Addressing (Possible) Business Partners Past Misconducts

“Due Diligence results are not what we were hoping for. What should we do?”

I have heard this question many many times as anti-corruption due diligence is getting extremely important these days. Answering  is not an easy task since there are countless cases and possibilities to take into account and must be assessed on case by case basis.

In general, we should clarify whether your – potential – business partner is an organization or an individual. 

Organizations are made by human beings, with their strengths and weaknesses, therefore, none of them, is, in principle, immune from bribery and corruption. That said, it is crucial assessing how the organization reacted to such challenge.

Has the company taken all the necessary steps to stop corruption, and, possibly, preventing it?

The question above is the most important when it comes to business relationships as you don’t want to be associated with an entity which doesn’t take compliance seriously.

Internal investigations, contract termination, disciplinary measures and reporting are the most common ones on this regard and partnering up with the best known corporate intelligence companies is definitely an added value.

Obviously I am not going to endorse a specific provider here, however, there are many companies out there able to help an organization to get  back on track. As usual, evaluate according to your needs.

If such steps have actually been taken, you can be fairly confident, but, needless to say, you should always protect your organization with ongoing due diligence and ad hoc contractual clauses. On the latter point you can read Protect Your Business From Corruption Risks with these Contractual Clauses

Different, and slightly more difficult, if we are talking about an individual, a consultant, for instance.

You should not engage in business activities with individuals with records if this person is able to get obtain business on your behalf,  plain and simple.

Unlike companies, individuals don’t have a compliance program nor an internal structure able to prevent corruption.

I know this may sound harsh but, as a business, you have no obligation in this sense, besides I’m sure you can find plenty of other equally qualified professionals without risking your reputation, this is what you need to take care of.






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Michele La Neve

White Collar Crime Attorney at Whitecotton Law Dedicated to Helping Clients Overcome Unforeseen Business Risks.

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