep scrutiny: independent background checks, interviews, references, and clear written justification for their role and fee. The higher the risk, the harder you look.

Not a one-off

Circumstances change. Ownership changes hands, new principals arrive, and a partner who was clean at onboarding can develop problems later. Higher-risk relationships should be reviewed periodically, and any red flag during the relationship should trigger a fresh look.

Your part

If you are asked to engage a third party, do not treat due diligence as friction to route around. Start it early, answer the questions honestly, and escalate anything you cannot explain. If a prospective partner resists reasonable questions about ownership or fees, that resistance is itself a finding. Legitimate partners expect these checks and pass them without drama.