Here are some tools to research personnel backgrounds
Performing background checks on employees, people and companies has become easily accessible through the Internet. It is also starting to become a requirement.
Many lessons can be learned from stories of organizations hiring a person with a shady past. Locally, an executive at the chapter of a national nonprofit organization learned that one of its executives was on parole for a felony criminal conviction when she was hired. Another local chapter of a national nonprofit hired a director of planned giving who had a criminal past and defrauded donors out of money meant for the Hawaii charity.
Imagine the public relations fall-out if your organization hired an executive later revealed to have a colorful history with a state attorney general for having operated fraudulent get-rich-quick seminars a decade ago.
Or, consider the litigation costs of even one securities class-action lawsuit in which your company is a defendant because of an ill-conceived merger two years prior with a company whose chief financial officer was previously sanctioned by securities regulators for accounting irregularities. These scenarios can be avoided, but only by conducting upfront research.
Of course, good research comes at a price.
At a minimum, to check the backgrounds of U.S. people and companies, you will need access to:
» Accurint (www.accurint.com) or ChoicePoint Online (www.choicepoint.com), for subject identification
» Dun & Bradstreet (www.dnb.com), for private company reports and executive biographies
» LexisNexis (www.lexisnexis.com), for news and public records
» Factiva (www.factiva.com), for news
» Pacer (www.pacer.psc.uscourts.gov), for federal civil and criminal cases for most states
» CourtLink (www.lexisnexis.com/courtlink), for county-level civil and criminal cases for some states
If you have Westlaw, Hoover's Online, and Dialog, you can cover even more bases. There are also many specialized resources you will need for certain jurisdictions or purposes.
Some great resources, including many public records, are available for free on the Internet. The easiest and most popular is Google. Another is BRB Publications, Inc. (www.brbpub.com/pubrecsites.asp).
Even with all of these resources, you may not be able to obtain all information.
First of all, many jurisdictions still have no online coverage of civil and/or criminal records. For these situations, you can hire someone to go to the courthouse to manually check for records involving your subject. Several document retrieval companies perform such services.
In addition, any investigation or proceeding under way will not be disclosed. There is no guarantee to detect all relevant information.
Second, criminal records in general are not online. We, as common citizens, do not have access to the National Crime Information Center (NCIC) database maintained by the FBI. This much-coveted database is used primarily by law enforcement personnel. Do not believe any vendor who claims access to this database. If they have it, they have it illegally.
Gone are the days when hiring or doing business with a person were sealed with a handshake and blind trust.
The potential repercussions if something goes wrong are too costly, both in terms of dollars and reputation. It comes down to really knowing the people and companies you will be doing business with.
Patrick Oki is an audit and advisory partner in the Honolulu office of Grant Thornton. He can be reached at Patrick.Oki@gt.com