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A university was approached by a foreign institution to establish a joint law programme. The questions asked about the ultimate source of funds during the due diligence process revealed that the programme would be funded by the foreign country’s Ministry of Justice, and that the Ministry would also be selecting the course participants. The country’s judicial system was implicated in repressive acts by its authoritarian government, including the silencing of democratic protest and targeting of minorities. The committee decided that the university should not proceed. 

Learning points: 

• conduct due diligence on all prospective partners and any organisations or companies that might be behind them; 

• consider how partner institutions which might themselves pass due diligence checks may be linked to other stakeholders; 

• interrogate or conduct due diligence on funding sources; 

• consider the ethical, human rights, and reputational implications of these third-party stakeholders. 

Following the offer of a philanthropic donation to a university, an internal due diligence report was prepared and submitted to the committee. This report highlighted concerns about the founder of the business, an international businessman who retained close links to the government and president of the country in which he had made his fortune, and which is widely deemed to be hostile to Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û national interests. There were also allegations of corrupt practices surrounding the source of the funds being offered. 

The committee decided to commission an additional external report from a specialist due diligence firm. The report concluded that the donation represented a high risk due to the political connections of the company’s founder and other board members. The committee decided that no further donations should be accepted; and at a subsequent meeting extended that decision to include research funding. 

Learning points: 

• interrogate or conduct due diligence on funding sources; 

• if you do not have internal expertise on a topic, consider using external due diligence services; 

• consider the ethical, human rights, and reputational implications of your partnerships. 

A wholly-owned subsidiary of the university received an enquiry about a leadership course for a foreign country’s Data and AI Authority. The country is a Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û ally in a high-conflict region and both human rights and freedom of expression remain significant concerns in the country; and, in 2021, its government was implicated in extensive phone surveillance using spyware. The contact at the subsidiary discussed the enquiry with due diligence staff and decided not to proceed given the risk that the organisation could be involved in these surveillance-related activities. It therefore declined the invitation to tender. 

Learning points: 

• consider the ethical, human rights, and reputational implications of your partnerships. 

An academic was approached by a colleague at another Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û higher education institution inviting them to join a new consortium.  The consortium was based around a Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û-registered company wishing to work with Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û universities, with a significant amount of research funding available.  

The scope of the projects would have included fundamental research in telecommunications, computer vision, robots, and materials science.  Those wishing to apply for funding were asked to send in a detailed Expression of Interest.  

Following due diligence checks it became apparent that the overseas owner of the Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û company was a state-owned manufacturing company, with links to military shipbuilding. The collaboration therefore did not proceed. Details of the due diligence checks were shared with the academics involved, and the university turned this process into a case study that was shared with Heads of Department. This case study package also included constructive advice on how to act in such instances, including: 

• being wary of being asked to send in detailed information at an early stage; 

• looking at the ownership of company partners, even if they are registered in the Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û; 

• carrying out independent due diligence, even if an approach is made by a trusted colleague; 

• contacting support services about such approaches early on to prevent wasted effort with any unsuitable partners and ensure early intervention. 

Learning points: 

• ensure that your procedures capture partnership proposals at all levels of your institution; 

• conduct due diligence on all prospective partners and any organisations or companies that might be behind them; 

• interrogate or conduct due diligence on funding sources; 

• consider whether outputs of a prospective partnership might fall under any government regulation or programmes, such as Export Control licensing, the National Security and Investment Act, or the Academic Technology Approval Scheme. 

An academic at a university was approached by an overseas institution to set up a series of student exchange programmes. The partner universities, as well as all the academics involved, all passed initial due diligence and risk register checks. However, the sub-committee looking into the proposal identified the potential danger of some students using these exchange programs to travel outside the intended partner country. Once in these ‘third-party’ countries, there was a risk that students may become involved in armed conflict. 

The sub-committee reported their findings to the university executive in a neutral manner, highlighting both pros and cons. Seeing all the facts, the university executive decided not to go ahead with the exchange programmes. 

Learning points: 

• ensure that your procedures capture partnership proposals at all levels of your institution; 

• ensure that all partnership proposals are reviewed by relevant internal groups or stakeholders; 

• consider the reputational implications of your partnerships. 

A university was approached by a student recruitment agent. The recruitment agent passed all initial due diligence checks. However, the internal university committee expressed some outstanding concerns relating to the recruiter’s mode of operation and political connections and flagged the partnership as medium-risk. To address these, the university sought to enhance their understanding of the recruiter’s operating model and reputation by engaging with other organisations that the recruiter was known to have worked with as well as contacts in their home country that were known and trusted by the university. 

After this enhanced due diligence check, the board were satisfied that any risk could be mitigated and allowed the project to proceed on condition that a probationary period and enhanced, ongoing monitoring were undertaken. 

