8 Areas of Business Due Diligence & Requirements for Management Compliance Assessment

Do you want your business to benefit from contracts with the government, international organizations, and established corporate companies? If your answer to this question is Yes, then you must demonstrate higher levels of commitment to compliance with all applicable laws, rules, and regulations. You must follow the highest standards of business ethics.

Your company and all your business partners must be ready to take responsibility for ethical behaviour. You have to comply with all applicable laws and regulations in your country and respect international law where it is required.

These responsibilities include appropriate safeguarding measures and being vigilant in mitigating the risk of ethical and compliance violations and reporting any violations through proper channels.

The starting point is for you to ensure that employees are an integral part of upholding high standards and you should be clear with your business partners on doing the same.

Below is a summary of the key area of interest in line with compliance with all applicable laws, rules, and regulations, and by the highest standards of business ethics. Many times, the contracting agency will send a tool with questions set out and you have to sign the self-declaration at the end.

  1. Organization Details

This section of the due diligence assessment requires you to provide the following information for your organization:

  1. Registered name of the organization (you have to provide evidence of incorporation e.g. certificate of company incorporation)
  2. Registered company number / or relevant country registration Documentation. You have to include a copy of the company registration certificate.
  3. Registered office address which includes country of registration, Type of organization, for example, private limited company, Limited Liability Company (LLC).
  4. Head office DUNS number (if applicable), and Company website address or URL where details about your business can be accessed online.
  5. Registered VAT number (if applicable) issued by the relevant tax authority. In Uganda, it is issued by the Uganda Revenue Authority (URA).
  6. Name of Managing Director / CEO. This section may also require key people in your organization. You also need to know that in some cases, a criminal record check for relevant convictions may be undertaken upon contract award.
  7. You may also be asked to list company board members (if applicable), Parent company name (if applicable), names of any affiliated organization (s), and the number of employees in your organization.
  8. It is also in this section where you are asked to provide on the state whether you have the most recent year of financial audited accounts/reports. You will have to include evidence e.g. copy of accounts/reports
  1. Safeguarding Policies, Procedures, Practices, and Systems

This section requires you to confirm if your organization has policies in line with safeguarding in place and require evidence of policies in place. These may include:

  1. Child Protection (Evidence of policies will need to be provided at the contract stage)
  2. Safeguarding against sexual exploitation, abuse, and harassment with required
  3. Modern-day slavery including human rights abuse with Evidence of policies
  1. Ethical Behaviour Policies, Procedures, Practices, and Systems

This section seeks information and confirmation about business ethics, Behaviour Policies, Procedures, Practices, and Systems.

  1. Ethical behavior policy/statement and staff training
  2. Conflict of interest policy (how a conflict of interest is managed within the organization from an ethical perspective)
  3. Bullying, and harassment policy / Statement
  4. Workforce whistleblowing policy / Statement
  5. Fraud Bribery & Corruption Policy / Statement
  1. Financial Management Policies, Procedures, Practices, and Systems

Your organization needs a manual that covers all the accounting policies, procedures, and systems. Finance being the lifeblood of every organization, the contracting authority may require you to have Financial Management Policies, Procedures, Practices, and Systems. These may include:

  • Financial Management Policy and Procedures
  • Procurement Policy (including asset management)
  1. Governance Standards, Policies, Procedures, Practices, and Systems

Just like any other Management Compliance Assessment, the contracting agency must find out if you have been keen enough to establish Governance Standards, Policies, Procedures, Practices, and Systems. They will specifically consider the following areas:

  1. Environmental safeguarding policy/statement or publication of environmental performance reports
  2. System to safeguard the integrity and security of your IT and mobile communication systems
  3. Management of data and data security GDRP related
  4. Quality assurance manuals, policies, and/or systems
  5. HR and Recruitment Policies
  6. Processes and systems in place to conduct due diligence and vetting of downstream partners in your supply chain.
  7. Insurance coverage:
    • Employer’s (Compulsory) Liability
    • Public Liability Insurance
    • Professional Indemnity Insurance Evidence of policies will need to be provided at the contract stage.

