"You've got to know what you're getting involved with and analyze it, and if you don't know how, then you need to back off and learn. That's the function of due diligence." This was not said in context with a pending corporate business deal between two companies... or with regard to hiring a board member or senior executive...

This was said by Ray Alcorn, a commercial real estate investor and developer, who was quoted in Sunday's NYT. The article, Doing Your Homework Before Closing a Deal, is about conducting investigative research before investing in commercial real estate.

While Alcorn was referring to his business, his wise advice could not be more sound or applicable to anyone who does business. Every day Caveat helps people do their homework. If you are planning to merge with another company, do you really know what you need to know about their leadership's backgrounds? If you are bringing in a new board member, are you sure there is not anything from that person's past that might embarass your company?

I hated doing my homework in school, but the results went a long way. It's same in business today. If you make the effort to learn, there is really no dollar value on your payoff.

--TB