Why background screening for top executives is a necessity

September 08, 2016 13:30
A company could suffer reputational damage and loss in productivity by hiring a less-than-satisfactory chief executive. Photo: bdlive

When we think of C-suite executives, we think of well-dressed, untouchable leaders who cannot possibly do any wrong.

After all, that has to be why they are seated comfortably in the C-suite, right?

Well not quite, at least not in the following case in Hong Kong.

Early this year, a chief executive was convicted of fraud for using fake credentials to attain her position, her monthly paycheck worth a tidy sum of HK$88,000.

Not only was she stripped of her position with immediate effect, the company suffered reputational damage and loss in productivity for hiring a less-than-satisfactory CEO.

Clearly, there has to be some form of check and balance in place when it comes to C-suite executives.

According to HireRight’s 2016 Employment Screening Benchmark Report, a worrying 80 percent of Asia-Pacific companies fail to rescreen their existing employees promoted internally as well as executives who were hired externally.

It is a common misconception for companies to think that candidates for an executive position would not resort to underhanded means like falsifying or hiding information.

In an idealistic scenario, perhaps this is so -- however, with so much at stake, should we simply accept everything provided by a candidate at face value?

The prevalence of fake degree mills and fake academic credentials in China is also not a reassuring sign -- needless to say, companies need to tread carefully when senior (and therefore higher-risk) appointments and fraudulent cases are concerned.

Thankfully, executive screening is increasingly being seen as best practice by leading organisations -- it helps companies have a better understanding of a candidate’s background, reducing hiring risk overall.

However, why are some companies still unwilling to conduct executive screening?

It could all just come down to this: it is simply improbable that the said candidate, given the long years of experience and countless referrals from previous companies, could be suspicious enough for the company to even consider executive screening.

But can we ever be sure?

Case in point -- Vish Nandall, then a highly esteemed chief technology officer at Telstra, was reportedly dismissed for falsifying his academic credentials.

Incidents like these is when the age-old "better be safe than sorry" adage comes into play to ensure that your candidate’s seemingly glowing resume is truly authentic.

Perhaps the employee has already been screened in his/her previous company and therefore does not warrant another check that expends resources and time since one check is sufficient.

However, can we say for sure that the screening process was enough to cover all aspects? For peace of mind, it is necessary for a more comprehensive check -- you definitely would not put your company’s reputation on the line to save money in the short term.

In addition, it would be prudent to rescreen candidates, especially if the said employee’s previous work experience is from another industry -- there might be more components to the background check that might have been missed the last time.

Overall, implementing a screening policy for executives and a rescreening practice when companies promote internal staff to C-level positions, should be an essential requirement for every organisation, large or small.

With the reasons addressed above, it is now up to companies to embrace the paradigm shift and to make background screening on C-suite leaders a necessity.

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Managing Director, HireRight Asia Pacific