Here’s why employee background screenings matter

Photo credit: Giphy.com.

One of the most enjoyable films I remember seeing is Steven Spielberg’s blockbuster “Catch Me If You Can” with Leonardo Di Caprio playing a conman. It’s the true story of Frank Abagnale who, in the 1960s, became the youngest person ever to make it to the FBI’s 10 Most Wanted List.

Abagnale, a master forger, fooled the world that he was a doctor, a lawyer, and even a pilot of a major airline.

That was an enjoyable romp because it was a Hollywood entertainer. However, when such charlatans wreck corporate reputations, it is no laughing matter.

Real-Life examples

This year, five prominent hearing industry executives were indicted for conspiring to steal more than US$20 million from Starkey Hearing Technologies and its principal owner William (Bill) F. Austin in the US. These were people in positions of trust including the former president, former CFO, and former senior VP of human resources.

Our company, AuthBridge, has also recently conducted a background verification on a senior C-suite executive from a large technology consulting firm to verify his past work experience.

Screening his past employment revealed a discrepancy in the stated reason for his last exit. During his tenure as the senior marketing manager, he was laid off by the company due to his involvement in the misappropriation of the marketing budget.

A similar case happened when a US-based mid-sized IT company approached us to verify its India CEO who had joined the firm six months earlier. The person claimed to have graduated from IIM-Ahmedabad and IIT (BHU).

However, his colleagues felt the lack in his managerial abilities and command over the English language, which raised a red flag. Thorough screening revealed that the candidate had faked his education qualifications.

The bigger picture of fraud

Go back a little further and you will find many similar examples of C-suite executives falsifying or concealing information. In India, there are countless instances of similar misdemeanours on the part of top executives. However, companies often conceal this information for fear of reputational damage.

What cannot be hidden, however, is that fraud levels in India are among the highest in the world. Indeed, India ranks third in the world in global fraud—just behind Colombia and Sub-Saharan Africa—according to the recent Global Fraud Report (Vulnerabilities on the rise).

The report says: “Despite vulnerabilities…only 28 percent of companies in India invest in staff background screening and 55 percent in vendor due diligence.”

Only 28 percent of companies in India invest in staff background screening and 55 percent in vendor due diligence.

In my opinion, no longer can corporate India ignore the elephant in the room. The role of background checks in eliminating corporate fraud and providing a deterrent to criminal tendencies that can wreck painstakingly developed corporate reputations cannot be overstated.

What can be done?