Citing a case from last year, a senior executive for a technology firm was turned down due to his involvement in betting with huge losses on Indian Stocks. The finding was workable only with formal due diligence. Shortlisting for senior positions has always been sensitive & contentious, but its criticality was only realized with rise in senior management frauds.
HR folks and recruitment consultants take extra precautions while hiring for leadership positions. Leaders are the drivers of business success. Responsible for business goal setting, achievement of financials, compliance and team motivation, leaders are cornerstone of an organisation’s success. With responsibilities, leaders also get access and privileges. This subjects business to employee risk- putting organisation’s brand reputation and financials at risk!
This is why recruiter’s delve deep into a candidate’s profile before hiring for such roles. Hiring managers conduct employee background screening on CXO level hires.
However, is this enough? At such high investment and high risk positions, does normal background screening like other employees help in mitigating risks for your business?
As it is obvious, regular employee screening is not enough!
Leadership hires should undergo thorough leadership due diligence to validate their identity, profile and reputation. The key pointers during the verification process include ethics, integrity issues, conflict of interest, management working & authenticity of the candidate. Sexual harassment cases & legal constraints too have a strong bearing on the candidate’s profile. These factors make it clear why piercing through the veil while hiring CXOs becomes an essential.
With corporate governance becoming the driving factor of all background screening practices, more precision is required in verifying the prospective leaders. Though, a thorough leadership due diligence on the senior executives can cause intrusion but its worthwhile considering the magnitude of damage caused with senior level fraud. The growing trepidation about the senior management exploiting their privilege positions substantiates the need to conduct powerful checks focusing on every aspect of the prospect’s work life.
Executive verification can vary depending upon the thoroughness of the investigation. Owing to greater fraud risk perception, higher legal liabilities & a tougher regulatory environment, a need to thoroughly screen the C-suite executives arises. The New Companies Act also necessitates increased disclosure & declaration to avoid damages of non-disclosure later.
Unprecedented number of corruption, bribery & corporate fraud cases reported in the year 2014, 2015 & 2016 have commanded higher intensity & impetus on advanced background verification of the senior executives. The transition from basic to exhaustive screening has been remarkable considering the new age risks of fresh hiring at responsible positions. A recent study indicates a conspicuous risk of shift towards strategic risks over the operational ones.
Pharma is intensely hit by corporate frauds & demands a review of the system as a whole.
Large companies are cautious about good corporate governance, which is why every minute detail contributes to making a good choice of senior executives.
With Executive Due Diligence services from experts, organisations can quickly get insights into character, credentials and competency of the candidate and hire for crucial positions quickly while mitigating risks!