Doesn’t Anyone do Due Diligence or Deep Dives Anymore?

• FTX (crypto/finance)
• Paria diving disaster, 
• cyber breaches (not just pen testing), 
• tree falls and total blackout for 13 hours is the result.
• Covid 19: downstream impacts
• Russian war: supply chain/third party risk results.

The FTX failure has put a renewed emphasis on the value of an excellent deep dive into your people, processes, and systems (Operational Risk), And by the way, not deep dives as a post-mortem (after the risk impact) but as a “pre-mortem” (proactive and anticipatory).

“These days, it is hard to know what due diligence actually means. Ontario Teachers’ Pension Plan, which put $95mn into FTX, insists that its professionals “conduct robust due diligence on all private investments”. Tiger Global, which tossed in $38mn, pays outside consultants including Bain & Co to do the work. Yet both missed what FTX’s new chief has described as a “complete failure of corporate controls”. Sequoia Capital, which handed FTX founder Sam Bankman-Fried $214mn even though he played video games during his pitch to them, has walked a fine line. It issued a rare apology and promised tougher standards in the future while insisting that it did the proper checks”…..

Stay proactive, anticipatory, and resilient.

Cheers!