What does it mean to practice due diligence? This is an important topic in modern times, an important concept to follow in terms of the world of politics, the world of big business and foreign transactions, the financial sector in all aspects, as well as being important in the world of those that are combating and investigating cases of international and regional corruption. But still, what does it all mean. I was not wise to this concept until I started looking up all these subjects on Google.
And the more I read about it all, the more I could see the evidence of the times in my life wherein I myself failed to practice due diligence, I realized the importance of the concept and I have the negative as well as the positive consequences when one is compliant, or not compliant with performing the procedures. Quite simply due diligence means to know what you are getting into, what you are purchasing, from whom you are purchasing, and with whom you are becoming involved. For all those aspects of any kind of transaction, have far reaching implications and effects on the entirety of one’s life. Think of it in this way, in the regular everyday life, due diligence is just research.
Say one would like to purchase a mountain bike. Due diligence would be the search for perhaps the best deal or bargain, or the search for the most hi-tech, high performance bicycle. They ask friends, they make inquiries into reputable distributors and bike shops. They may want to ensure that they are riding the safest bike possible depending on their level of skill. For if they get taken by a salesman that is not trustworthy, they may be taken advantage of financially, or they may harm themselves on a bicycle they thought was capable of more dangerous of a ride. This is one aspect.
Another aspect is that of guilt by association. Over the years many corporations, be they soda pop companies or the makers of sports equipment and shoes have been found guilty of breaking child labor laws in foreign countries. By setting up shop in countries where the laws are either not enforced or non-existent, they make more of a profit. I will never forget personally, when someone commented on a brand of tennis shoes I was wearing, saying that the company was corrupt and didn’t I know what they were doing? I didn’t, but that didn’t make me any less guilty, for I hadn’t researched in depth enough and that was no excuse. So, in layman’s terms, that is what due diligence means, and those are the consequences of not practicing it always.
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