Background Checks

As I was writing the first part of this two-part blog, I remembered an equally important story. Hiring mistakes also take place within financial institutions in the rarified atmosphere of the boardroom.  A couple of years ago, a member of the Board of Directors of a large Midwestern bank hired a Senior Vice President without telling anybody or checking anything!  The new hire was an old college buddy of the Director’s, and the decision wasn’t questioned by the bank’s HR people for fear of insulting the Director (rank has its privileges).

Within six months, the new VP had secretly transferred something like a quarter of a million dollars to his own private offshore account.  Was there any serious fallout from this hiring disaster?  You bet!  The director was forced to resign, the top HR people were fired, and the bank lost millions in deposits from customers whose confidence in the institution had been totally shattered.  Oh, and, by the way, the VP not only was fired, but also went to jail!

So, is too much time required to do a thorough background check or to check references carefully?  Is it too much trouble?  Too expensive?  The answer is a resounding “nope!”  If you’re in the banking business and if you’ve ever been tempted to do a once-over-lightly background or reference check or even to skip doing a reference check altogether, these stories should convince you of the critical need to make sure that every candidate for employment, from teller to Senior VP, is not only who he claims to be, but also can do what he claims he can.  Doing less is just too risky!