What Process Ensures That Unresolved Diligence Issues Reach the Decision Makers?
Short answer. Use a written issue log tied to the approval process. For each open item, name an owner, record the evidence and possible effect, and state what would resolve it. Before a decision, send unresolved items and their consequences to the CIO or investment committee. Then document how each item affected the vote.
Unresolved diligence issues reach the people with authority when the team makes them a required part of the approval packet and meeting agenda. A concern buried in email or a working file can be missed even when someone identified it early.
Keep One Live Issue Register
Record each open matter in a shared issue register linked to the deal record. State what is unknown, the evidence gathered so far, the source of the concern, and the possible effect on capital, terms, timing, or control. Name an owner and a due date. Separate documented facts from assumptions and sponsor explanations.
For each item, define what would resolve it. That may be a contract, bank record, independent reference, court filing, or answer from a specialist. A verbal response can clarify a question, but it should not close an item when documentary or independent evidence is needed. Keep the item open until the agreed evidence is received and reviewed.
Set Escalation Rules Before the Meeting
Use the family office's governance policy to identify who can accept residual risk and who must see a material open issue. The single family office governance guide can help frame those responsibilities. Give the diligence lead a direct route to the CIO or investment committee, including when a sponsor or deal lead views the concern as minor.
Before the approval meeting, circulate an open-issues page with each item's evidence, possible consequence, owner, requested resolution, and status. Put material items on the agenda by name. Identify whether each one could require more work, changed terms, a condition to funding, or a pause. Do not bury unresolved matters in an appendix without drawing attention to them.
Require an Explicit Disposition
At the meeting, ask the decision group to address each material open item. It can request evidence, change the structure, accept a defined risk, or decline. Record the decision and the reason. If approval depends on a condition, name who confirms that condition before funding and what record will show it is complete.
If an issue could change the investment case, authority, cash needs, or downside exposure, hold approval until the relevant evidence is considered. If the group accepts an unresolved item, record the uncertainty and who owns follow-up. Carry any post-close item into monitoring with a due date and escalation route. The guide to pausing approval when information changes addresses new findings that may require the team to revisit its view.
Checklist
- Keep one issue register linked to source documents.
- Name an owner, due date, impact, and evidence needed for each item.
- Define who must receive and who can accept each open issue.
- Circulate material items before approval and put them on the agenda.
- Record the group's disposition, rationale, and any funding condition.
- Carry accepted follow-up items into monitoring with an owner and date.
Go deeper: What should a family office include in a written diligence plan?; How should a family office document the reasons for approving or rejecting an investment?.
This document can help guide the family when there is a sudden death in the family, losses in the investment portfolio overall, or a dispute of some type.
Sources: Family Office Club investor due diligence framework, The Single Family Office. Informational only, not financial, legal or tax advice.