What is a Due Diligence Questionnaire?
A Due Diligence Questionnaire (DDQ) is a structured document used by organizations to gather critical information about a third party, vendor, or business partner before entering into a contract or investment. It helps evaluate the counterparty’s financial stability, compliance practices, governance standards, and operational risks.
DDQs are widely used in industries like finance, investment management, healthcare, and technology to ensure that third parties meet regulatory, legal, and ethical requirements.
Why a Due Diligence Questionnaire Matters
Completing a due diligence questionnaire is essential because it:
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Supports risk management by identifying potential financial, legal, or reputational risks
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Ensures compliance with regulations such as GDPR, HIPAA, SOX, and anti-bribery laws
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Improves transparency by documenting key business practices and disclosures
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Builds trust with investors, clients, and regulators
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Streamlines decision-making by standardizing information collection
Common Sections in a Due Diligence Questionnaire
A comprehensive DDQ may include questions covering:
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Corporate Structure – Ownership details, governance, and subsidiaries
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Financial Information – Audited statements, revenue, liabilities, and capital structure
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Regulatory Compliance – Licenses, certifications, and compliance with relevant laws
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Risk Management – Internal controls, cybersecurity measures, and insurance coverage
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Legal Matters – Pending lawsuits, regulatory investigations, or contractual obligations
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Operations – Supply chain details, outsourcing arrangements, and business continuity plans
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Ethics and ESG – Code of conduct, sustainability practices, and anti-corruption policies
Example of a DDQ in Action
Before investing in a private equity fund, an institutional investor requests a DDQ. The fund provides detailed information about its governance practices, investment strategies, compliance framework, and past audit findings. This allows the investor to assess risks before committing capital.
Due Diligence Questionnaire vs. Vendor Risk Assessment
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DDQ – Broader, often used in mergers, acquisitions, or investments to evaluate overall organizational integrity.
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Vendor Risk Assessment – More specific, focusing on ongoing monitoring of third-party service providers.
How VComply Can Help
VComply streamlines the due diligence process by providing automated workflows to collect, review, and store DDQs securely. Its platform enables standardized questionnaires, assigns accountability for responses, and ensures compliance with global regulations. By centralizing vendor and partner risk data, VComply helps organizations make informed decisions and reduce due diligence risks