Cover Story
Vetting at the Top RECENT ETHICAL DEBACLES UNDERSCORE THE NEED FOR CLOSER SCRUTINY AND SCREENING WHEN IT COMES TO
C-SUITE POSITIONS.
BY WILL BUNCH
T
racy McCarthy, currently the senior vice president for human resources at Chicago-based SilkRoad technology inc.—with a 20-year background in the HR field (including as a CHRO at a mail-order retailer and in HR leadership posts at other retailers)—says one of the worst pieces of advice she’s ever received came during an earlier job when her 200-employee company was searching for a new CEO. A leading and well-known candidate had emerged for the post and a board member told McCarthy there was no need to run a very extensive background check. “They said that we shouldn’t do that, that a background check would be insulting, that this is a known person,” says McCarthy, whose current employer, SilkRoad, offers HR services to high-tech firms. McCarthy says she went ballistic at the suggestion. “I said I think we owe it to ourselves, and our investors, to do an extra, extra deep background search—to look
1 0 Human Res o urce E x e cu ti v e ®
at everything that might be out there,” she says. McCarthy—and other human resource executives and experts—say double- and even triple-checking a C-suite job candidate’s resume, references and educational background isn’t just a way to spare the company from future embarrassment; it also offers career protection to the candidate who might be able to correct a resume error before it becomes an indelible stain on his record. And some experts argue that problems with the hiring of the very top executives run deeper than the resume, that candidates should be psychologically assessed and past co-workers should be mined better for information. Earlier this year, the business world learned, yet again, just what can go terribly wrong when candidates for the highest-level jobs are not properly vetted. In May, Scott Thompson had been CEO of the large but troubled Internet-content giant Yahoo! for just four months when an
activist investor challenged his educational background as listed in one of the firm’s filings with the U.S. Securities and Exchange Commission. The filing, and other public information about Thompson’s biography, said the new CEO held degrees in both accounting and computer science from tiny Stonehill College, but a simple check with the school revealed he only held the accounting degree. The disclosure not only cost Thompson his job (he has since taken over the CEO post at Conshohocken, Pa.-based ShopRunner), but gave a huge black eye to Sunnyvale, Calif.based Yahoo!—just as the Internet pioneer was struggling to rebuild its business model. It also led to some intense finger-pointing between the company; its wellknown search firm, Heidrick & Struggles; and another contractor. Human resource experts say the Thompson fiasco may have been headline-making, but it wasn’t isolated. Rather, it’s a striking example of deep flaws in the way CEOs and candidates for other high-level C-suite jobs are hired in the 21st century. Too often, these experts argue, job-seekers for top-level, highly visible posts are actually vetted with less stringency than lower-level hires, even in an age when the Internet can both magnify errors and increase the opportunities for puffery and fraud. “The more senior you get, the more it’s about relationships and less about filling out an application,” says Rusty Rueff, a former HR leader at PepsiCo and Electronic Arts who is currently a career and workplace expert with the Sausalito, Calif.-based jobs and career site Glassdoor. Rueff and other experts say C-suitelevel candidates are typically recommended by board members and are already well-known within an industry, which has the perverse effect of leading to lax background