How integrity due diligence can

protect your company from a

world of risks

Dr. Onkar Nath

Agenda
 What is IDD
 Why it is needed
 Talking points
 Methodology
 Focal points
 Phases of IDD
 The Strategic Dimension
 Legislation(s)
 Is there any choice?
 Conclusion
 Integrity Due Diligence (“IDD”) is the gathering of
independent information to gain an understanding of the
integrity and corruption risks associated with a third party. It
provides companies with a means to both identify these risks
and confirm (or otherwise) information provided to them by a
third party.
https://www2.deloitte.com/uk/en/pages/financial-advisory/s
olutions/third-party-integrity-due-
diligence.html

integrity due diligence is the act of investigating the

counterparty with whom you are doing business – whether
they are employees, board members, agents or
representatives, customers, suppliers, JV partners or
acquisition targets.
http://www.garancie.com/integrity-due-diligence/what-is-inte
grity-due-
Why it is needed?

“The Days of thinking that suppliers who do

unethical or illegal things can’t hurt you are
over.  You can, and will, be held responsible for
the people working for you in the supply chain,
whether you like it or not.”
Why it is needed?
 Globalization
 Use of technology
Why it is needed?

To improve risk management in the broadest sense

and to support better decisions on new investments
and partnerships in all forms, including acquisitions,
joint ventures, minority investments, strategic
cooperation agreements or supplier-, distributor- or
local agent relationships.
Talking points
 Case of VW and Tesco
 Domestic companies
Methodology for IDD

 Secondary records available in public domain

(includes National and International Media)
 Interview of experts to confirm the information

This leads to development of risk profile

Focal points
Major focal points in this phase of the investigation include:
 The existence of any connections between the business
and any political figures, as well as how the company
interacts with regulators, government entities, etc.
 The nature and strength of any such connections and
whether any of those connections have been leveraged
for the benefit of the company
 The extent, nature and credibility of any allegations
made against the company or its key principals relating
to bribery, corruption, money laundering, large-scale tax
evasion, fraud or asset stripping
 Any alleged connections between the company and
organized crime or terrorist groups or broader risk of
exposure to such groups
Phases of IDD
The Strategic Dimension

Passed due-diligence checks without concern.

Further action or investigation is required.
Area failed due-diligence checks. 
Legislation(s)
Is there any choice?

 substantial legal penalties

 reputational damage
 litigation exposure and
 financial losses through fraud.

Understanding the risks of doing business and

learning how to prevent or mitigate these risks
— is vital to informed, effective transaction
decisions.
Conclusion
Corporations and institutions can attain a strategic and
competitive advantage by pursuing an integrated
approach to integrity due diligence. 
By assessing the trustworthiness and reliability of
customers, business partners and any third parties,
organizations ensure the fulfillment of compliance
requirements, whilst concurrently facilitating a
concerted effort to combat money laundering, fraud
and corruption.

integrity due diligence is an essential risk prevention

and risk mitigation tool which will add value to any
strategic decision making process.
 Dr. Onkar Nath
dronkar@yahoo.com

CISSP(USA), CISA(USA), CISM(USA), CloudU

CFE(USA),CNSM(India), CAIIB(India),IPIAM(USA),
CCSK, IDLA(USA), ISO 27001 LA, ISO 22301 LA,
BS 25999 LA, M. Sc.(Maths.), PGDCM, PGDHRD,
PGDIM, PGDMM, PGDFM, MBA (HR),
Ph.D.(P.U, India), Ph.D. (AMSE, France),
FRAS(UK), FAMSE(France), FUWAI(India)
Thank You