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Due Diligence

What Do I Do If a Vendor Won't Provide a Document?

Nov 2, 2016 by Branan Cooper

Here's a classic dilemma – what happens when a vendor simply won’t give you the documents you need to complete due diligence? Do you stand up and walk out on them? Usually not... but you do need to do something.

Here's some ideas of what to do next:

1. Let’s start with the easiest – if they won’t provide it, document the effort and determine if it’s acceptable.

a. If it is, then perhaps ask your senior management team to consider and approve it with a waiver or exception (and document the approval!).

b. If it’s not, look for alternatives – if they won’t release their financials, for example, perhaps a statement from their accounting firm is acceptable, or even a business credit report, just to have something.

2. If it’s pre-contract due diligence, perhaps you can contractually commit them to providing the information once the deal is sealed.

3. If it’s post-contract, you may have a much more difficult decision. Your best protection at that point may even be to have a call (and document the discussion) with them to see what they can offer as an alternative and what the sticking point is.

4. In my experience, we’ve gotten pretty creative – had video calls where they would show us their financials or business continuity plans but could not record it in any way.

5. I’ve even flown to a third party to have a meeting to discuss the items they won’t release.

You can’t always get what you want, but you should always ask and document the efforts.

Vendor Management Model Due Diligence Checklist

Branan Cooper

Written by Branan Cooper

Branan Cooper is the Chief Risk Officer at Venminder. Branan has nearly 30 years of experience in the financial services industry with a focus on the management of operational and regulatory processes and controls—most notably in the area of third party risk and operational compliance. Branan leads the Venminder delivery team as the third party risk management subject matter expert in residence. Branan also serves as an industry thought leader. He's a member of InfraGard and the Professional Risk Management Industry Association (PRMIA). And, he was selected in 2018 as an advisor to the Center for Financial Professionals (CEFPro) and board member for the Global Sourcing Resource Network (GSRN).

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