If the answer to this section is NO, you may be asked to commit or confirm that your organization will obtain the required insurance policies upon contract award.

  1. Duty of Care

This is intended to determine whether your business is responsible for ensuring that the partners have an adequate duty of care provisions in place. You may have to ask yourself a few questions like:

  1. Do you have appropriate systems in place to manage an emergency/incident if one arises?
  2. Do you have a travel policy, risk management, and emergency procedures in place?
  3. Have you ensured or will you ensure that your staff is appropriately trained before they are deployed, and will you ensure that ongoing training is provided where necessary?
  4. Have you ensured or will you ensure that your staff is provided with and have access to suitable equipment?
  1. Technical Capability

The contracting authority may assess the technical capabilities of the partner organizations, including a track record in performing similar assignments. Your company will be required to provide a capability statement.

A capability statement is a concise, one-page document of your business competencies. Other experts have interpreted it to be a business’s resume.

It is used to provide specific information that will convince the potential contracting agency to do business with you. You have to list some of the big current numbers of contracts with the government and other corporate organizations. It is written so well to differentiate your business from the competition.

  1. Disclosures

This requires you to provide an adequate explanation on the disclosure form. You have to indicate if you, your organization, or any other person who has powers of representation, decision, or control in the organization has been convicted anywhere in the world of any offenses relating to fraud; corruption; participation in a criminal organization; terrorist offenses (including terrorist financing); money laundering.

You also have to indicate if anyone in your organization has ever had allegations against them of misconduct relating to unethical behavior or sexual exploitation, abuse, or harassment.

You are required to indicate that you are Tax Compliant with the relevant tax authority in your country. Sometimes you will be required to provide a tax clearance certificate issued by the revenue authority.

Other Areas of In Which You May Be Required to Provide Declaration Include

  1. Breach of environmental, social, or labour law obligations
  2. Significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, a prior contract with a contracting entity, or a prior concession contract, which led to early termination of that prior contract, damages, or other comparable sanctions.
  3. Sanction or violation of law or regulation
  4. Proceedings or other arrangements relating to bankruptcy, insolvency, or financial standing
  5. Offense concerning professional misconduct
  6. Conflict of Interest in case your organization or any other person who has powers of representation, decision, or control in the organization is aware of any conflict of interest relevant to your participation in the procurement procedure

Due diligence helps a contracting authority and companies understand the nature of a deal, associated risks, to award a contract or to make an investment decision.

Due Diligence Helps A Contracting Authority and Companies Understand the Nature of a Deal, Associated Risks, To Award A Contract or Make an Investment Decision.

The Scope May Cover Financial Information, Assets, Employees, Licenses and Permits, Human Resources (HR) Due Diligence, And Facilities, Compliance with Environmental Regulations, And Legal Due Diligence.

Signing at the end of the evaluation tool will always be provided to make sure you understand that the information will be used in the procurement selection process to assess your organization’s suitability to partner with the contracting agency.

More still, you have to ensure that you respond accurately because additional supporting evidence of your response can be required at any time upon contract award during a more thorough assessment.

About the Author: Robert Mwesige

Robert Mwesige is a Certified Trainer of the International Labour Organization (ILO), Certified Financial Literacy Trainer of Bank of Uganda (BOU). He is the Learning & Development Specialist and Chief Talent Officer at Houston Executive Consulting. Robert Mwesige is a Google Certified Digital Marketing Professional. He is the Content Designer (Web Editor), and SEO Consultant at Geotech ICT Consulting – Uganda.

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About the Author: Robert Mwesige

Robert Mwesige is a Certified Trainer of the International Labour Organization (ILO), Certified Financial Literacy Trainer of Bank of Uganda (BOU). He is the Learning & Development Specialist and Chief Talent Officer at Houston Executive Consulting. Robert Mwesige is a Google Certified Digital Marketing Professional. He is the Content Designer (Web Editor), and SEO Consultant at Geotech ICT Consulting – Uganda.