BNEI Set of Tools & Templates

Disclaimer:
This document is a form only and should be modified as necessary to meet the laws of your jurisdiction, your business and
particular factual situations Neither BnEI nor its members or affiliates assumes any le!al liability or responsibility for this form
11. Due Diligence, including Intermediaries Evaluation Process
Due dili!ence is a well"established part of doin! business The process is intended to
ensure that the company fully understands the business of its proposed partner or
intermediary #ie who it is doin! business with$ their business acti%ities and with whom
they are connected
Since it arises from the duty of care that companies owe to their shareholders, failure to
carry out due dili!ence can e&pose a company to claims of ne!li!ence By the same
to'en, the fact that a company has carried out due dili!ence can be a defence a!ainst
certain le!al actions
( senior mana!er should be assi!ned responsibility for the process It should be
carried out on all counterparties identified in the )is' *ap followin! the )is'
(ssessment #see +olicy ,- in this series$ particularly those identified as .hi!h ris'/ It is
also important in re%iewin! bid partners, 01 partners or in mer!er and ac2uisition
situations (n escalation process of handlin! issues that arise from due dili!ence needs
to be set out
Traditionally due dili!ence co%ers financial, le!al, re!ulatory and other statutory matters
Ethical due dili!ence #EDD$ is an e&tension of the due dili!ence process to co%er ethical
issues (s it is not a formal re2uirement, there are no set procedures EDD is best
described as a %oluntary process underta'en by companies to obtain and jud!e
information of an ethical nature as a prelude to a business transaction The process
should therefore pro%ide assurance that the ethical %alues of proposed partners are well
ali!ned with the company/s own %alues
)ecords of due dili!ence outcomes should be 'ept and updated from time to time
especially where any bribery corruption and anti"trust ris's are identified
The followin! pro%ides an e&ample of the e%aluation process that can be used when
conductin! due dili!ence on potential Sales +artners defined below
Step , Do a !eneral bac'!round and corporate culture chec' throu!h for
e&ample web based research, 2uestionnaires to be filled in by both the
Intermediary and their internal mana!er, e&ternal in%esti!ation #if
satisfactory answers are not !i%en in the 2uestionnaire or the Intermediary
is deemed particularly hi!h"ris'$, and references from other clients
Step 3 E&amine the Intermediary/s code of ethics and its implementation
Step 4 5hec' monitorin! and assurance processes around ethical conduct
Step 6 5onsider their policy on responsibilities to sta'eholders
)elease ,- 7 *ay 3-,4
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BNEI Set of Tools & Templates
Definition:
Intermediary: Includes but is not limited to (!ents, distributors, consultants, sales
representati%es, implementation partners, sales partners
Appointment of Intermediaries A Checklist
This chec'list below sets out potential ris' factors to consider when appointin!
Intermediaries +lease note that these factors are simply a !uide and detailed due
dili!ence on each appointment will need to be carried out in accordance with this +olicy
High Risk Factors
Intermediary is8has been in%ol%ed in acts of corruption, e! bribery, e&tortion,
fraud, collusion, money"launderin! or similar acti%ities #e! Intermediary has
been prosecuted, con%icted and8or fined by rele%ant authorities in any
jurisdiction$9
Intermediary has been barred from tenderin! for third party contracts as a
result of corruption9
Ser%ices8wor' to be performed by the Intermediary are not le!itimate or the
Intermediary does not ha%e the capability or resources to perform stated
ser%ices8wor'9 or
Intermediary cannot be fully identified #name, address, le!al entity, main
shareholders etc$ and8or such identify cannot be %erified
Intermediary has no corporate policy for counterin! corruption or refuses to
a!ree to anti"corruption wordin! in draft documentation pro%ided by the
5ompany
Potential High Risk Factors
Intermediary is the subject of alle!ations of corruption9
Intermediary is based in a country where hi!h ris's of bribery and corruption
e&ist at a !o%ernmental8public8re!ulatory authority le%el9
Intermediary is based in a country where !eo"political, socio"economic and8or
security8infrastructure ris's e&ist9
Intermediary is based in a country where trade sanctions8embar!os apply
#whether they are imposed by the :;, :S or elsewhere$9
<amily members of Intermediary ha%e !o%ernment or re!ulatory authority
connections9
Intermediary nominates a third party #or offshore account$ to ma'e or recei%e
payments9
Intermediary re2uires fees8benefits for the wor'8ser%ices which are out of line
with the mar'et norm for the rele%ant sector in the rele%ant country9
Intermediary has failed to pro%ide audited annual accounts for last 4
accountin! years without !ood reason9
Intermediary has a conflict of interest in relation to the project
)elease ,- 7 *ay 3-,4
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BNEI Set of Tools & Templates
Positie Indicators
Due dili!ence has not re%ealed any issues9
Intermediary is already8has been pre%iously appointed by a subsidiary within
the 5ompany #althou!h some updated due dili!ence should be underta'en
from time to time9
Intermediary has well established, !lobal reputation with its own 5ode of
Ethics and (nti"bribery and 5orruption +olicy #or e2ui%alent$ and has hi!h
profile clients9
Intermediary is a member of a multi"national corporation with a well
established reputation with its own 5ode of Ethics and (nti"Bribery and
5orruption policy #or e2ui%alent$9
)eputation of the Intermediary has been independently %erified #e! by
referees or third party ris' mana!ement consultants$9
Independent due dili!ence on the Intermediary and8or country has been
carried out by a ris' mana!ement consultancy and the findin!s are positi%e
)elease ,- 7 *ay 3-,4
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