51��Ƶ����

A Due Diligence Policy guides how organizations investigate and verify potential business partners, investments, or transactions before committing resources. In Nigeria's business landscape, these policies help companies comply with key regulations like the Companies and Allied Matters Act (CAMA) and anti-money laundering laws while protecting their interests.

The policy typically outlines specific steps for background checks, document verification, and risk assessment. It serves as a safeguard against fraud and helps Nigerian businesses make informed decisions about partnerships, mergers, or major contracts. Companies in regulated sectors like banking and oil must follow strict due diligence requirements set by agencies such as the Central Bank of Nigeria and the Corporate Affairs Commission.

You need a Due Diligence Policy when entering significant business relationships in Nigeria's complex market. This includes mergers and acquisitions, major supplier contracts, joint ventures, or when bringing on key investors. Nigerian banks particularly need robust policies when onboarding high-value customers or engaging in cross-border transactions.

The policy becomes essential before committing substantial resources or when operating in highly regulated sectors like banking, insurance, or oil and gas. It helps meet Corporate Affairs Commission requirements and protects against fraud, money laundering, and reputational damage. Companies expanding into new markets or dealing with unfamiliar business partners find these policies especially valuable for risk management.

• Financial Due Diligence: Focuses on evaluating financial records, tax compliance, and banking relationships - critical for Nigerian financial institutions and large corporate transactions
• Legal Due Diligence: Covers regulatory compliance, litigation history, and contractual obligations under Nigerian law
• Technical Due Diligence: Essential for oil and gas sector deals, examining operational capabilities and environmental compliance
• Commercial Due Diligence: Analyzes market position, customer relationships, and business model viability
• Anti-Money Laundering Due Diligence: Specifically addresses CBN requirements and financial crime prevention measures

• Corporate Legal Teams: Draft and update Due Diligence Policies, ensure compliance with Nigerian regulations, and guide implementation across departments
• Board of Directors: Review and approve policies, oversee major transactions requiring due diligence
• Compliance Officers: Execute policy requirements, maintain documentation, and coordinate with regulatory bodies like CBN and CAC
• Investment Teams: Apply the policy during mergers, acquisitions, and strategic partnerships
• External Consultants: Provide specialized expertise for technical, financial, or industry-specific due diligence requirements
• Risk Management Teams: Monitor policy effectiveness and recommend updates based on emerging risks

• Industry Requirements: Review specific regulations from CBN, CAC, or SEC that apply to your sector in Nigeria
• Risk Assessment: Map out key business risks and compliance challenges unique to your organization
• Scope Definition: Identify which transactions or relationships will trigger due diligence procedures
• Internal Processes: Document existing verification procedures and approval chains
• Resource Planning: List available tools, databases, and staff for conducting due diligence
• Documentation Standards: Establish clear record-keeping requirements and reporting formats
• Review Mechanism: Create schedules for policy updates and effectiveness assessments

• Policy Purpose: Clear statement of objectives and scope aligned with Nigerian corporate governance requirements
• Legal Framework: References to relevant Nigerian laws, including CAMA, BOFIA, and anti-money laundering regulations
• Due Diligence Procedures: Detailed steps for investigation, verification, and documentation processes
• Risk Assessment Criteria: Specific metrics and thresholds for evaluating business relationships
• Reporting Requirements: Templates and procedures for documenting findings and recommendations
• Approval Process: Clear authority levels and decision-making hierarchy
• Review Mechanism: Schedule and process for policy updates and compliance monitoring

A Due Diligence Policy differs significantly from a Due Diligence Checklist in both scope and function within Nigeria's business environment. While they work together, each serves a distinct purpose in risk management and compliance.

• Strategic vs. Tactical: The Policy establishes overarching principles and procedures for conducting due diligence, while the Checklist provides specific items to verify during each review
• Permanence: The Policy is a permanent governance document requiring formal board approval, whereas Checklists are operational tools that can be modified for specific transactions
• Compliance Framework: The Policy aligns with Nigerian regulatory requirements and corporate governance standards, while Checklists implement these requirements in day-to-day operations
• Audience Focus: The Policy guides senior management and compliance officers, while Checklists serve as practical tools for operational staff conducting investigations