Due Diligence
Tuesday, November 08, 2016
Due diligence is defined as “… reasonable steps taken in order to satisfy a requirement”. Which basically means ‘required carefulness’.
It involves the investigation of a business or person, prior to signing a contract, to establish appropriateness for appointment.
It’s not a legal requirement, but more a ‘doing everything possible’ scenario for protecting you, or your company’s best interests. It allows you to make an informed decision, with reasonable care and intelligent judgement.
So why does due diligence so frequently lack substance and let us down?
The reason is that there are no unquestionable guidelines as to what it means or entails. It’s all down to our individual judgement.
And, recently, there’s been a lot of talk about how successful due diligence is…
Damian Collins, acting chairman of the Culture, Media and Sport committee, said… "What did the FA do to satisfy themselves that all those past matters were resolved and there was no reason to have any concerns at all about appointing Sam Allardyce? - They've taken action following the Telegraph investigation and the FA could rightly say 'we didn't know he was going to do that and we've taken action swiftly', but given that Sam Allardyce had been the focus of previous allegations, did they satisfy themselves that this was a sound appointment, and that his appointment would be unlikely to lead to reputational embarrassment or damage to the FA because of something that may come out? Given the allegations that had been made in the past, I think that what people would expect is that some sort of due diligence would be done to make sure that this is a sound appointment. The England national coach's affairs are under a lot more public scrutiny than a normal Premier League manager."
When is enough, enough?
This all relates back to a blog I wrote a while ago about the definition of ‘everything’. Did the FA do ‘everything’ in their power to make sure that Sam Allerdyce was a suitable appointment to England Manager? Probably not.
If the FA had done ‘everything’ in their power, would the outcome have been the same? Definitely not… because ‘everything’ would have included an expert Forensic psychological assessment.
The problem is that currently, there’s no due diligence… on due diligence.
‘Everything’ has to be redefined and we have to recognize that the guidelines we currently have are not good enough. For anything, let alone football.
We do ‘everything’ in our power to make sure that pilots are safe to take lives in their hands. We do ‘everything’ in our power to make sure that politicians are safe to lead us into the next decade.
But ‘everything’ is changing.
Expert Forensic psychological assessment exposes the failings in our current understanding of due diligence. Mistakes were always going to happen as due diligence has never been good enough.
When it comes to the appointment of the new England Manager – existing due diligence is not enough. Doing ‘everything’ is not enough. Doing more is the only way to prevent this sort of embarrassment from occurring again.
If the FA wants to get it right – once and for all – I’m happy to help.
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