Most people can admit they have looked themselves up online before. But have you ever googled your company? A good practice to consider in an effort to manage any negative accounts or fake misleading data is to regularly check online for information about your business by performing adverse media screenings.
Before deciding to work with you, many investors, lenders, customers, vendors, and potential business partners will most likely search for your company online. However unfair as this may seem, you also have the same ability to look up any company you could potentially work with to screen for any potential allegations of unethical or illegal activities. Doing so helps protect your company from nonpayers, fraud perpetrators, and those bent on frivolous litigation.
Formal Policy
Given the vast amount of data available online and the potential legal risks, conducting adverse media screening requires a careful, methodical approach. Start by developing a formal policy to guide you.
The policy should assist you in finding and using adverse media without triggering legal exposure. Among other things, it should identify sources you intend to access, clarify off-limit actions, and detail how you plan to use any negative information you’ve found. Because laws governing privacy, defamation, and discrimination can vary by jurisdiction and situation, ask your attorney to review the policy before rolling it out.
Reliable Data
Adverse media screening can cover a broad range of activities. So, you should create categories to consistently classify potential red flags. Examples might include:
- Civil proceedings
- Criminal misconduct
- Environmental violations
- Regulatory scrutiny
- Financial crimes
Classifying data by category can help focus your due diligence efforts and make it easier to identify the most reliable sources for each.
Keep in mind that to generate traffic, some online outlets do little to verify the accuracy of their stories — and may even knowingly post disinformation. For example, many social media platforms allow their users to post opinions that may be factually incorrect. Rely only on information providers with high ethical standards and established histories of accurate reporting. And for any accusation, seek corroboration from multiple sources.
AI Tools
You don’t have to conduct adverse media screening manually. Rather than asking employees to research and gather information, some businesses use software that relies on artificial intelligence (AI) to scan the internet. AI can analyze large volumes of data far more efficiently than manual methods.
However, buying such tools can require a substantial investment and may not be practical for smaller businesses. The scope of screening should be proportional to the size of your business, the nature of the relationships you’re evaluating, and the level of risk involved.
Multistep Process
However extensive your adverse media screening, remember that it’s only one part of a broader due diligence process. If you uncover something negative, ask your potential business partner to explain it. There may be an innocent — or at least, more nuanced — explanation. Also ask for references and follow up on them.
Adverse media screening can involve legal, operational, and cost considerations, so work with your legal and financial advisors to determine when screening is warranted, how extensive it should be, and how to control related costs. Contact us for more information.
