How to Handle Due Diligence Questions
The phrase “due diligence” is said a lot in the corporate world, and it can mean different things in different contexts. Generally, though, to do “due diligence” means to be thorough in your work and to make sure every aspect of the assigned task has been completed. But what does it mean to do due diligence in the realm of ethics and compliance? Put simply, it means asking a lot of hard, prying questions. Those conducting an ethics audit must be careful to solicit answers to these questions in a way that does not offend, but also elicits honest, factual, responses. That can be a narrow needle to thread; so, let’s look at some techniques that might help auditors efficiently accomplish this goal.
Always Ask Necessary Questions
A good rule of thumb in ethics auditing is to ask only necessary questions. Ethics questions are personal by nature, and putting too high a burden on the interviewee may cause them to shut down. Depending on the circumstances of the situation, asking a client if they’ve ever been fired from a job might be sufficient whereas asking how many times and from which companies might be too far.
It’s important to understand what the information gathered is going to be used for, and how that information might affect the client’s goals in relation to the audit. A good measure for the applicability of a question is this: if the interviewee answered in the worst way possible, would the client still want to keep them on their team? If the answer is yes, the question is overly personal without eliciting information sufficiently important to warrant the intrusion on the interviewee’s privacy.
Make Hard Questions Clear and Direct
Ethics audits are difficult, because they often require an outsider to comb through dirty laundry. Questions that are hard, like those related to past ethical indiscretions, should be clearly phrased and asked upfront. One of the worst things that can happen through the course of an audit is to needlessly return to a difficult question because it was poorly phrased. The more a question is asked, the less likely an auditor is to receive an accurate response–especially when that question is a difficult one to answer to begin with. In other words, efficient auditors frontload their hard questions.
Many organizations, especially large ones, that offer different services through multiple branches, are very complex and multifaceted. These organizations often have several relatively independent departments, and each department might have different needs in terms of their ethics and compliance requirements. It’s important to include all departments when formulating an auditing instrument.
Structure Your Questions In a Role-Specific Way
Not all members of an organization require equal scrutiny, and this should be reflected in how due diligence is conducted. Janitors, salespeople, and regional vice-presidents all have different roles and responsibilities, each with its unique compliance issues. Nevertheless, some employees may not need nearly as much scrutiny as others, and it can waste both the auditors’ time and the organization’s money treating them all the same. Creating different methods for dealing with different tiers of interviewees is a good way of streamlining the process to meet the client’s expectations while also saving their resources.