Searching for Legal Problems in Executive Background Checks

Every year companies in the United States hire new executives. This is often done as a company grows and expands. The goal is always to improve leadership from a company’s top levels down to its lower levels. There has been research that shows over 40 percent of companies don’t put as much effort into screening their executives as they do their regular employees. Over 30 percent hire executives with no sort of due diligence or screening. Too many times, a lack of executive screening has ended up hurting a company.

Logical Fallacy
Too many people in the business world don’t see a need to screen executives. They assume an individual had to prove themselves to become an executive. It is believed their networks, backgrounds, histories will provide everything a company needs to know about an executive. This is known as a logical fallacy. It is important a company realizes executives can be just as guilty of the many types of issues affecting background checks of all potential employees. Many executives have fabricated their job experience. Some have claimed to have fictional degrees, others provide false work histories and more. There have also been attempts by executives to conceal prior criminal activity so they can gain access to a company.

When a company just assumes an executive candidate is being honest with them, they put their clients as well as business at serious risk. Companies often give a high level of power to an executive. When this power is put in the wrong hands, it has the potential to cost a company a significant amount of money. There have been executive candidates who have hidden prior sexual harassment cases, lied about their skills as well as failed to perform up to expectation and more.

Common Lies
Most executive candidates will tell the truth. When the few who tell lies provide information about themselves, there are some lies more common than others. Most of the fabrications are about their education, designations, training, employment history as well as certifications. Many people at the executive level are well-connected. This gives them an advantage when it comes to fabricating references as well as recommendations. When the lies of a company executive leak into the public domain, it can cause serious damage to a company’s reputation.

Public Relations Disaster
When a company hires an executive who has been deceptive with their background, it can turn into a public relations disaster. There will be individuals who know the truth about the executive’s deceptions. This could make them targets of attacks on social media and more. When this happens, companies are often left struggling to overcome what happened even after the deceptive executive has resigned.

Proper Background Check
Properly screening an executive candidate requires a different approach than with other types of employees. These employee screenings must be much more extensive. This involves utilizing all legal options available to confirm the information provided by them. It will begin by thorough basic verification of their identity. The next step will require confirming each previous employment situation. This will include validating the accuracy of the dates. It will also include confirming any information that could be easily fabricated. The verification of education should involve degree, educational awards, certifications, transcription and anything else associated with education no matter how small. Should there be any red flags that arise during this process, it could be an indication of serious issues that would require more intense screening.

Legal Research
Many databases ban electronic distribution of criminal data because of state and federal privacy laws. It is still possible to investigate all court records maintained at the federal, state and county level. This can be done at each location where an executive candidate has lived, worked and owned property. Many individuals have been the subject of civil lawsuits filed against them in jurisdictions where they previously lived or worked.

Financial History
If an executive candidate is being considered for a position where they will have significant authority, a company will want to know about the candidate’s spending habits. This could involve credit issues as well as bankruptcies, the debt they carry and more. A company doing research on executive candidates discovered 10 percent of the candidates they investigated had serious credit history issues. Over 5 percent were debtors in tax liens in their name or for a business they owned and more. These types of falsehoods are common because executive candidates know a company would be reluctant to hire someone with a history of financial irresponsibility.

A company that provides executive background checks, like Corporate Resolutions, could provide important research about an executive candidate. Having the right people in executive positions is essential for a company’s health. Performing proper due diligence is important for a successful recruiting and executive hiring process. The information obtained could confirm or reveal important things that need to be known about a high-level executive candidate.

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