The Importance of Social Media Background Checks in Due Diligence

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The Importance of Social Media Background Checks in Due Diligence
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Social media leaves a digital footprint that is an important tool when tracking the history and behaviors of companies and individuals. Typical due diligence background checks shed light on criminal convictions, civil litigation, bankruptcies, pending judgments and liens, government sanctions, regulatory violations and more. While those items are of importance, it doesn’t uncover the actions or beliefs that aren’t typically brought under the lens of the law. Social media due diligence often adds color and depth to companies that you otherwise would not be able to discern from a traditional background check.

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The digital profile of companies and individuals is extremely important because negative information can potentially help save millions in reputational risk pre-investment.

What Can a Social Media Check Uncover?

Typically social media due diligence can uncover:

  • Professionalism: Does an individual or company conduct itself with the requisite professionalism?
  • Behavior: Is there any illegal or otherwise detrimental behavior to know about?
  • Thoughts and Opinions: Has an individual or company ever expressed thoughts or opinions that could be construed as racist, sexist or otherwise discriminatory?
  • Corporate Fit: Does an individual or company’s social media presence indicate a good fit with your own business?

When your business is on the cusp of making an important decision, whether it be a new member, a key acquisition or a strategic partnership, the additional information gleaned from social media can be telling and actionable.

Can Anyone Perform A Social Media Background Check?

While anyone can take a precursory glance at someone’s social media, it is ill advised to take on a social media background check on your own. There are important legal considerations when using information garnered from a social media due diligence check especially the actions taken based on the information garnered from a social media background check.

“Social media background checks are becoming increasingly important to our private equity and venture capital clients,” stated Dennis Drellishak, CEO and Founder of CS Business Screen. “We’ve uncovered things that could have been extremely detrimental if acquisitions would have moved forward.” Dennis has over 30 years of experience in the background screening industry and specializes in due diligence background checks pre-investment.

If you’re unsure about current due diligence processes or procedures it is important to contact an organization who has in-depth industry knowledge and can shed light on certain standards. Social media is evolving at the speed of light and new content is readily available by the minute. Be sure to incorporate this due diligence component in your screening process to give you the most robust picture of your potential investments.

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