Board vetting in the digital age: the definition and mechanics of 'background checking' have changed over the years, but the guiding principles of full and forthcoming disclosure remain the same.

AuthorLagomarsino, Peter
PositionDIRECTOR RECRUITMENT

When we first wrote an article for DIRECTORS & BOARDS back in 1996, we shared some tips for vetting board candidates: what to look out for, what types of resources to check, and other guidance. If you strip away the charmingly archaic references (such as "desktop computer equipped with a modem"), we made some fundamental research points that hold true today: What is the candidate's hometown reputation? Is his or her background as described? Has the candidate ever been sued? As we always say, trust but verify.

A number of dynamics have changed, and it isn't all about the Internet. For example, more is expected of board directors in terms of disclosing past litigation and other adverse information. The SEC ruled a few years ago that companies would have to disclose legal proceedings involving directors going back 10 years, instead of five years, and the list of legal proceedings that had to be disclosed was expanded. We wrote an article on this topic for DIRECTORS & BOARDS in 2010.

At the same time, the data trail that candidates leave behind is longer than ever, often crossing borders and languages and steering into social media (what you might call the new "hometown paper"). The surplus of digital information on executives makes it harder, not easier, for nominating committees and other decision makers to find the information that matters on a candidate. Just consider the volume of data: at the Mintz Group, we use more than 100 unique databases in a background check, and more when researching across borders and languages.

With all of this in mind, here are some all-new tips for background checking your board candidates in the digital age:

* Start with Consent: Getting the candidate's written consent before performing a background check is both practical and symbolic, not to mention legally required in some places, such as the EU. While it may have been an affront in generations past to suggest that a candidate's resume would have to bear scrutiny, it is now common practice. Even when not legally required, signed consent grants you access to important information, such as education verifications, and signifies that the candidate embraces the process. We recommend getting signed consent from all board candidates.

* Early Vetting of the Basics: Checking credentials at the outset is easier in the digital age. Most U.S. universities, for example, outsource their student records to the National Student Clearinghouse, which runs a database you can...

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