Company risk manifests in a myriad of ways, some seemingly easy to overlook and others more obvious. One of the biggest risks in day to day operations for companies comes from third parties – distributors, potential employees, suppliers, service providers, contracts, clients, vendors, etc. Basically, anyone on the outside who encounters your business can potentially become a threat.
Many security providers cannot address the risks and complex environment in hostile and emerging markets. They lack the needed infrastructure and cultural understanding to be able to provide services of high quality in locations outside of their area of familiarity, as majority of them are based in Europe or the USA.
The security provider should be a key to success, helping companies in business growth, finding new markets and mitigating potential risks.
What you don’t know can hurt you
Companies need to make informed decisions. The initial analysis of potential ventures and associated risks will show you the situation at hand and how to move forward.
Due diligence is an important part of every process at a business, from mergers and acquisitions to finding the right suppliers and clients.
Comprehensive due diligence is extremely important to getting the whole picture of an applicant or a third-party business relationship. Without going through this process, you expose your business to countless threats.
Making an assumption based on surface-level information could lead to difficulty conducting business, or at worst, breaching sanctions.
It is true that financial losses can be offset by insurance when damage has already taken place, but the stains on the company’s image and reputation are not covered by insurance policies.
Due Diligence makes it possible to secure the business environment before the incident occurs. In the case of cost structure, this can be found to be more of an investment as opposed to an expenditure.
What kind of provider do you need? The most suitable provider will be the one who has already dealt with the same or similar case in the market you want to operate and has built their network. They can aid you in determining potential risks as well as creating a mitigation agenda and budget through their local resources.
Field agents can provide insight into the environment you will be operating. They have years of professional experience and know the details of the potential uphill battle with the dangers and risks. There is no substitute for local knowledge.
It can be invaluable to know the backgrounds and affinities of the stakeholders that influence the company’s operations. Even if the investigated entity is perfectly compliant and lawful, these types of reports can be helpful simply on a level of benefitting the business relationship with information and perspective. The best results with Due Diligence investigations are often achieved when the process is outlined and integrated into the company’s entire business strategy.
Finding the security provider you need is not an easy task. Seek references and assess the capabilities of each provider. Look for companies who work on the ground and know the environment. The ideal partner has developed their network in the location you want to operate in and they possess local knowledge and expertise.
No one has all the answers, but you can find most of them by choosing the right security provider.
This article was written by Daniel Dadikozyan of Centry Global. It has been cross-published in the CIISCM magazine. For more content like this, be sure to subscribe to Centry Blog. If you have any questions or comments about due diligence services, feel free to reach out to us at email@example.com!