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DEEP BACKGROUND

THE BLOG ABOUT BACKGROUND CHECKING
#MeToo

#MeToo is also an earthquake for the due-diligence business

TOPICS:  Background Checking

Corporate boards of directors are requiring that candidates for C-suite jobs be vetted more heavily than in the past to make sure they haven’t committed sexual harassment.

That was the conclusion of a recent article in the Wall Street Journal, which also reported that some boards of directors are forcing newly hired CEOs to sign employment contracts “that punish prior sexual harassment or other misbehavior that surfaces later.”

The new caution comes in response to the wave of sexual-harassment scandals and firings that have swept through the entertainment, media, and related industries in recent months. Now awareness of the risk of sexual impropriety by top executives is spreading fast into virtually every sector.

“Reputation management”

“As board members, we have to put our own elbow grease and time into thoroughly checking out the character of any CEO we hire,” the Journal quoted Brent Saunders, CEO of pharma company Allergan PLC (who is also a Cisco Systems director) as saying. “Reputation management is becoming an increasingly important component of the valuation of a business.”

Jeffrey Cohn, managing director for global CEO succession planning with the DHR International recruiting firm, was quoted by the Journal as saying that the scandal about the sexual activities of moviemaker Harvey Weinstein was a turning point in U.S. corporate life.

“Everything has blown up”

Many companies that have concluded they are at risk of being accused of having an oppressive atmosphere are deliberately choosing leaders who “can transform a loose corporate culture into a safe workplace…Post Harvey, everything has blown up—and that includes CEO searches.”

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