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Director Due Diligence

Get to know a director’s past and present activity and mitigate the risk to your business

Understand the risks a director can pose to your business

 

Identifying the past and present behaviour of a director of a company you're dealing with is an accurate indicator of the future of a business.

  • A director with a payment default is 5 times more likely to experience another one.
  • A director with a court action is 2 times as likely to have another one.
  • A director with a failed business is 2 times more likely to fail again.

Aside from the statistics above, there are other points to consider. If a director becomes individually bankrupt, they can slip through the cracks and still operate even though it is illegal to do so. 

This can often be flagged with slight name and address changes. You can be alerted of these changes with CreditorWatch’s Director Due Diligence feature.

If a director sets up another company with small changes after an insolvency, this could also be an indication of illegal phoenix activity. 

Illegal phoenix activity is the process in which a new company is created to continue the business of an existing company that has been deliberately liquidated to avoid paying outstanding debts - including taxes, creditors and employee entitlements. 

To learn more, download our free white paper on Combating Illegal Phoenixing.

What is Director Due Diligence?

 

CreditorWatch’s Director Due Diligence feature keeps you informed 24/7 of the activity of the individuals behind a business. 

Director Due Diligence alerts you via email when there are adverse cross directorships in your ledger and identifies valuable director bankruptcy data.

Click below to find out more.

Cross directorships

A cross directorship defines when the director of one company is also the director of another company. 

Some cross directorships can pose a risk to your business. When the director of a company you are monitoring has an adverse action registered against another one of their companies, this can indicate you may eventually feel the effects of that action.

When the director of a company you are monitoring has an adverse action registered against another one of their companies, you will receive an email alert. 

You’ll be informed of negative changes including court actions, payment defaults, insolvency notices, mercantile enquiries and status changes.

Bankruptcy data

With the support of the Australian Financial Security Authority (AFSA), Director Due Diligence also provides historical bankruptcy data that’s updated every hour. 

Use this data to aid your bankruptcy searches across multiple individuals across CreditorWatch.

You can search for the name, date of birth or location of a director to enhance your credit risk assessment, flag possible bankruptcies and reduce the cost of NPII reports.

The Benefits of Director Due Diligence

  • Identify bankrupt, or previously bankrupt, individuals
  • Identify variations in names, addresses and date of birth
  • Seamless integration into existing commercial credit reports
  • Run reports on directors, sole traders, partners or guarantors
  • Identify potentially harmful cross directorships
  • Receive alerts of adverse changes to a company

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