Performing reputational due diligence emerged in the 2000s — so why in 2023 specifically should organisations be reviewing and improving their approaches?
The way due diligence can be used to manage the reputation of organisations has transformed in recent years. The move to the always-on digital world has impacted due diligence in two significant ways:
More sources of online data are now publicly available than ever before.
The permanency and wide distribution of information on individuals and groups could threaten their professional survival.
An understanding of how to mobilise both of these developments for your organisation has become essential to safeguarding the reputations of organisations. It can also provide opportunities to enhance these reputations. Due diligence is more than just a risk mitigation process. It can also build positive relationships, instil trust, and position an organisation for success and growth.
With this in mind, many organisations would benefit from reconsidering their due diligence to guarantee a process that protects and boosts reputations for the long term.
Suggested reading: Check out our blog 5 Notable Cases of Failure to Exercise Due Diligence for more detail on the Oxfam workers’ scandal and lessons you can learn from other real-life due diligence scandals.
Upgrading your Reputational Due Diligence
Due diligence at its best ensures all stakeholders have access to and understand all possible information relevant to managing their reputations, including benefits and potential liabilities. Its goal is to enable organisations to make fully informed decisions.
There are numerous processes involved in reputational due diligence. These fall into three major stages: research, analysis, and delivery. Here, we will briefly cover what each of these stages involve and how they should be upgraded in light of modern best practices.
The data gathering and collation stage of reputational due diligence has to consider all avenues and sources of information. With the vast amounts of publicly available open-source data out there, it would be a significant oversight to not take as much of it as possible into account.
But how much is too much? The problem is that there is simply too much data for people to sift through. Search engines can also prove problematic as they are easily manipulated by SEO/SERP results and have limited filtering capabilities. A tool that can mine all online data sources and deliver the specific insights needed, rather than all the insights possible, is crucial to success.
Collecting data is one thing; deciding what is relevant and drawing detailed, actionable insights from it is another. With all the sources out there, there's a real risk of collecting the wrong kind of data. False positives from different subjects with the same names, for example. Or missing connections between people and events entirely, due to data in a language foreign to your analysts not getting picked up.
An AI-powered solution proves helpful in addressing such issues, particularly to disambiguate between data when provided context and translating sources back. An AI solution can research and analyse simultaneously, saving time and resources for even greater end results.
Reputational due diligence needs to provide well-informed data quickly so that decisions can be made faster and more confidently. This can only happen when due diligence reports are comprehensive, clear, and shareable. Automated platforms provide this capability. They have the advantage of built-in, fit-for-purpose templates to provide unambiguous output that anyone can understand immediately. Crucially, such a platform will also deliver these reports at a rapid enough pace to be incrementally updated with further research as time goes on.
Reputational due diligence must address three major stages: research, analysis, and delivery.
The process must deliver as quickly as possible to remain relevant.
These stages can be effectively delivered using a fit-for-purpose automated AI platform.
What automated reputational due diligence enables
An automated due diligence platform encompasses all of the above solutions, saving resources and optimising existing due diligence services. Having multiple tools for multiple issues risks creating a reputational due diligence process that's complicated and ineffective. Solve digital problems with a single digital solution.
By sticking to one trusted platform like Xapien, you deliver:
Better workflows: It is important to remember that an automated due diligence system doesn't replace human teams, but allows those teams to work better together. The efficiency guaranteed by a due diligence platform means that organisations can rely on it and deploy resources elsewhere to improve performance overall.
For example, new and existing employees will have to spend far less time training to understand due diligence processes. Rather than having to take them through through a step-by-step approach of research, analysis, and delivery, employees can simply be introduced to a platform that does it for them. Plus, the shareability of final reports means that due diligence decisions can be easily discussed and shared across the board.
Better awareness: An automated due diligence platform clears the fog brought on by large, oversaturated amounts of publicly available information. Organisations can trust that, even as that information is added to as time goes on, the platform will seamlessly research, analyse, and deliver on relevant insights. It is crucial to remember that people who use Xapien will get specific, actionable information instead of trying to make sense of all the possible data.
Better decisions: The high level of comprehensive insight means that decisions will always be well-informed. This not only means that risks are averted — it also deepens relationships with existing partners and identifies ways to grow your reputation, not simply protect it.
Automating your reputational due diligence naturally leads to more efficient internal processes.
Automated reputational due diligence identifies the possibilities for reputational damage and growth in equal measure.
Suggested reading: For more on reassessing your due diligence strategies for 2023, take a look at our blog How to Prevent Reputational Risk to find out how to better inform your reputational risk management.
From 2023 and beyond
Reputational risk management and due diligence is an evolving process. Organisations need an approach that takes advantage of what is available today but also has an eye to the future. Today, what's vital is identifying the risks and opportunities brought about by new platforms. Tomorrow, you will need all the more flexibility and speed to wade through even larger amounts of data.
The generation and consumption of data is on a never-ending spike. Internet users produce roughly 2.5 quintillion bytes of data a day. 79 zettabytes of data alone was consumed globally last year — that’s about 1,200,000,000 times the size of the Google Earth database. And that number is expected to increase to over 180 zettabytes by 2025. It is essential to select a dynamic tool that is constantly developing to match the broader impact of this data explosion. Data warehouses and corporate databases are no longer sufficient when you consider how rapidly online data is expanding.
Wouldn’t it be nice if there was a tool that can read, analyse, and make sense of endless amounts of structured and unstructured data as they were generated? That’s where Xapien fits in. We’ve developed a cost-effective, intensive, and seamless way to guarantee these capabilities.
Xapien enables businesses and organisations to deliver holistic due diligence. Not only does our platform help compliant, robust background reporting, it provides tangible opportunities for strategic decision-making and growth.
Knowledge automation: Our Fluenci natural language processing algorithms understand and extract information from diverse and often complex publicly available sources. Results are presented in a clear, detailed, and categorised format.
Linking entities: Any possible links between entities involved in the search are provided with full context. Organisations can now explore connections between prospective partners and their associates that would not otherwise be apparent until too late.
AI-based insights: Through a combination of AI-graph matching, global address matching, and facial matching, Xapien produces incredible insights without the need for manual searching and data processing. Our Neurisk classifier understands the semantic meaning of the text and whether it highlights or presents any risks that you need to consider.
Modern businesses and organisations have to go beyond simple background reporting. Xapien can unlock strategic advantages and beat competitors. Book a demo with us today and see what effective reputational due diligence really involves in 2023.