(Today’s guest blogger on the Front Line is Robert E. Reilly Jr., the Chief Executive Officer and Founding Partner of executive search firm Reilly Partners – and the CEO of both Reilly Partners’ Private Equity Solutions Practice and Board Services Practice. His client list includes some of the best Fortune 1000 companies in corporate America, spanning industries from private equity to professional sports.)

People are not always who they seem to be. Today’s headlines are littered with stories of executives claiming fake degrees or CFOs with a history of tax evasion – embarrassing exposés that would put any employer to shame. Twenty years in the executive search industry has taught me firsthand the importance of due diligence concerning candidate background checks, and how to develop your own instincts before letting a bad candidate get too far into the process. Before an investigation firm steps in, I perform my own due diligence using these key rules:

1. Listen for “We” vs. “I”

Nobody wants a selfish leader. Our firm once had a candidate that retained 99% of the funds from the charity he led, choosing instead to use the money for his own means. While using “I” too often does not always indicate money swindling, it does suggest that these individuals are more inclined to credit themselves first. A successful executive is going to prioritize the company and their team before personal gain, and keeping an eye out for certain pronouns gives me insight into how they prioritize people within their work environment.

2. Don’t Ignore the Rumors

On two occasions our clients and network of contacts have been vital in helping us uncover a bad candidate. For instance, during one high-profile search we started fielding calls from several people in our network that described suspicious promises from one of our candidates. This particular person was promising jobs and financial compensation to people who agreed to vote for him when the time came to choose a new leader, and we took this information to heart. Once the time came for our investigation firm, Hillard Heintze, to step in, his suspicious behavior was confirmed. It is never a good business practice to immediately trust rumors, but when you hear a story often enough I find that they are often worth investigating.

3. Watch for Inconsistencies

By the time a candidate meets with a client, they have already interviewed with both our research team and the Managing Director leading the search. Some red flags that we look for throughout these interviews are inconsistencies relating to: compensation, job transitions, or even dates on their resume. A majority of the time we are able to clear this up on our own, but for a select few these inconsistencies have led to larger red flags uncovered during the background investigation. Most of our candidates – say, 95% – come out clean, but it is the other 5% we need to watch out for. I mentioned a few war stories from my experience, but a vast majority of the time we interact with respectable leaders that go on to accomplish great things for our clients. I’m sure many of you have war stories of your own. What other valuable tips have you learned?  What red flags do you look for?

 

Pre-transaction due diligence: is a Google search enough?
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