Due diligence is a legal term that describes the level of care or judgment that a reasonable person would be expected to exercise in a given situation. The term finds application in a wide range of business settings, including mergers and acquisitions, occupational health and safety, environmental impact assessments, supplier and vendor relationships, asset purchase decisions, and employee hiring or promotion practices. Performing a due diligence analysis in such situations helps managers make informed decisions and reduce the risks incurred by the business. "Real due diligence analyzes and validates all the financial, commercial, operational, and strategic assumptions underpinning the decision," an analyst for Price Waterhouse Coopers told Mondaq Business Briefing. "Due diligence is a strategy to reduce the risk of failure, as well as the embarrassment of discovering what underlies spectacular success," Herrington J. Bryce added in Nonprofit Times.

In the area of workplace safety, employers...