tiktok���˰�

A Due Diligence Policy sets out how an organization investigates and evaluates potential business deals, investments, or partnerships before making commitments. It guides staff through the steps they must take to identify and assess risks, verify information, and make informed decisions that protect the company from legal and financial problems.

In Australia, these policies help organizations comply with key requirements under the Corporations Act 2001 and industry-specific regulations. A good policy covers areas like financial checks, legal compliance reviews, reputation assessments, and operational capability studies. It also explains who's responsible for each step and how findings should be documented and reported.

Your business needs a Due Diligence Policy before entering any major transactions or partnerships. This includes mergers and acquisitions, significant supplier contracts, joint ventures, or when investing in new markets. Having this policy ready helps you avoid rushing through checks when time-sensitive opportunities arise.

Australian companies particularly need these policies when expanding interstate, dealing with foreign investors, or working in regulated sectors like financial services or mining. The policy becomes essential during high-stakes decisions that could impact your ASIC compliance, ASX listing requirements, or exposure to anti-money laundering regulations. It helps protect directors from breaching their duty of care under the Corporations Act.

• Basic compliance-focused Due Diligence Policies cover standard financial and legal checks for everyday business dealings
• Comprehensive M&A policies detail extra steps for mergers, acquisitions, and major investments
• Industry-specific versions address unique requirements for sectors like mining, banking, or property development
• Risk-based policies scale the depth of investigation based on transaction size and complexity
• Supply chain policies focus on vendor assessments, modern slavery compliance, and operational risks

• Board Directors: Approve and oversee Due Diligence Policies as part of their governance duties under the Corporations Act
• Legal Teams: Draft and update policies, ensuring alignment with Australian regulations and industry standards
• Risk Managers: Implement policy requirements and coordinate due diligence investigations
• Department Heads: Apply policy guidelines when evaluating potential business deals or partnerships
• External Advisors: Assist with specialized assessments in areas like tax, environmental compliance, or technical operations
• Compliance Officers: Monitor adherence to policy requirements and maintain documentation trails

• Industry Requirements: Review your sector's specific regulations and ASIC guidance on due diligence obligations
• Risk Assessment: Map out your organization's common transaction types and their associated risks
• Internal Processes: Document existing review procedures and identify gaps in current practices
• Resource Allocation: Determine who will conduct different types of due diligence checks
• Documentation Standards: Establish templates for recording and reporting findings
• Review Thresholds: Set clear triggers for when different levels of due diligence apply
• Technology Tools: List approved platforms and databases for conducting checks

• Purpose Statement: Clear objectives and scope of the policy's application within your organization
• Legal Framework: References to relevant Australian laws, including Corporations Act requirements
• Investigation Procedures: Detailed steps for financial, legal, and operational due diligence
• Risk Assessment Matrix: Criteria for evaluating different types of business relationships
• Roles and Responsibilities: Clear designation of who conducts and approves due diligence
• Documentation Requirements: Standards for recording findings and maintaining evidence
• Review and Update Process: Procedures for regular policy updates and compliance checks
• Confidentiality Provisions: Rules for handling sensitive information gathered during investigations

A Due Diligence Policy differs significantly from a Due Diligence Checklist in both scope and function. While they work together, each serves a distinct purpose in your organization's risk management framework.

• Purpose and Scope: The policy sets out your organization's overall approach and requirements for conducting due diligence, while a checklist is a practical tool listing specific items to verify during an investigation
• Authority Level: The policy is a governing document that requires board approval and sets mandatory procedures, whereas the checklist is an operational tool that can be modified for different situations
• Duration: Policies remain in place long-term with periodic reviews, while checklists are transaction-specific and can be updated frequently
• Legal Standing: The policy forms part of your corporate governance framework and can be referenced in legal proceedings, while checklists serve as evidence of following the policy's requirements