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Executive Background Checks: Identifying & Investigating Hiring Red Flags

Attracting top, senior-level talent remains one of the key metrics driving organizational success. Nowhere is this more important than in the executive board room where those entrusted with stewardship drive both shareholder value and define expected behaviors. Numerous global firms have been called out for failing to confirm the efficacy of their key candidates. A bad appointment at this level can spell disaster both financially and reputationally, and even more so when this could have been averted through prior diligence and being made aware of the benefits of knowing your staff.

Let’s break down the essential pieces of a comprehensive executive background check that provides companies with confidence and trust in their chosen C-suite team.

1. Complete Review of Public Records

A comprehensive review of public records is a critical piece of an executive background check and should include full litigation checks and both local and global employment histories. Senior executives are globally mobile and may have lived in countries where access to these records requires specialist capacity. In many cases, a professional analyst review will be key to navigating language and cultural obstacles to gain access to foreign financial, legal, criminal, and other records.

The role of C-suite executives is under more scrutiny than ever when it comes to professional conflicts of interest and investment. Employment records not only verify work experience but also reveal potential conflicts of interest.

Red Flag: As ethics become increasingly important in any business environment, be careful if a review of public records reveals potential conflicts of interest regarding previous employment or previous or current professional or personal investments. For example, hiring an executive with a personal financial investment in an affiliated organization may be considered a conflict of interest.

2. Education Verification

It might be surprising to many employers that even at the C-suite level, candidates embellish their educational qualifications, and they get away with it because companies neglect to verify education. With modern technology, it’s become even easier for candidates to provide false documentation that might pass for legitimate under a standard background check.

For example, US Representative George Santos was not vetted for degrees he claimed to have earned from Baruch College and New York University. Only after he was elected to office was it revealed that neither college had any record of his education. While not an executive at a business organization, his prominence as a political figure and the lack of due diligence conducted during his background check only exemplifies the level of background verification necessary for senior leadership in both the public and private sectors.

Thorough education verification will go beyond any documentation submitted by the candidates themselves, such as a diploma, and check directly with the institution for records of their enrollment and transcripts. Without this evidence, it not only reveals a candidate’s willingness to falsify educational claims for the new position, but it also questions their ability to have successfully performed any of their previous roles, for which they likely submitted the same false education credentials.

Red Flag: Any discrepancies in educational claims are a clear red flag. This includes a lack of enrollment records at institutions, incorrect GPA (many candidates will include a GPA on their CV), or other inconsistencies. Even small differences that may seem innocent, while perhaps not critical to the job experience, can shed light on a candidate’s honesty. If they’re willing to falsify their experience, there’s no telling what else they’ll be willing to do once they have the access and power afforded to them in their new position.

3. Comprehensive Regulatory Review

When it comes to regulatory reviews at the C-level, it’s not only key to check for a particular role the candidate may have played in compliance and regulations, but also to look for any associations the candidate might have with companies under regulatory investigation. In-depth reviews rule out any potential sanctions or fines by government authorities and identify where the candidate is named in investigations or regulatory sanctions involving their past employers. This is critical to conduct on a global scale, as regulations vary from one jurisdiction to the next.

Red Flag: Look out for previous employment at a company that was subject to an enforcement action or scandal during or near their tenure. The candidate may not have been specifically involved, but even an association with an investigated organization can have a negative reputational impact on your company. Also, keep in mind, as regulations vary in different jurisdictions, a candidate may be completely clear in one country but have a previous employer from another country that is under investigation.

4. 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. A media review should include:

  • All social media platforms
  • Press publications
  • Public and private internet activity
  • Dark web presence
  • Habits, tone, content, and online reputation

Specialist skills and human intelligence will often be needed to access and review media information, especially those in multiple languages. The right solution will combine the power of technology and experienced human insight to provide a comprehensive view of any candidate in the media. 

Red Flag: Questionable statements, controversial comments, and problematic activity involving the candidate in the mainstream media, closed forums, social media, and on internet blogs. Even a social media post from years ago can resurface and result in reputational damage to the company. For example, former Editor in Chief of Bon Appétit, Adam Rapoport, was forced to step down after a racially insensitive photo of him on social media came to light. The ripple effect the photo had on the magazine and its parent company Condé Nast was significant, resulting in many employees resigning and others coming forward, citing other executives’ racist and sexist behaviors.

5. Credit and Financial 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.

Red Flag: If a candidate has trouble managing their own credit and financial status, a company should be very careful about trusting them with financial responsibility in the C-suite. This is especially important for company officers with fiduciary responsibilities. In-depth reviews include all countries where the candidate may have lived and worked during their career history.

Be Confident in Your Executive Team with IntegrityRisk

At IntegrityRisk, we recognize the importance of trust. That’s why our ExecCheck platform goes beyond standard background screening to provide the in-depth verification needed to secure this trust in the executive hiring process. To learn more, download our ExecCheck info sheet.