By Kristy Grant-Hart
“Wait, they want three months of the CEO’s personal bank statements? Are they insane?” This was a real request to one of my clients via a due diligence questionnaire. When I called to inquire with the requesting company why they needed this, they said that they wanted to ensure that the CEO wasn’t receiving “unusual payments” that could be a bribe.
Due diligence questionnaires are a critical tool for understanding third-parties. But they can quickly get out of control, putting unreasonable burdens on the answering party, and at worst, invading the privacy of individuals in wholly unnecessary ways.
How do you balance the legitimate need for information with the reality that no questionnaire can fully protect the company from the possibility that the third-party will misbehave? Here are three do’s and don’ts when it comes to due diligence questionnaires. [Read more…]