ABSTRACT
This chapter introduces due diligence concepts and explores what due diligence might look like for International Non-Government Organisations (INGO) in relation to diversion. ‘Check-box’ due diligence, performed after a decision has already been made, is the cause of many poor business outcomes. Due diligence is a tool to inform decision making, evidence the exercise of ‘reasonable care and skill’ in terms of a decision maker’s fiduciary obligations, and to provide a basis for legal defence if required. Policies and guidelines associated with an INGO’s due diligence practices should be thoroughly documented, including when and how diligence should be performed, review and escalation processes, and internal diligence committee mechanisms. Organisational approaches to managing incomplete or unsubstantiated information in a due diligence report is typically dependent on materiality, risk appetite, available time, and budget. A proportionate, risk-based approach will result in the preliminary risk rating for a partner determining the intensity of due diligence.
