Proposal for the development of a due diligence policy

The policy may include focus areas for future work, define roles and responsibilities, and, where necessary, refer to more detailed procedures for specific areas.

For the policy to be effective and relevant, it should:

• be integrated into the organisation’s other governance documents,
• be made public in an appropriate manner – via the organisation’s website, for example – to promote transparency, and
• be reviewed regularly, as well as in the event of changing circumstances.

1. Introduction and definitions

• Clarify key terms such as due diligence and provenance.
• Describe the purpose of the policy and how it supports the organisation’s mission and goals.

2. Nature and relevance of the collections

• Describe the composition and significance of the collections in relation to the organisation’s overall goals and objectives.

3. Relevant laws and standards

• Identify the laws, conventions, international agreements, industry standards and other guidelines that govern due diligence efforts.

4. Roles and responsibilities

• Define internal roles and responsibilities:
  • who is responsible for carrying out due diligence investigations, and
  • who has a decision-making mandate in different parts of the process.

5.  The due diligence process

• Describe when due diligence should be carried out, and how:
  • in the event of acquisitions, loans, donations or other relevant situations, and
  • the steps are included in the process, from initiation to final decision.
• Identify specific object groups that require greater due diligence. Define high-risk objects requiring particularly careful handling.
• Establish documentation criteria that have to be met in order to approve an acquisition or loan.

6. Dealing with insufficient information

• Set out procedures for dealing with situations where documentation is unavailable:
  • what supplementary investigations may be required, and
  • the circumstances under which it is acceptable to proceed with acquisitions or loans.

7. Use of objects under investigation

• Describe principles for how objects that are subject to a due diligence investigation may be used, for example in:
  • exhibitions,
  • displays, and
  • publication and research contexts.

8. Research and sampling principles

• Specify guidelines for:
  • how research and sampling on objects under investigation are to be conducted,
  • who is allowed to access the objects under investigation, and under what conditions, and
  • how any research results are to be incorporated into the collections.

9. Finance and timeframes

• Define principles for:
  • what costs the organisation is willing to cover in connection with due diligence investigations (this may be a percentage of the purchase cost or a fixed amount in the event of a loan), and
  • a reasonable timeframe for carrying out investigations.

10. Communication and transparency

• Describe how the organisation communicates its due diligence efforts:
  • Internally: to ensure understanding and compliance among staff.
  • Externally: to promote trust and transparency among partners and the general public.

11. Information management and accessibility

• Describe how information obtained during due diligence efforts is to be managed:
  • documentation and archiving procedures, and
  • principles for sharing relevant information with other organisations, while also protecting confidential information.

The policy should also include:

• author and date,
• decision-maker and date of approval,
• date of the next scheduled review,
• links to other relevant governance documents, such as acquisition and lending policies, and
• procedures for documentation and information management in the due diligence process. (This may include a description of the organisation’s documentation and information system and how information about the object and documentation of the due diligence efforts will be stored.)