Background Checks: There Not Just for Custodial Workers Any More was published for Segura & Associates
In past articles, we have discussed how the founders of some of the leading contract cleaning companies in the country are beginning to step down. Often these are the moms- and-pops who started the companies back in the 1970s and 1980s and want to move on.
If family members do not want to take over the business, then many of these companies need to do some outreach, looking for a CEO that will help not only run the business, but take it up to its next plateau. If anyone has ever been in this position, they know it can be a bumpy journey, with lots of potholes along the way.
What I suggest, especially for those companies that can afford it, is to turn to a third-party firm that specializes in what are essentially background checks. However, these CEO background checks invariably are more in-depth when compared to, for instance, the types of background check we may conduct when hiring custodial workers. And they cost a lot more. A thorough CEO background check can cost upwards of $10,000 and more if issues are uncovered along the way.
The background check, whether handled in-house or through a specialized firm, should be conducted before an offer has been made. It’s much easier to tell a prospective CEO, “we’ve decided to keep looking,” than to have made an offer and then be forced to retract it because of some issues that unexpectedly surfaced.
So, what typically comes up in these $10,000 background checks? Some or all of the following are common. These also give you some idea of what to investigate should you do your own CEO background check:
- Past or pending legal matters, especially if they are work or business related.
- Credit history.
- Restraining orders
- Ethical issues. This can be subjective. If someone has legal issues, that is usually cut and dry. Ethical issues, on the other hand, can have different shades of gray.
- Investigations from, for instance, the Securities and Exchange Commission if this is a public company. This will be information those involved in the hiring process need to know. It could also affect other types of legal or professional investigations.
- Traffic violations. These can be taken with a “grain of salt,” however, if they include DUI’s, that could be a concern.
- #MeToo Issues. These typically are not uncovered in a background check. #MeToo issues are often settled confidentially. However, if someone is seriously being considered for a CEO position, it should be brought up.
- Fast-paced lifestyle. For the most part, this is not a company’s concern. CEO’s usually make good money, and they like to spend money. However, if the spending infringes on the company or makes staff uncomfortable, that can be an issue. For instance, while it did not involve a cleaning company, when Illinois state representative Aaron Shock, had his office redesigned to resemble the dining room in the PBS show “Downtown Abbey,” at taxpayer expense, it upset many state constituents and his staff. Not long after that he lost his seat.
There are situations when a CEO is rejected if they cross the line on just one of these issues. The company will continue its search.
However, there are also circumstances when a prospective CEO is hired, even if they have one or many blemishes. In such cases, what the company is typically looking at is “value creation.”
The company recognizes the flaws, but if this prospect can take the company to the next level better than anyone else they have met, that becomes the only thing they are focused on.
Ron Segura is president of Segura Associates. His company works with building managers as well as large and small contractors, helping them build their brands and streamline business operations. This helps reduce costs and allows them to operate more profitably. He can be reached at: email@example.com