The media storm over the LSE’s gift from Gaddafi International Charity and Development Foundation – the story is explained in detail by LSE here – is an example of one of the many difficulties in running a due diligence process. Before the gift was accepted, the prospect research team at LSE (led by Dr Karl Newton, who is one of the best researchers in the UK) will have done a very thorough piece of due diligence research on the foundation, and provided colleagues with a balanced view of the prospect.
But what they, and no-one, could have predicted at the time was that the media view of their prospect/donor would change so dramatically in just a week, late February 2011. The same has happened with other prospects and donors. A charity that accepted a donation from BP on April 19th 2010 after a due diligence process would have to think very hard when, on the 20th, Deepwater Horizon exploded.
LSE has sensibly responded by describing the due diligence process that they went through before accepting the gift. They have been able to do so in part because of the diligence of their prospect research team, who, diligently, record and date all the research they do.
Karl Newton posed this as a question in a post on 9th March 2011 on prospect-research-UK:
“As well as looking at ethical policies you should also ask yourselves the question: How would anyone know what I did in two years time?”
“…an ethical policy goes hand in hand with prospect tracking and information management: What have you done, When did you do it, Where is it?”
Due diligence means diligence in the simple, basic stuff – record keeping, tracking, histories, a good database. Worth remembering when the boss asks why you’re spending time keying data.