Site Visits: Sometimes the best due diligence is done on foot

Site visits play an essential, and often undervalued, role in the due diligence process. But managing site visits on a global scale presents a number of challenges. Finding and coordinating multiple subcontractors for these visits can be a daunting task and a sizable administrative burden, so knowing when they add value is key. Here are three scenarios where they can benefit an enhanced due diligence program.

Scenario 1: Supporting open-source research

The depth of open-source research for due diligence varies by organization, but may include image analysis and analysis of map data. Surprisingly there are still large areas that are completely unmapped on Google Maps, particularly in the Middle East, for example.

Even when available, this type of information can get out of date quickly, and establishing the exact date an image was taken isn’t always straightforward. Take Google Maps for example: images are generally updated every one to three years, in some cases even less frequently.

Using a site visit to gather the most up-to-date information allows you to compare it with your open source findings, answer outstanding questions and establish what has changed or what is new. What’s more, information gathered by an on-the-ground investigator can provide a wealth of new intelligence as part of enhanced due diligence research.

Scenario 2: Independently verifying a business presence

Analysis of company records forms the backbone of the due diligence process. Whether you’re retrieving records online or offline, checking corporate registries is essential for establishing who owns a company, its financial status and who controls or oversees its operations.

However, checking these records often only tells you what information the company has independently filed. Sometimes the best way of checking a business’s operations is turning up and having a look at them in person.

The Wirecard example is a stark reminder of the importance of site verification as part of the due diligence process. A simple site visit exposed some shocking truths contradicting corporate records research. Addresses linked to the third-party partners were in fact found to be a residential home for a surprised Filipino fisherman as well as a holiday coach company.

Challenge 3: Verifying residential addresses

While credit records and electoral rolls can help you verify residence electronically in developed countries, these sources only work for individuals who have credit histories or who vote and choose to share their data. In many cases where there is missing or unclear information, or when online address information just doesn’t exist, a site visit can be the most effective alternative.

An on-the-ground investigation to confirm the address and check the name on the mailbox can overcome this common due diligence scenario.

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In order to maximize the value of site visits, effective communication with on-the-ground investigators is key. Providing direction before the visit, requesting photos from multiple perspectives, and comparing site visit images with social media information can enhance the intelligence gathered and provide answers for your unresolved research.

For all the evolution in online research and continued digitalization of previously offline databases, there are still certain situations where the best due diligence is done in person and on foot.