The Rise of Executive Background Checks

With the recent corporate scandals of Enron and WorldCom, the popularity and necessity of executive background checks has greatly increased. In order to protect themselves from potential disasters later on, many companies are now requiring extensive investigation on prospective executives to verify their employment and educational history as well as information regarding any past wrongdoings.

As with any other type of pre-employment background investigations, employers need to have the appropriate disclosures available. According to Federal law and the Fair Credit Reporting Act, applicants must sign and date specific disclosures regarding the various types of background checks employers desire. It is important to respect the privacy of potential employees while maintaining the company’s hiring standards.

Although executive-level background checks are becoming increasingly more popular, there may still be some hesitation as to how far to take them. Many high-level executives seem to think of their atmosphere as more of a society, or ‘country-club’ feel. They may not feel comfortable about performing checks on executives and in many cases, do not feel it is necessary. Human Resource managers in the executive level seem to also have some hesitations to conducting extensive background checks. Many of them feel as if their network of peers is enough to get the information they need and may neglect to further investigate a potential employee. The Wall Street Journal suggests that many top-level hiring managers may ignore the reference list provided by the would-be-executive to utilize their own connections in their past companies.

Whatever the reasoning behind conducting background checks, employers need to be aware of the Federal and State laws regarding such investigations. Most reputable investigation firms adhere strictly to these guidelines. Using one of the top firms can save headaches in the future while being sure that the information is fair, accurate and thorough. The employers themselves, however, can obtain some information. Educational references can be verified by contacting the academic institution, work and salary history can be obtained by contacting former employers, and character references can often be sought by contacting various people who know the prospective employee. Regardless of the method used, it is certainly in the company’s best interest to know who is working for them. In the case of top-level management, an executive background check is necessary and vital to the ongoing success of the establishment.