Although candidates for senior executive positions can sometimes skirt around companies’ employee background checks, the Society for Human Resource Management suggests they’re the ones in need of comprehensive background checks the most.
As the company’s public face, executives who fabricate their credentials can cause significant damage to brand reputation, leaving your organization vulnerable to financial repercussions.
The scandal over misrepresentations of former Yahoo CEO Scott Thompson is the perfect example of this, emphasizing the need for background checks for executive jobs. Here are 10 reasons why you need to conduct a detailed background check when hiring an executive.
1. Confirming Education History
Even though 23% of employers never check the education credentials of their candidates, nearly nine in 10 managers have caught applicants misrepresenting their education history.
When hiring executives, you need to include comprehensive education verification in your background check to help you expose falsified education records before they escalate into potential problems for your organization.
2. Uncovering Negative News Reports
When running a detailed background check, you should review news outlets to unearth any existing negative coverage of your executive candidates. Hiring a senior employee who’s been publicly accused of possible wrongdoings, such as fraud, mismanagement, or sexual harassment, could potentially damage your company’s reputation.
Most online background check services won’t include a news review. So it’s essential to incorporate this search in your background check to gain a better understanding of your candidate’s public image before hiring them.
3. Finding Detailed Criminal History
You can run a criminal history check with nearly any online background check service. These checks are essential for senior-level executives, especially if the criminal history relates to their job duties. For example, a fraud conviction would be a major red flag for a CFO position, since it would raise doubts about their capability to make sound financial judgments.
We recommend you search for charges in every law enforcement jurisdiction where your candidate has lived or worked. You should also search as far back in time as jurisdictional regulations allow. The US Fair Credit Reporting Act limits the lookback window for criminal charges to seven years, while some states, like Texas, make exceptions for high-paying jobs.
4. Verifying Professional Licenses
When hiring an executive, you have to verify their professional licenses with the relevant state licensing groups—for example, state bar associations for lawyers and state medical boards for doctors.
A detailed background check should uncover whether your candidate has had their professional license revoked or suspended for any reason. If so, this could indicate that your candidate has been accused of professional misconduct.
Regular background checks typically don’t include professional license verification. However, excluding this step from your process could cause you to overlook important professional red flags, which may later pose significant problems.
5. Checking Employment History
While employment history is among the information included in basic background checks, you need to ensure your employment confirmation process for an executive is especially thorough.
It’s essential to confirm job duties and dates of employment directly with each of your candidate’s former employers, including international ones. This will catch any potential misrepresentations ahead of time, saving your company from possible financial and reputational consequences.
