Why background screening for high-level hires should be a priority for all organisations
By Erik Schmit, EVP & Managing Director, Asia Pacific, First Advantage
Leadership is more than a position or title; it is action and example. When companies rely on their senior executives to set strategic direction, galvanise employees and steer them towards success, appointing the right captain becomes mission-critical. This process begins with acquiring an accurate and in-depth understanding of the candidate’s background.
It is a common misconception that candidates for a senior executive position would not stoop to falsifying or hiding information. In a perfect world, we could perhaps accept everything provided by a candidate at face value. In reality, however, discrepancies do exist.
According to First Advantage’s 2016 Asia Pacific Annual Trends, discrepancies relating to employment history are most common (57.7 percent), followed by education (19.3 percent) and database (18.9 percent). Database checks refer to a name check against a collection of various databases that include media, addresses, passport identification, company registry and more.
To put this in the real world context, consider that in Hong Kong, a senior executive armed with fake qualifications managed to land herself a HK$870,000 (S$152,000) position as CEO of an education company. She was later convicted of fraud. There was also the case of Yahoo’s former CEO, who embellished his resume and exaggerated his academic credentials.
Myer, a leading retail chain in Australia, was also duped into hiring a new general manager based on his misrepresented employment history. It was only through an in-depth background verification check, conducted after he had joined the company, that the truth was uncovered. Shockingly, it turned out that Myer was not the only company to fall prey to his dishonourable actions; former employers had been hoodwinked as well.
Mitigate risk with background screening
Background screening is important for entry-level employees and mid management hires but at the senior executive level, it is nothing less than essential. This is especially so because of the extent of their responsibilities, the authority that they are bestowed and the access they enjoy to business-critical information such as company details, financial results, business strategies and client data.
Before entrusting an individual with a leadership position, it is the onus of the employer to conduct a thorough, far-reaching background check. This is part and parcel of due diligence in the hiring process, and a necessary step to minimise hiring risks.
Today, many leading organisations opt for an in-depth, investigative background check—one that goes beyond the standard criminal record searches as well education and employment veriﬁcations—to proactively uncover ‘the good, the bad and the ugly’ about a candidate.
For example, it is good practice to conduct financial checks on a candidate to determine if they have negative records regarding bankruptcy, credit standing and money laundering. Financial regulatory checks will further reveal if the candidate has been prohibited, disqualified or auctioned by a financial regulatory body in the hiring country.
As more executives live, study and work abroad, it has also become increasingly important that employers are able to procure such information on a global basis, and in a timely manner.
To deliver a reliable and compliant screening programme, companies can benefit from an alliance with a background screening partner experienced in the dynamic regulatory environment. The ideal provider should be deeply familiar and up-to-date on the latest laws and legislations governing the background screening process. Its primary role is to check candidate credentials in a safe and legal manner so that companies can continually hire the right talent for their business.
The success or failure of any company depends, to a large extent, on its leader. Background screening cannot guarantee business success but it can certainly help ensure that the right candidate is at the helm—and that could make all the difference.
Originally published in The Business Times Singapore, p.23, 20 April 2016 and Human Resources, p.33, June 2016