The Wall Street Journal published an article the other day about why red flags were missed in background checks on a number of high-profile cases in which an employee’s “prior transgression or act of concealment embarrasses a well-known company or university.”
Yahoo confirms CEO is out after resume scandal,
NEW YORK (CNNMoney) — Yahoo CEO Scott Thompson is out after it was found he padded his resume with an embellished college degree, ending his term at the company after just four months.
The SF Chronicle reports today, (Oct. 30) that the new Chief Executive Officer of Bausch and Lomb is required to forfeit an incentive bonus of “at least” $1,100,000, because of his false claim of an NYU MBA, but he gets to keep his job.
On the other hand, the CFO of Veritas Software was forced to resign last week, because of his false claim of a Stanford MBA .
Reports about an alleged job fraud pulled off by a Deputy General Manager of IBM, Mr R. Nandan, has once again highlighted the issue of resume scams, purportedly, 33-year-old Mr Nandan duped two big corporate houses, HP and Amicorp, with fake educational certificates before joining IBM last year.
Ex-SAC Trader Was Expelled From Harvard Law School
Mathew Martoma, formerly of SAC Capital, is on trial on insider-trading charges.Credit Andrew Kelly/Reuters, A federal jury will decide whether Mathew Martoma, the former hedge fund manager, cheated when he worked at SAC Capital Advisors, but there’s no denying he cheated when he falsified his grades at Harvard Law School some 15 years ago.
And it’s not just embarrassing misrepresentations. The government contractor who killed 12 people at the Washington Navy Yard last week was driven by delusions that he was being controlled by low-frequency radio waves and scratched the words “End the torment!” on the barrel of the shotgun he used, the FBI said Wednesday, offering new, chilling details of the attack.
So why did background investigations fail?
1￼.There is no one-stop shop
Conducting a background investigation is not as simple as throwing a name into a computer that then spits out the data. For one thing, there are still quite a number of manual processes that need to be completed. But also, there are hundreds of sources of information and hundreds of data points that need to be researched and analyzed. Some firms rely on a single-source database for their background investigations, but the fact of the matter is that there is no single source that captures all the data.
2￼.Technology gives false confidence
A lawyer once joked that private investigators are just an expensive Google search. You ask other people, and they think Google has all the answers. It certainly may be able to help lead you to the all the answers, but until Google indexes all the world’s information (which Google has said will take 300 more years), it’s not even close.
3.Low-budget background checks
The cost of a proper background investigation is something that most firms are reluctant to pay. The best and most specialized proprietary databases are expensive. What’s more, a significant amount of extremely valuable information, such as court records, is not available online and may require an in-person visit. Most firms aren’t willing to pay the expense of conducting a background check properly, which involves visiting courthouses or personally retrieving records.
4.Finding “red flags” takes skill and analysis
Of course, anyone who misrepresents their credentials should be easy to spot by even the most basic of background investigations. But in the case of Martoma, his expulsion, his name change (he changed his name after leaving Harvard), and his reported litigation came up only in a comprehensive background investigation by a skilled investigator digging through mounds of records.
5￼.False sense of security
A large Midwestern investment firm recently contacted us about conducting comprehensive background investigations on their senior executives. Their new chief executive officer had just been fired, after five months on the job, when it was discovered that he had been involved in sexual relationships with at least four people in the office. The $15 background check they had done had given them false confidence that he was the right guy for the job, somehow missing the fact that he was a complete loser. Between salary, fees, moving costs, and everything else, the situation cost them about $100,000. It was only when they lost all that money that they decided to do anything about it, though.