Conducting Due Diligence

The due diligence process is conducted by JCU Connect. It is conducted by JCU Connect and must be completed prior to a final decision to proceed with a collaboration or partnership with an external partner.

The term “due diligence” describes the process of systematically appraising a potential contractor or business partner to establish its financial position and reputation. The focus in due diligence is on the financial and reputational standing of the other entity.

JCU Connect will conduct a due diligence exercise in respect of each potential contractor or partner as a precursor to entering into a contract of significant value or a significant business relationship.

The scope of the due diligence exercise will depend on the nature of the matter and the entity involved. The higher the value of the transaction or the significance of the partnership, the more extensive the due diligence inquiries will be.

As a researcher, your obligation is to notify JCU Connect promptly in the event that you are considering entering into a contract of significant value or a significant business relationship, so that JCU Connect can undertake the necessary due diligence.

The focus of the financial due diligence is in ensuring that the entity is of good financial standing and to confirm that the University is likely to be paid.

For transactions or partnerships valued at greater than $1 million, JCU Connect may seek some or all of the following information:

  • Profit and loss statements, balance sheets and annual reports (up to 3 years)
  • A Corporate Scorecard report
  • Certificates of currency for Insurances and copies of policies
  • Current business plan
  • If the entity is a member of a corporate group, a corporate tree outlining the structure of all members in the Group
  • Details of any events (current or anticipated) which may have a material adverse effect on the entity or the corporate group
  • Details of any current or threatened litigation
  • Details of any “off balance sheet” transactions
  • Details of any regulatory breaches
  • A copy of the entity’s compliance policy and any significant non-compliance
  • If the entity will hold information about JCU or its students, policies and procedures relating to privacy, data security and business continuity

There is no “one size fits all” approach to this exercise. The extent to which some or all of the above information is obtained will depend on the value of the transaction or the significance of the relationship.

The focus of the reputational due diligence is in ensuring that the entity is a safe match for the university.

To be satisfied that the proposed partner is of high standing in the industry, JCU may:

  • Ask whether the organisation’s purpose and its principal activities align with that of JCU
  • Make inquiries of customers, users or suppliers to the proposed partner
  • Make inquiries with other JCU staff who have a history of engagement with the proposed partner
  • Speak to referees named by the proposed partner

Once you have aided JCU Connect in conducting due diligence for your project, the next step is Developing and Writing Bids.