Few companies operate all on their own. In fact, you’ll find that most organizations interact with several third party entities in order to conduct their regular business. Common examples of this kind of corporate cooperation include partners, vendors, suppliers, and even some large scale customers.
But how can companies make sure that they’re doing business with the right people? And how can they avoid the potential risks associated with their collaboration? Enter corporate investigations. These in-depth background checks are a means of identifying potential red flags right from the start, so you can make decisions about your business’s future with confidence.
What are corporate investigations?
Corporate investigations are performed by taking an in-depth look at a business’s financial and legal history, among other details. They’re designed to uncover any potential issues so you can plan for them ahead of time.
As a key component of corporate due diligence strategies, business investigations also work to ensure that potential collaborators are operating in line with Anti-Money Laundering (AML) regulations and other business standards.
The importance of corporate investigations
Before you agree to work with another organization, it’s important to do your due diligence in order to identify whether they pose any risks to your business model over time.
This is especially true if you’re operating in an industry that’s governed by Anti-Money Laundering (AML) or Know Your Customer (KYC) standards. In order to remain in compliance with these regulations, you’ll need to make sure that your business has a standardized procedure in place.
What’s at stake?
Business investigations are all about risk management. When you decide to do business with a third-party organization, you open yourself up to a variety of potential risks. The best corporate investigators should be able to identify any and all of the following:
- Financial risks: A look into a company’s financial history will highlight any bankruptcies, liens, and other judgments to give you a sense of whether they’ll be able to meet the financial obligations associated with your business partnership.
- Legal risks: Similarly, it’s important to get a sense of whether a business and its associates are involved in any criminal or civil litigation, as well as whether they’re listed on watchlists or sex offender registries.
- Operational risks: Ensure that your company’s day-to-day operations won’t be interrupted by checking into whether the third party and its employees are up to date on their licenses and in compliance with industry standards.
- Reputation risks: Negative sentiments associated with an organization and its officers may transfer over onto your business in the event that you choose to work with them.
How does a corporate investigation work?
Independent investigations consider a variety of source materials in reaching their conclusions about potential financial, legal, and other risks in order to deliver a full picture of the subject in question.
- Business Background Checks: A more standard due diligence investigation into a company’s past, including legal and financial records.
- Global Sanctions and Watchlists: Compliance with KYC and AML standards involves a look into a company’s potential involvement with criminal activities.
- Bankruptcies, Liens, and Judgments: Information on a company’s financial history that gives a better sense of whether they’ll be able to pay their bills.
- Business and Identity Verifications: Corporate records and the identities of its executives confirmed and verified, as well as information about any potential aliases.
- Criminal and Sex Offender Records: Criminal histories and pending charges against company executives at the state, federal, and county level.
- Civil Litigations: Past and present civil lawsuits involving the company as well as its executives, including information on awarded damages.
- Negative Media Searches: Both news media and social media provide a look at the public reputation of your potential business associates.
- Professional License Verifications: Checks to make sure a company and its associates are up to date on professional licensing and other compliance-related measures.
In the event that your business wants to address more specific needs as part of your due diligence process, Business Screen offers customized searches, too.
What are the key components of a corporate investigation?
Independent investigations are an essential component of any company’s risk management program. Adopting these practices into a systematic review of all potential partners helps guard your business against a wide variety of risks.
That said, not all investigations are created equal. Only Business Screen is able to deliver the fast, consistent, and accurate results necessary to make the best possible decisions.
- Speed: You’ll want to get your results quickly so you can make your decision without any interruption in your day-to-day operations. At Business Screen, you’re able to get your results in around 48 hours.
- Accuracy: Some business reporting companies rely on out-of-date information and databases to reach their results. Not Business Screen. Our licensed investigators take the time to get the latest and most accurate information, using far more robust search methods and data systems.
- Reliability: Our licensed investigators are trained to go the extra mile, too. Rather than performing a simple credit check, they’ll dive into the full legal and financial history of the companies in question, as well as identify any risks related with their associates.
- Discretion: Business Screen is able to perform discreet investigations on US-based subjects, so you won’t need to tell your subject that you’re investigating them.
- Adaptability: The level of risk presented by a potential business partner is liable to change over time. That’s why it’s important to put into place a risk management system that’s able to continuously monitor those developments. You can take advantage of Business Screen’s Continuous Monitoring service if you plan to extend the business relationship over a year’s time or more.
Conclusion
Conducting background searches on businesses is a key component of the corporate due diligence process. With a robust risk management plan in place, businesses are better able to foresee potential risks, as well as avoid involvement in fraud, money laundering, and terrorism financing schemes, among others. The best corporate investigations provide a clear look at their subjects in an accurate and reliable fashion.
To get started with Business Screen, take a look at our pricing options.
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