![]() While all due diligence typically takes place at the start of a new business arrangement, what that due diligence requires can vary. Account: Organizations also need to maintain a thorough account of how they will proactively address any potential human rights risks.Prevent and Mitigate: Then, organizations must act in good faith to prevent those risks and/or mitigate any existing or future impacts.Identify and Assess: Organizations are responsible for identifying if their activities might have a human rights impact and assessing the extent of that risk. ![]() While they are human rights-specific, they’re also valuable tenets of any effective due diligence program. This document outlines three principles that organizations can follow to ensure their activities don’t compromise human rights. In 2011, the UN issued its Guiding Principles on Business and Human Rights. ![]() But it’s also a potential human rights issue. The 3 Principles of Due Diligenceĭue diligence is an essential way for organizations to proactively identify risk. Under certain circumstances, due diligence may mean seeking and obtaining outside expertise from attorneys, accountants, insurance agents, financial experts, tech experts or other individuals with professional or special expertise. In addition to having guidance in written form, due diligence calls for boards to cooperate and collaborate with others. Certain issues may be better addressed by using a checklist to ensure that groups or individuals are giving the issues adequate time and attention. What Is the Purpose of Due Diligence?īusinesses need to have written policies and procedures in place. Due diligence means being proactive, rather than reactive, in response to problems. In the general business sense, due diligence means vetting issues that affect the business thoughtfully and carefully.
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