Third-Party Risk leaders and Chief Compliance Officers face multifaceted challenges in corporate investigations and due diligence. These processes are not just about gathering data; they demand a thoughtful blend of advanced technologies, human insights, and strategic decision-making.
In a recent webinar hosted by Sylwia Wolos (Chief Strategy Officer at Ground Truth Intelligence), two experts – Elisabeth Wiramidjaja (Senior Investigator in the Integrity Vice Presidency at The World Bank) and Alexander Keselica (Risk, Compliance and Assurance Director at BT Group) – shared their insights on addressing the challenges of modern corporate investigations effectively.
Below is a summary of the practical advice they offered.
1. Understand the Purpose of Each Process
One of the foundational steps in corporate investigations and due diligence is recognising their distinct purposes. Due diligence is forward-looking and focuses on identifying risks before entering a partnership, transaction, or agreement. In contrast, investigations are retrospective, aiming to uncover the facts surrounding specific allegations or incidents. Understanding these differences ensures that the right tools and methods are used for each situation.
2. Use Technology Thoughtfully
Advanced tools, such as OSINT platforms and AI-driven solutions, have revolutionised the way information is gathered and analysed, providing unparalleled speed and efficiency when the data is digitally accessible. These tools can process vast amounts of public data, uncovering critical insights that might otherwise go unnoticed. While manual analysis remains valuable for adding context, technology significantly reduces the time and effort required, making it an indispensable component of modern investigations
3. Combine Public and Human Intelligence
Effective investigations often require a mix of open-source intelligence (OSINT) and human intelligence (HUMINT). OSINT provides readily accessible public data, such as company records, media reports, and online profiles. However, HUMINT offers the deeper, localised insights needed in jurisdictions where public information is limited or unreliable. Each method has its unique value, and it is often the combination of both that yields the most thorough and reliable results.
4. Verify the Reliability of Sources
Not all information sources are created equal. Public records, while valuable, can be incomplete or biased, especially in regions with limited transparency. Cross-checking findings from multiple sources helps validate their accuracy. When using new HUMINT providers, it is advisable to start with smaller, less critical tasks to build trust and assess the quality of their work.
5. Adapt Strategies to Regional Differences
Data accessibility and privacy regulations vary widely across regions, posing challenges for investigations and due diligence. Professionals must familiarise themselves with local laws to ensure compliance and avoid potential legal issues. Partnering with regional experts can be invaluable, providing the necessary insights to navigate jurisdictional complexities effectively.
6. Keep Things Simple When Appropriate
Not every question requires extensive research or complex tools. Sometimes, straightforward actions such as conducting a site visit can provide clear answers quickly and cost-effectively. For example, verifying whether a company’s listed address corresponds to an actual office can sometimes reveal more than hours of online research, saving you both time and money.
7. Plan for Missing Data
Even the best tools and methods cannot provide a complete picture in every case. Gaps in data are inevitable, particularly in jurisdictions with limited public records. Addressing these gaps requires a combination of approaches, including leveraging HUMINT and contextual analysis to fill in missing pieces and make informed decisions.
Conclusion
The key to effective corporate investigations and due diligence is combining advanced tools, human insights, and strategic approaches. By adopting this balanced approach, TPRM and compliance leaders can navigate the complexities of investigations, make informed decisions about solutions, and strengthen their organisations for sustained success.
Keep an eye out for more insights and practical advice in our upcoming articles and webinars.