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Due Diligence Matters - November 2026 Bulletin

Please click here to read our October edition and please click here to watch our video which introduces perfORM and each of our core ODD services. We hope you enjoy our monthly e-bulletins and would like to continue receiving them.

Our clients are global and diverse, including Investment Managers, Allocators (e.g., Family Offices/Multi-Family Offices, Private Banks, Wealth Managers, Funds of Funds, Asset Managers, Pension Funds, Endowments, Foundations), Third Party Service Providers and Sports Teams. Please contact us if you would like to discuss support, or to receive sample ODD Reports, thank you.

Governance

Governance is a core component of an investment manager’s operating model. It provides the framework for oversight, risk management, accountability and the protection of investor interests. From an operational due diligence perspective, governance extends beyond investment decision-making to the structures, processes and controls supporting both the manager and the funds it oversees.

At manager level, governance is typically reflected in the firm’s ownership structure, organisational hierarchy, committee framework and allocation of senior responsibilities. Senior management should oversee critical operational activities, while compliance personnel should have sufficient authority and independence to challenge decisions and escalate issues when necessary.

At the fund level, governance processes should provide effective oversight of the fund’s operations and help ensure that it is managed in accordance with its governing documents, applicable regulations, and fiduciary obligations. Depending on the fund structure and domicile, oversight may be exercised by a board of directors, independent directors, trustee, advisory committee, or other governance body. These bodies typically oversee matters such as conflicts of interest, valuation issues, material operational events, risk management, policy exceptions, and other significant matters that could affect the interests of investors.

From an operational due diligence perspective, strong governance is demonstrated not merely by the existence of policies, committees and formal oversight structures, but by evidence that these mechanisms operate effectively in practice. Indicators of mature governance include regular and well-documented committee meetings, formal minutes, clear escalation and reporting procedures, periodic policy reviews, effective management of key-person and succession risks, independent challenge, timely remediation of identified issues, and a culture of transparency, accountability and constructive oversight.

Recent regulatory findings reinforce these principles. In its October 2026 review of governance arrangements within the benchmark administration sector, the Financial Conduct Authority emphasised the importance of effective oversight, clear accountability and constructive challenge. The review highlighted the need to assess how governance operates in practice, rather than simply confirming that formal governance structures are in place. (FCA review)

Regulatory enforcement activity has similarly underscored the importance of substantive governance. On 4 March 2026, the Commission de Surveillance du Secteur Financier published details of an administrative sanction against an investment firm, identifying deficiencies relating to corporate governance, central administration, internal control functions, audit arrangements, and the responsibilities and collective suitability of the management body. The case serves as a reminder that governance effectiveness is judged not only by the existence of formal structures, but also by the extent to which they are implemented and operate as intended. [cssf.lu]

Ultimately, the value of governance lies not in the existence of formal structures, but in their effective operation. Strong governance supports robust oversight, timely decision-making and clear accountability, enabling investment managers to manage operational risk, meet regulatory obligations, safeguard client assets and protect investor interests.

perfORM’s ODD Report Solution: Operational Due Diligence for Investment Managers and Allocators 

perfORM’s ODD Report Solution is not just another tick in a box, it is a fast-growing and innovative approach to operational due diligence. A pragmatic solution for investment managers and service providers which engage us to complete an ODD review.

“We believe in operational excellence, doing things ‘the right way’ and holding ourselves accountable for delivering institutional-grade asset management. Working with perfORM to review our processes thoroughly is key to ensuring our investors have independent insight, understanding, and confidence in how we manage their assets. We appreciate the perfORM team’s forensic review of our documentation and processes and look forward to collaborating again” – Investment Manager, ODD Report Solution client

Contact perfORM to discuss ODD support or to receive a sample ODD report.

You can also read our October bulletin edition and watch our new video which introduces perfORM and each of our core ODD services.

ODD Report Solution Clients