dilligence and reasonable basis

required, rather than recommended action under diligence and reasonable basis: to have a policy requiring that research reports and recommendations have a basis that can be substantiated as reasonable and adequate why is this one only recommended, but not required? what is the required version for this matter?

I think the key aspect of the phrase is the “policy” part - diligence and reasonable basis are mandatory, however, technically having a policy that explicitly states that isn’t mandatory