Executive and board member background investigations help organizations avoid unpleasant surprises. Investors, the media and the public often judge a firm by the individuals who are in high-profile positions, since they become the face of the organization. A new executive should be an asset, not a liability.
Why Can’t HR Just Google Someone?
Your human resources department cannot just Google a candidate and find out everyone they would need to know. First, the HR department would not know what to look for, as the information needed to make an intelligent decision varies according to the individual’s potential position. For example, Corporate Resolutions will check for a fund manager’s potential conflicts of interest. Second, your organization’s HR department would not have easy access to industry-specific trade journals that could help establish a fund manager’s reputation among his or her peers or international information.
Who Uses Executive Background Checks?
Private businesses, publicly traded companies and nonprofit organizations that are concerned about their reputation use the services of companies such as Corporate Resolutions. Background checks are vital when hiring key employees, considering board members, investing in a company, choosing vendors and in mergers and acquisitions.
Where Do Firms Get Their Background Information?
Depending on why someone is engaging their services, Corporate Resolutions uses their own proprietary databases, sanction databases, online sources and publically available information to create a profile of an individual. They also do criminal background checks, social media reviews and perform personal interviews to develop a well-rounded profile of an individual. Special services may include surveillance, computer forensics and forensic accounting by former government agents.
Proactive Reputation Management
A CEO or other high-level executive’s reputation will generally determine consumer’s trust in a company or charity, which affects the organization’s bottom line. Cell phone video recording capabilities and instant communications via social media leave organizations at the mercy of their CEO’s public actions when they are not at work.
Recently, a CEO smoked pot during a podcast and the co-CEO of a major skin care line posted bizarre social media posts, leaving many, including investors, worried about his ability to lead. A CEO of a ride-sharing company had his tirade at one of his drivers caught by the dashcam and it went viral. The video highlighted the CEO’s childish behavior and inability to control his temper. Actions such as these real-life examples can damage the corporate culture and affect the company’s revenue.
Private Equity Due Diligence for Investors
VC firms can turn to Corporate Resolutions to help them determine whether a company is a wise investment or whether a firm’s founders are engaging in behavior that will cause investors to want to distance themselves from their investment. For example, Corporate Resolutions had a client who was considering investing in a hedge fund. An investigation found that the SEC had sanctioned the person running the hedge fund on multiple occasions and he had various fraud convictions. The hedge fund’s reputation soon imploded, however, Corporate Resolutions’ client avoided being associated with the hedge fund by the media, saving their reputation.
Corporate Resolutions also verifies college degrees and professional certifications on resumes. A surprisingly large number of people lie about having a college degree. A CEO candidate may have years of experience and the proven skills to do the job; HR may not bother to verify a degree that is decades old. While the lie may not affect the CEO’s job performance, the truth will come out. An ex-spouse, a disgruntled employee or someone who has a grudge against the person will expose their secret.
Background investigation companies vary in their ability to gather information. Corporate Resolutions is operated by a former FBI Special Agent. The firm specializes in helping clients in the alternative investment community. By operating an ethics hotline, Corporate Resolutions offers a vehicle for a client’s employees to report inappropriate or unethical behavior. The firm passes on the information to the client’s designated recipients. Individuals making a report are guaranteed anonymity, which encourages individuals to use the ethics hotline instead of talking to the media or complaining on social media.
A background check is an investment in proactive reputation management for your company or organization and having one done allows you to make decisions with more confidence.