������Ƶ

A Due Diligence Policy sets out how an organization investigates and evaluates potential business deals, investments, or partnerships before committing to them. It helps companies meet their obligations under key NZ laws like the Financial Markets Conduct Act and Anti-Money Laundering regulations by establishing clear steps for risk assessment.

The policy typically outlines required checks on financial records, legal compliance, business operations, and potential risks. For Kiwi businesses, it serves as a practical roadmap for thorough research and verification, helping boards and managers make informed decisions while protecting their organizations from legal and financial risks. Many firms tailor their policies to address specific industry requirements and local market conditions.

Companies need a Due Diligence Policy before entering significant business deals or investments, especially when exploring mergers, acquisitions, or major supplier contracts. It becomes essential when investigating potential partners, particularly those operating in high-risk sectors or unfamiliar markets within New Zealand.

The policy proves invaluable during property purchases, business expansions, or when taking on substantial financial commitments. NZ regulators expect to see robust due diligence processes for financial service providers, listed companies, and organizations dealing with overseas entities. Having this policy ready before starting negotiations helps avoid rushed decisions and ensures compliance with the Financial Markets Conduct Act and AML requirements.

• Financial Due Diligence Policy: Focuses on evaluating financial records, market position, and investment risks. Common in mergers and acquisitions.
• Legal Compliance Due Diligence Policy: Emphasizes regulatory compliance, licensing requirements, and potential legal issues under NZ law.
• Commercial Due Diligence Policy: Examines business operations, market conditions, and competitive landscape.
• Environmental Due Diligence Policy: Specifically addresses environmental risks and Resource Management Act compliance.
• Technology Due Diligence Policy: Evaluates IT systems, digital assets, and cybersecurity measures for tech-focused transactions.

• Board Members: Approve and oversee Due Diligence Policies, ensuring they align with company strategy and risk appetite.
• Legal Teams: Draft and update policies, providing guidance on regulatory compliance and legal requirements.
• Investment Managers: Apply the policy when evaluating potential investments or acquisitions in the NZ market.
• Compliance Officers: Monitor adherence to the policy and maintain records for regulatory reporting.
• External Advisors: Help implement the policy during specific transactions, offering specialist expertise in areas like financial or environmental due diligence.
• Department Heads: Ensure their teams follow policy requirements when engaging with new business partners or projects.

• Risk Assessment: Map out your organization's specific risk areas and compliance requirements under NZ law.
• Industry Research: Gather relevant sector guidelines and standards from regulatory bodies.
• Team Input: Collect feedback from department heads about their due diligence needs and challenges.
• Process Mapping: Document your current due diligence steps and identify gaps or inefficiencies.
• Template Selection: Use our platform to generate a customized Due Diligence Policy that meets legal requirements.
• Review Structure: Establish clear reporting lines and accountability for policy implementation.
• Documentation System: Set up a system to record and store due diligence findings and decisions.

• Purpose Statement: Clear objectives and scope of due diligence activities under NZ regulations.
• Responsibility Framework: Defined roles and accountability for conducting due diligence processes.
• Risk Assessment Criteria: Specific factors to evaluate, aligned with Financial Markets Conduct Act requirements.
• Documentation Requirements: Standards for recording and storing due diligence findings.
• Review Procedures: Timeline and process for regular policy updates.
• Compliance Measures: Steps to ensure AML/CFT Act and other regulatory compliance.
• Reporting Protocol: Clear guidelines for communicating findings to decision-makers.
• Confidentiality Provisions: Rules for handling sensitive information during investigations.

A Due Diligence Policy differs significantly from a Due Diligence Report in both purpose and application. While the policy sets out the framework and procedures for conducting investigations, the report documents the actual findings and conclusions from a specific due diligence exercise.

• Timing and Use: The policy exists before any specific transaction, providing ongoing guidance. The report is created during or after investigating a particular deal or investment.
• Content Focus: Policies outline procedures and responsibilities; reports contain specific findings, data, and recommendations.
• Legal Standing: The policy serves as a governance document for internal compliance. The report functions as evidence of conducted due diligence and may be used in legal proceedings or regulatory submissions.
• Audience: Policies guide staff conducting due diligence. Reports inform decision-makers about specific opportunities or risks.