Do you think stringent Background Check on CXOs is justified?
With corporate governance becoming the driving factor of all background screening practices, more precision is required inverifying the prospective leaders. Though, a thorough verification 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 focussing on every aspect of the prospect’swork life.
Citing a case from last October, a senior executive for a technology firm was turned down due to his involvement inbetting 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.
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 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.
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The key pointers during the verification process include ethics, integrityissues, 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 piecing through the veil while hiring CXOs becomes an essential.
Large companies are cautious about good corporate governance, which is why every minute detailcontributes to making a good choice of senior executives.