Board Member Vetting: A Search for Disqualifying Attributes?

While the concept of personnel vetting is usually giving someone a more intense “going over” and is becoming the norm (more than 350,000 public sector personnel have security clearances), vetting should be the standard when it comes to board recruiting.

Vetting prospective board members that originate from both from the outside and inside, has become a growth industry. Head-hunting (checking for competency) and background checking firms (assessing character) are the go-to places for deep background checks on board candidates.

There are at least two reasons for vetting board candidates, both involve Activist investors.

  1. When a company faces a proxy fight from investors seeking to add their own outside candidates to the board, the company should certainly give them extra close review. This could be driven by a search for disqualifiers and makes good governance sense.
  2. Boards should also vet their own internal prospects using the same standards. Those hostile activists will be looking into the directors’ professional and personal life for any closeted skeletons and so a smart board should be made aware of any character flaws, weaknesses that might damage the reputational before any decision is made. You need to assume that the other side will be sifting through the background of your own board nominees for dirt too.

Difficulties can arise when boards “appear” to be more forgiving when it comes to their own nominees. If/when adverse information comes to light, and you say “it-was-a-minor-sexual-harassment-charge” or the “bribery-charges-were-never-proven” it will look like your board winks at tough standards for your own board nominees. Expect activists to cause PR and reputational damage should you try imposing stricter judgements on the choices.

That is why an independent, impartial, external suitability screening standard, agreed by everyone and defined by the Attorney General’s in relation to trusted insiders (and by extension security clearance holders) is a favoured way to overcome any appearance of bias.

Dirty laundry on any board prospect can prove a problem even if you and the activist agree on a nominee: so never waive the nominee vetting process.

Cleard.life’s suitability vetting qualification combines more than 10 background checks into one assessment and can be done quickly – in as little as three days. We would recommend our Ultimate 5.5 hour vetting service, which includes approximately four hours of interviewing and will be used only to ascertain and be measured against the Attorney General’s standards for Honesty, Trustworthiness, Tolerance, Maturity, Loyalty and Resilience. Using the highest security clearance standard in the land will not only turn over all the relevant stones in a person’s life , you will be able to come to an impartial conclusion about your next Candidate.

Conclusion: Get in touch with us today by calling (02) 61-71-41-71 – or start your order here.

Hat-tip: http://www.businessworld.in/article/Here-s-How-To-Appoint-Your-New-Board-Member/25-07-2017-122814/
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