While many employers use pre-employment screening as a tool to select the best applicants for low and mid-level jobs, some skip this essential step when hiring executives. Unfortunately, taking such a shortcut can be costly. Employing a CEO, CFO, Vice President, President or other executive who has lied on his or her resume or has a history of negligent behavior can result in financial as well as reputational consequences.
Just consider the example of Veritas Software. In 2002 they discovered their Executive Vice President and Chief Financial Officer, Kenneth Lonchar, had fabricated his educational background, claiming an MBA when he only possessed an undergraduate degree. When they forced him to resign, the company’s stock plummeted 16 percent—all due to a situation that could have easily been avoided with a background check by a qualified employment screening service.
Veritas Software is not alone. A quick Google search will reveal dozens of high profile cases involving executives who were fired, fined or forced to resign due to resume “inaccuracies” discovered years after they were hired—and those are only the stories the media covered. According to some experts, one in every six executive resumes contained falsifications in 2013.
If your executive background check process is the same for executives as for lower level employees—or you’ve been skipping the step altogether—consider doing an executive background check that can address the unique hiring challenges executive candidates present.
- Little Time – Executive job seekers don’t have a lot of it. Look for a service provider that works efficiently, professionally and is sensitive to your executive candidate’s time constraints.
- Extensive History – Many executives have decades of experience, and verifying the last few years of their history may not be enough to uncover potential issues. Look for a pre-employment screening product with at least a 10-year scope.
- Make sure the candidate has not EXCLUDED some portion of their past employment as this could be a red flag.
- Regulatory Issues – If your candidate held or holds a professional license with a state or federal regulatory agency, it’s important this be investigated to find out if they have been sanctioned by the respective agency.
- Personal and Business Financials – Executives are in a unique position to impact your company’s financial health. Include a background check service that looks into the job seeker’s financial management and credit history (where allowed by law).
Don’t let a bad hire at the executive level damage your business. Falsified credentials, financial and legal issues, arrests and criminal convictions, hidden affiliations and sanctions may all indicate a particular candidate is not the best addition to your executive stable. Without a thorough background check, you may not discover an issue until it is too late or worse, cost you thousands of dollars.