Vetting

What is 'Vetting'

Vetting is a thorough and diligent review of a prospective person or project prior to a hiring or investment decision. Vetting most often refers to an individual or group, such as how a board of directors will "vet out" a prospective CEO or other top management position. Vetting of potential suppliers of a contract or business service is a common practice for the managers of a publicly-traded company, where past business results, costs and personal relationships all figure into the final decision.

BREAKING DOWN 'Vetting'

Today's economies are so global that vetting takes on an increasingly important role. Potential employees or business partners may be located on the opposite side of the globe, with teleconferencing and email replacing face-to-face contact and meetings. Vetting must often be done via the internet or by outsourcing parts of the process.

For investors, vetting often takes the more common name of "due diligence", the rigorous process of researching a potential investment prior to purchase or sale.

RELATED TERMS
  1. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  2. Directorate

    An organization headed by a director. In finance, directorate ...
  3. Network Marketing

    A sales strategy in which a salesperson attends meetings of organizations ...
  4. Invest, Then Investigate

    An investment strategy where investors purchase a stock first ...
  5. Business Judgment Rule

    A regulation that helps to make sure a corporation's board of ...
  6. Insourcing

    Assigning a project to a person or department within the company ...
Related Articles
  1. Investing

    5 Benefits of Investing With One Asset Manager

    Learn why one asset manager may be better for your portfolio’s rate of return and underlying costs as opposed to many managers.
  2. Budgeting

    Top Tips For Cutting Pet Care Costs

    Find out how to ensure that the adorable addition to your family is also affordable.
  3. Investing News

    Want To Impress Clients? Show Your Due Diligence

    Doing the learning legwork for the products and service providers you employ will expand your understanding and impress incumbent and prospective clients.
  4. Insurance

    Is Pet Insurance Worth The Price?

    Should you insure your pet? Here's how pet insurance works and how to decide if it's worth buying this coverage.
  5. Personal Finance

    Leaving the Military? Best Next-Step Careers

    Vets bring skills and stamina to the job market. These fields offer good career opportunities for those moving out of the military.
  6. Professionals

    Hard and Soft Due Diligence: What's the Difference?

    Learn about the differences between "hard" and "soft" due diligence in a mergers and acquisitions deal (M&A) and why soft diligence is increasingly important.
  7. Personal Finance

    Managing a Cash Windfall

    Cash windfalls are more common than you think. Here's what to do if you receive one.
  8. Investing Basics

    High-Pressure Sales Tactics You Should Be Aware Of

    Beware of financial advisors (and others) who use these common high-pressure sales tactics.
  9. Fundamental Analysis

    Factors to Consider When Evaluating Alternative Investments

    Factors to Consider When Evaluating Alternative Investments
  10. Investing

    Asset Manager Ethics: Acting With Competence and Diligence

    Managers must make investment decisions based on their personal investment process, which in turn should be based on solid research and due diligence.
RELATED FAQS
  1. What is needed to be a successful entrepreneur?

    Discover how successful entrepreneurs succeed through passion, motivation and accepting failure. Learn about the qualities ... Read Answer >>
  2. What are some ways employers can reduce employee turn over?

    Learn a few strategies in hiring, compensation and management that employers can use for increasing employee retention and ... Read Answer >>
  3. When is outsourcing a bad alternative to vertical integration?

    There are many things to examine when considering outsourcing versus vertical integration. One reason to not outsource is ... Read Answer >>
  4. What resources are available to an entrepreneur to raise capital?

    Learn how entrepreneurs can use various resources to raise capital and how each is beneficial throughout the different phases ... Read Answer >>
  5. How are business decisions made in a partnership?

    Understand how partners in a business can tackle decision making, and learn the options available for partnerships to develop ... Read Answer >>
  6. What are the different ways a CEO could influence stock prices?

    A CEO's influence on a stock price reflects the company's growth strategy and outlook, its financing needs and decisions ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center