Always Do a Background Check

background check

Period.  Always.  No exceptions.

When an executive carries the baggage of resume deception or any mis-representation of credentials, it upheaves and corrodes the organization.    Note this recap of a hoo-hah, as reported by James Stewart in the New York Times.

Scott Thompson, a new CEO recruited to Yahoo from PayPal, put forth inaccurate information about his educational credentials, claiming a degree in both accounting and computer science.  It has now been verified that he only holds a degree in accounting, which does not provide the valued street cred in engineering-centric Silicon Valley.

The taint spread quickly, oozing throughout the corridors of the company, making its way to the boardroom and outside advisors — giving the upper hand to a dissident shareholder.

Here’s the casualty count:

  • Thompson is out.
  • The company must now recruit its fifth CEO in a five year period.
  • Embarrassing flip factor – Thompson’s tenure was only four months.
  • Scrutiny spread to the executive search firm Heidrick & Struggles, which slapped back the accusation of credential mix up as “…verifiably not true.”
  • Three of the board’s seats have now been won by the activist shareholder.
  • Toting up all board resignations, eight of Yahoo’s 11 directors will have joined the board this year.

If this level of damage can be inflicted inside a $5 billion company in the sophisticated playing field of Silicon Valley, imagine the impact in smaller-sized businesses or non-profits.

Some governance ground rules:

  • If you are the hiring decisionmaker — or a CEO or board member involved in approving a new hire – you must always ask the question and always insist that a background check be conducted on key hires.
  • It is the company’s job to expedite the background check, not the recruitment firm.
  • Background checks can be extensive and expensive.  Tell HR what you want — or engage a firm yourself.
  • Read the findings.
  • There is no upside in giving someone a pass.
  • Always include a caveat in the offer letter or employment contract, i.e., contingent upon successful completion of a background check.
  • When you interview candidates, look them in the eye and tell them the process will involve an in-depth background check.
  • Watch for the reaction….you might hear an interesting story or two.
  • Ask detailed questions.  If there are discrepancies between the responses and the resume, move on to the next candidate.
  • A lie is a lie is a lie.

copyright 2012 Nancy Keene All Rights Reserved

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Copyright © 2012 Nancy Keene