News & Insights

The Perils of Executive Background Check Shortcuts

As social and ethical business values become a key priority across all industries and sectors, organizations are now more vulnerable than ever to the potential reputational and financial damage that may occur when executive misdeeds enter the spotlight. Despite this, not all companies perform adequate due diligence when expanding their C-suites.

Executive background checks are an invaluable tool to help companies get a clear picture of a candidate’s background and reputation. Let’s explore the differences between general and executive background checks, why deep background checks are essential to the C-level hiring process, real examples of the consequences of lax background checks, and the resources available to you through background check technology solutions.

What Is an Executive Background Check?

A standard background check covers general information on an individual, including licensing information and professional and educational credentials, as well as verifying past employment and educational claims. Often, however, these routine checks don’t go into the level of detail necessary for a candidate being considered for a senior role.

An executive background check should include:

  • Complete review of public records: Full litigation checks, including those in overseas locations where the candidate may have worked. Senior executives are globally mobile and may have lived in countries where access to these records requires specialist capacity.
  • Comprehensive regulatory review: Similar in-depth reviews are needed to rule out any potential sanctions or fines by any government authority, or to identify where the candidate is named in investigations or regulatory sanctions involving their past employers.
  • Thorough media and internet review: An in-depth review may highlight potential red flags in past or current professional and social activities, or identify behavioral issues that might contribute to a toxic workplace. Red flags may include questionable statements and controversial comments involving the candidate in the mainstream media, closed forums, social media and on internet blogs. Specialist skills will often be needed to assess information, especially those in multiple languages.
  • Credit checks: Financial risk will be a primary concern where the role includes fiduciary or FCPA responsibilities. Comprehensive credit checks provide insight into an individual’s financial stability and may reveal potential risks that could leave them vulnerable to fraud or bribery. In-depth reviews include all countries where the candidate may have lived and worked.

Risks of Lax C-Level Background Checks

Your C-suite team is a trusted group of individuals with immense responsibility. Candidates at this level should be thoroughly vetted to ensure no surprises that may lead to major financial and reputational damage. Vetting failures are often highly visible:

  • In 2012, Yahoo hired Scott Thompson as its new CEO. Thompson had embellished his resume, falsely claiming he had a degree in computer science. The false information appeared on Yahoo’s US Securities and Exchange Commission (SEC) filings, leaving the company open to disciplinary, legal, and financial liability. The resulting public “Resumegate” scandal gave rise to an understandable loss of confidence in the executive board’s hiring practices from its major shareholders.

Behavioral issues can lead to toxic workplaces and significant reputational damage. In the case of former editor-in-chief of Bon Appetit Magazine Adam Rapoport, an executive background check may have revealed racially insensitive social media posts that surfaced following allegations about his favoritism toward certain employees on the Bon Appetit team. This toxicity led to an uproar from print and digital subscribers, as well as current and former employees of Conde Nast, the magazine’s parent company. Rapoport resigned in 2020, followed by many other employees of the publication from all levels, but the damage had already been done. The publication lost nearly 10,000 print subscribers, its monthly subscriber rate decreased by 300 percent, and its monthly video views dropped by 36 percent.

These are just two examples, and there are many more. Unvetted senior executives have the opportunity to launder money, commit fraud, mislead shareholders, and expose companies to all sorts of financial corruption. Let’s also not forget that any actions of C-level employees that endanger the company also endanger anyone who works for or partners with the organization. Before skipping an all-important executive background check for your next C-suite hire, consider all the employees who are put at risk from one bad executive.

Executive Background Check Solution

While executive background checks are more thorough than standard background checks, they don’t have to be difficult or complicated. By integrating an effective executive background check solution, such as ExecCheck from IntegrityRisk, you can be confident in your process of assessing the bonafides and reputation of your C-level hires. With ExecCheck you’ll be able to:

  • Access our smart technology, experienced researchers, and handpicked global network of over 250 on-ground experts spanning six continents through one easy-to-integrate, streamlined system.
  • Initiate a complete review of public records, professional and educational credential verification, media and internet data, and financial information, often across multiple jurisdictions if necessary.

Get Started With ExecCheck

Every organization wants to have a clear understanding of who they’re hiring, especially at the C-level. Executive background checks are an important part of the hiring process to give you confidence that you’re hiring the right candidate. To perform the most effective executive background checks for today’s globalized workplace, you need the most advanced global solution. Contact us to see how ExecCheck can help you create an exhaustive view of a subject’s background and reputation before you welcome them to your team.