Management Due Diligence Assessment

What is Management Due Diligence?

Any Venture Capitalists and Private Equity Investor needs to assess the risks and opportunities of a potential equity investment. Traditionally investigations have focussed on Financial and Commercial Due Diligence, largely ignoring the fact that the financial and commercial performance of a company primarily arises from the performance of the senior management team.

Our Management Due Diligence Assessment service provides you with professional assurance of the risks and opportunities of your potential investment, in relation to the ‘human capital’ – the senior management resources of the company you intend to invest in.

We tailor the Management Due Diligence Assessment to your exact needs as an investor. You may be at the early stages of considering an investment and require a swift summary assessment of a senior management team; or you may be at a more advanced stage and require a more in depth assessment focussing on planning developmental changes to the senior management team. At whatever stage of your planned investment, we work with you to identify the most appropriate and cost effective Management Due Diligence Assessment strategy in relation to your investment objectives.

Purpose of Management Due Diligence

To provide an objective and independent assessment of the senior management team of the company you are about to invest in, to evaluate how able they are to achieve the strategic objectives of the business. More specifically to:

  • Assess the current competencies and management style of directors and senior managers using accepted world class competency frameworks, modified as appropriate to take into account the market sector and the strategic business and investment objectives.
  • Identify skills and knowledge ‘gaps’ within the senior management, necessary to achieve strategic business and investment objectives.
  • Clarify how directors currently operate and interact with each other, identifying attitudes, values and behaviours the senior team need to reinforce and cascade throughout the organisation.
  • Identify senior managers with potential for advancement, – possessing business skills and knowledge which could be more effectively utilised by the business.
  • Identify development needs of senior managers and directors, to support the attainment of strategic business and investment objectives.

How it works

  • We ask designated directors/senior managers to undergo a Hogan Assessment (usually the Hogan Personality Inventory and Hogan Development Survey). This provides additional impartial assessment.
  • In addition we typically interview directors to gain a further insight into the dynamics of the board/senior management team.
  • A personal report is provided to each director/senior manager providing a summary of the Hogan Assessment and minutes of the interview. (This allows the persons concerned to provide clarification and additional commentary as may be appropriate)
  • All findings are collated into a strategic report identifying strengths, weaknesses, opportunities and threats to the business based upon assessed competencies and dynamics of the board/senior management team. This report which is presented to investors (and directors/senior managers as may be considered appropriate).