Due Diligence is simply a term meaning "doing everything you possibly can" in the situation. How you would accomplish your due diligence is different depending on each situation.
If; for example, you were hiring a new person for a position in the company - your due diligence would include such things as:
1. Checking resume for experience AND spelling, grammar, sentence construction, organization of resume, information contained; and general appearance.
2. Have a face-to-face interview with person asking relevant questions about job knowledge and ability to perform duties efficiently. Have a few tests for this person to complete - oral, written and/or computer.
3. Ask questions determined to bring out her personality. Is (s)he suitable?
4. Phone ALL references. Phone past employers. Ask them if they would rehire this employee - why or why not?
5. Check contents of resume for accurateness. Did this person really get the accolades they claim they did? Most people "inflate" their resume somewhat; but, some are nowhere the truth as others remember it.