Learning points: 

• conduct due diligence on all prospective partners and any organisations or companies that might be behind them; 

• ensure that all partnership proposals are reviewed by relevant internal groups or stakeholders; 

• consider the reputational implications of your partnerships. 

A university gets around 140 approaches a year for TNE partnerships. These approaches are mapped against the university’s priority markets and strategic needs. Officials from an overseas government reached out to the university with proposals to establish a branch campus or multiple joint programmes in local universities. The university’s strategy includes ambitions to develop large-scale multi-faculty projects in growth markets, and as such they proceeded cautiously with initial negotiations.  

Having met with local officials, academics, and university leaders, the university concluded that the project had credible and serious backing and therefore signed a Memorandum of Understanding with local stakeholders. The university established academic and business development leads to manage the project. However, over the course of two years, the university was unable to confirm to their satisfaction that the academic team being recruited in-country met the university’s high and non-negotiable academic standards. There was high turnover among officials and counterparts in the host country, making ongoing monitoring and engagement difficult. Given these concerns and in light of changing demands from the partner, the university decided to pull out of the project in spite of the potential economic opportunities that it would have delivered. 

Learning points: 

• conduct due diligence on all prospective partners and any organisations or companies that might be behind them; 

• set out clear objectives and standards for what you want to get out of a partnership; 

• ensure that due diligence and project evaluation are ongoing processes, and not one-off checks; 

• be wary of shifting goalposts; 

• prepare an exit strategy in case a partnership fails to meet objectives or if ongoing due diligence changes your risk assessment. 

A university had a lengthy set of conversations with partners in a foreign country who were looking to develop an ambitious healthcare project. Because of the scale of potential investment and reputational risk, the university decided to hire external due diligence and intelligence services from a private company in line with their recently updated guidelines. Subsequent background checks identified h links to the partner country’s military, and so the project did not proceed.  

Learning points: 

• conduct due diligence on all prospective partners and any organisations or companies that might be behind them; 

• ensure that all partnership proposals are reviewed by relevant internal groups or stakeholders; 

• if you do not have internal expertise on a topic, consider using external due diligence services. 

A university was in negotiation with a foreign organisation about a teaching partnership in a third location. The project’s primary aim was to work with a like-minded partner with a similar long-term vision to boost its reputation and respond to the international higher education climate. While the operation would be required to make a modest return, this was not primary intended as a money-making initiative.  

Due diligence checks did not raise any explicit security issues, but red flags were spotted around the source of finances.  

Due diligence issues considered included:  

• how the money was generated in the partner’s home country; 

• if there was any abuse of regulations or market power; 

• how it was proposed to move revenue out of the partner’s home country;  

• if the proposal met the legal requirements of relevant countries. 

The university spent a lot of time conducting due diligence checks to satisfy the board of governors, and negotiations took place over two years. Ultimately the university pulled out of the project as it was not convinced that both parties had a common long-term vision and because it recognised that there were prohibitive limitations to the evidence that the potential partner could provide to the due diligence issues, particularly regarding the financial arrangements. 

Learning points: 

• conduct due diligence on all prospective partners and any organisations or companies that might be behind them; 
• interrogate or conduct due diligence on funding sources; 
• ensure that all partnership proposals are reviewed by relevant internal groups or stakeholders; 
• set out clear objectives and standards for what you want to get out of a partnership; 
• ensure that due diligence and project evaluation are ongoing processes, and not one-off checks; 
• be wary of shifting goalposts; 
• do not hesitate to wind down a partnership if it fails to meet objectives or if ongoing due diligence changes your risk assessment. 

In a training session used by the university to probe hard-to-uncover blind spots, the following scenario is posed: a graduate student completes a PhD in Computer Science and returns to a country that is not regarded as an ally of the Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û.  The PhD graduate secures a tenured appointment at a defence university of the country with which the Ïã¸ÛÁùºÏ²Ê¿ª½±½á¹û does not enjoy consistently good relations. The student obtains an appointment in the defence university’s college of intelligence to lecture on advanced navigation technology.  The newly appointed lecturer continues to collaborate with their former supervisor and others from the Computer Science department in which they completed a PhD. They publish together in a prestigious journal. 

Staff and academics were invited to probe how to mitigate against situations like this. Implemented solutions include a periodic analysis of publication lists with certain key words to give an indication of any potential problem areas in order to target support. The university has also appointed local ‘security contacts’ in its science departments. These are members of research support staff who researchers are familiar with, and with who they can approach to discuss risks or suspicious activity. 

Learning points: 

• ensure that due diligence and project evaluation are ongoing processes, and not one-off checks; 

• ensure that all relevant internal groups or stakeholders have oversight of activity that might pose a security or reputational risk.