Navigating New Due Diligence Considerations in a Shifting Political Landscape

[Anonymous]

Introduction:
As the political climate in the U.S. continues to evolve, so too do the risks and considerations associated with due diligence. Historically, diligence efforts have focused on financials, operations, and legal risks. However, in today’s environment, new factors—ranging from corporate social responsibility to legal affiliations—may have material implications for valuation, reputational risk, and long-term viability.

For example, should acquirers scrutinize a target’s past DEI (Diversity, Equity, and Inclusion) initiatives and public statements to assess potential financial or consumer backlash? Should the law firms a target has engaged with or the weight of alumni from specific universities in its workforce be analyzed, given how politicized certain institutions have become? Could a target’s recruitment practices or school affiliations impact future brand perception, regulatory scrutiny, or even consumer sentiment? And if so, how should these factors be incorporated into risk assessment and valuation models?

Question for Discussion:
Are there emerging due diligence considerations that M&A professionals should account for given the shifting political landscape? What areas deserve greater scrutiny today that may not have been on the radar a year ago? How are firms adjusting their approach to factor in reputational, regulatory, and consumer-driven risks in M&A decision-making?

Would love to hear insights from those on the front lines. Have you seen these issues come up in transactions, and if so, how were they addressed?

[Author]

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