January 14, 2020 at 5:01 pm #104448
When seeking to hire external consultants in a foreign country to assist with DD, how can one ensure their will not be a conflict of interest on the consultant’s part? Is there really any way this risk can be fully mitigated when looking to hire advisers and consultants in a country and market one is not fully familiar with?February 13, 2020 at 6:22 pm #106566
Eneko Ferrero MartínParticipant
You can sign some clausules with them. Also, you should study the consultancy company and see if their trayectory is the correct one.March 16, 2020 at 3:33 am #107878
Finding the right external experts has a material impact on a project, and can include additional challenges when working remotely, across boarders and through different cultural lenses. For example, what could be interpreted as a final agreement in one culture, maybe considered a stage on the path of negotiation in another culture.
Aligning incentives with outcomes (and to avoid conflicts of interest) is difficult in any arrangement, however presents unique challenges internationally. Similar techniques can be used to those employed bringing together the buyer, target and specialist accountants (or legal, etc). It is important to understand the level of materiality to be deployed and the areas of concern being undertaken, in order to direct the advisors in various fields and get the results required.
In addition to references, it is always good, and even more so when working across unfamiliar cultures and regulations, to get multiple opinions initially to form the basis of where to source sound expertise and the required levels of performance.April 1, 2020 at 3:02 pm #109214
For classical DD, professionals that perform such engagements are usually following some ethical code for professionals that would provide some assurance that cases of conflict of interest should be properly identified and risk is mitigated (e.g. accountants, lawyers CPA’s etc).
For other DD areas, certainly you should explicitly include contract clauses in your agreement with regard to confidentiality, breach of independence etcMay 6, 2020 at 8:51 pm #109899
Hiring global companies such as the Big Four certainly helps to mitigate risk. Especially if they have people with your cultural background employed and you require to put them in the DD team. Additionally, your local partner should stay in connection to with manager/partner of your DD project in a foreign country.May 8, 2020 at 5:02 am #109930
Indrama Yusuf Muda PurbaParticipant
This is very important when do DD in the overseas we need external advisor assistance in knowing the target especially with different legal, system, culture etc otherwise the acquirer will be blind and the acquisition could destroy value.
Especially with MNC that have subsidiaries in different countries in Finance DD, Legal DD, very significant different that we should know to anticipate and mitigate the risk.
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