January 2018
Insights/Keeping Predators Out of the Corner Office

Keeping Predators Out of the Corner Office

By Dan Nardello and Sabina Menschel

Not every noxious cloud has a silver lining, but the recent rash of sexual misconduct allegations and scandals, catalyzed by the revelations about Harvey Weinstein, has had several. In addition to exposing and hopefully uprooting a culture of silence, it has encouraged corporations to affirmatively vet candidates for senior roles to ensure that they aren’t hiring predators.

Based on our experience running an international investigations firm – and the calls we are getting from our clients – the corporate response to the “Weinstein” scandal, albeit a long time coming, looks like it’s here to stay. The stakes for failing to detect past activity – ranging from caddish behavior to sexual assault – are higher than ever. Zero tolerance has to start with the hiring process.

Indeed, 2018 should be the year when companies finally decide that each and every potential hire for a senior executive position is subject to a rigorous investigation into possible sexual misconduct. If they don’t, they do so at their own peril.

Keeping sexual predators out of the C-suite has its challenges, but none of them are insurmountable. The big name sexual offenders in entertainment, politics, media and the arts who have been in the headlines in recent months were not called out for isolated incidents, but rather for a pattern of abuse going back years or even decades. And that’s why a comprehensive investigation that collects and synthesizes as many facts as possible – including past conduct and other red flags that warrant further investigation – significantly raises the odds of detecting problematic inappropriate conduct. Some tactics companies should consider employing are:

  • Decide when due diligence into sexual misconduct is warranted, and to whom it applies.
    A recent Wall Street Journal article headlined, “Scandals Reshape CEO Searches,” brought attention to this point, but too narrowly. Companies should apply the same scrutiny they employ in hiring a CEO to board candidates and the wider executive team, all of whom shape the company’s culture and reputation. Heightened scrutiny should also extend to the top leaders of potential mergers and acquisitions, and should be fully incorporated into pre-transaction due diligence.
  • Conduct exhaustive “open source” investigations of public records. Thorough examination of available records, including litigation-related and criminal records as well as news accounts are an obvious starting point. This examination can reveal past litigation filed by individual employees, groups of employees or the EEOC against the candidate, identify instances of misconduct – including sexual misconduct or harassment – and reveal the atmosphere and culture at the companies where the executive was previously employed.  A comprehensive look at social media, including employee blogs and chat rooms also makes sense. These searches should cover both the individual and the companies where they’ve been employed, and should extend as far back as possible.
  • Supplement standard reference checks by interviewing more objective sources.
    The reference interviews conducted by HR and executive search firms frequently involve names provided by the candidate, and are therefore unlikely to uncover any real problems. Trained investigators are able to identify and conduct interviews with a broader set of sources, including former employees, and ask specific questions about sexual misconduct. While there has been much talk about the role NDAs have played in silencing victims, as an investigative matter, the NDA is not necessarily an impediment: a robust investigation can reach knowledgeable individuals not bound by an NDA.
    Board and current members of the executive team can also help by doing informal interviews with their own extensive personal networks. They should be particularly sensitive to suggestions – either intentional or not – about potentially worrisome behavior. The presence of women on boards or in the C-suite is also crucial here: their networks are likely to provide information about a candidate’s reputation that their male counterparts are less likely to hear.
  • Review the candidate disclosure questionnaire.
    It’s common for senior-level candidates, both pre-employment and pre-acquisition, to be asked to fill out a wide-ranging disclosure questionnaire. Any questionnaire must now include questions specifically relating to sexual harassment – both to see if the candidate has anything they want to reveal and to communicate more broadly that the company is serious about rooting out this behavior.

Additionally, it is evident that complacency once an executive is in place is no longer an option. Directors should stay sufficiently tuned in to pick up on any indicators that suggest the need for a full-scale investigation of a top executive or fellow board member. Consideration should also be given to periodic “refreshers” during an executive’s tenure.

Nothing is foolproof, but the right mixture of prevention and sustained vigilance will go a long way towards keeping predators at bay—and out of the corner office.

Contact

Daniel Nardello

Founder & Chief Executive Officer

565 Fifth Avenue
Suite 2200
New York, NY 10017
T: +1 212 537 5300
F: +1 212 537 5333
dnardello@nardelloandco.com

Sabina Menschel

President & Chief Operating Officer

1401 K Street, NW
Suite 725
Washington, DC 20005
T: +1 202 545 3000
F: +1 202 393 3199
smenschel@nardelloandco.com

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