Supplier Due Diligence: A Cost-Effective Strategy for Risk Management

Recent tender incidents in Hong Kong have once again demonstrated that inadequate vetting when selecting business partners can expose companies to significant operational and reputational risks.
One case involved a supplier ordered into liquidation after the contract was awarded but before the service was fully delivered, resulting not only in resource loss for the tender issuer but also severely impacting project timelines and corporate reputation.

Potential risks can be prevented through a basic due diligence process:
🔍 Litigation Record Search: Identify potential legal and financial risks
🔍 Bankruptcy & Winding-Up Search: Confirm the company’s operational status
🔍 Shareholder and Director Background Screening: Assess corporate governance stability

The Due Diligence process is both time-efficient and cost-effective, delivering significant values including:
✅ Identification of high-risk suppliers
✅ Safeguarding of project timelines
✅ Prevention of potential financial and reputational losses

Therefore, supplier due diligence must be integral to the procurement process. Even under urgent project timelines, maintaining a baseline level of compliance screening remains essential.