When Hiring a CEO Goes Wrong

by | Jan 23, 2017 | Corporate Investigations

When Hiring a CEO Goes Wrong

Hiring a CEO is a long and arduous process. Companies can’t afford to waste time and money on the wrong candidates. It’s bad enough when someone gets a CEO position and isn’t good at their job. It’s even worse when they have to resign in embarrassment.

More frequently than you might suspect, companies hire someone for a top executive position without doing a thorough background check. Instances like these not only waste company resources, but they hurt the company’s image and make securing top talent in the future harder. Here are a few times a more thorough vetting process could’ve protected a company’s resources and reputation.

 

Monica Crowley

Monica Crowley was a research assistant to Richard Nixon in the 1990s. She received a PhD from Columbia University in 2000 and was a political commentator for The Wall Street Journal, Fox News and MSNBC, among others. She has published multiple books as well.

When Donald Trump won the presidency he initially nominated Crowley to be the Senior Director of Strategic Communications for the National Security Council. Quickly after her nomination reports began circulating that Crowley had plagiarized large portions of the books she had written.

Initially the Tump administration said they stood by Crowley and that the attacks on her were politically motivated. However more and more evidence of Crowley’s plagiarism began to mount.

Crowley was found to have not only plagiarize portions of her books, but also her PhD dissertation for Columbia University. Harper Collins, Crowley’s book publisher, withdrew her books from being sold and Columbia said they were reviewing their records.

Crowley’s plagiarism went from minor footnote to national spectacle overnight. After standing by Crowley during the initial accusations, the Tump administration ended up withdrawing her nomination. This whole scandal could’ve been avoided with basic cross referencing and data mining.

 

Gustavo Martinez

Gustavo Martinez was the CEO of J. Watler Thompson, a major company in the advertising industry. JWT has over 10,00 employees working in more than 200 offices across 90 countries.

Martinez is originally from Argentina and became Global President of JWT in 2014. In January of 2015 Martinez was named CEO. Within a year of his promotion, Martinez was named in a lawsuit alleging discrimination by a female employee.

The lawsuit claimed Martinez had made numerous racist remarks during a company meeting. Martinez is said to have told employees to double check their bags and belongings since the hotel where they were staying  had so many black people. Martinez is also accused of making comments about raping female employees.

One of the more shocking aspects of this case is the brazenness of Martinez. All of these comments were made in front of large groups of people. His comments about black people potentially stealing employees belongings are even on video. In fact, Martinez had been known to discuss his distaste for Jewish people.

Martinez’s willingness to speak this way publicly surely could have been discovered before he was made CEO. Instead J. Walter Thompson is now engaged in a high profile lawsuit and lost their CEO. Extensive background investigations can protect your company from embarrassing headlines and wasting money fighting lawsuits that should never have happened in the first place.

 

Scott Thompson

Scott Thompson is an American businessman with an impressive resume. Thompson had a long career in technology before becoming the CEO of Yahoo in 2012. He had been the Executive Vice President of Technology Solutions for Inovant, Chief Information Officer for Barclays Global Investors, Chief Technology Officer and then President of Paypal.

Thompson’s work history made him appear to be the perfect candidate for almost any job in technology. How could he have gotten so many high level technology jobs without any skeletons being rousted from his closet?

Despite his exceptional work history it turns out that Thompson had been falsifying his resume. After six months as the CEO of Yahoo, Thompson was forced to resign after it was discovered he lied about his college education. Thompson claimed to have received bachelor’s degrees in computer science and accounting from Stonehill College.

When Stonehill College was contacted about potential discrepancies on Thompson’s resume, they would only confirm he had received a degree in accounting. Thompson blamed a headhunting firm for the false information, but the firm strongly denied the allegation. Yahoo has been struggling to find stead leadership ever since.

 

All of these cases share a common theme; they were all 100% avoidable. There is no excuse for hiring a CEO who has to resign in disgrace with a year of employment or even before they begin the job. Private investigation firms like Lauth Investigations International can identity these issues before your company makes a move.

Companies aren’t just wasting time and money on unqualified candidates, but they’re risking their reputations. Appearing dysfunctional is bad for investors and makes it more difficult to secure qualified candidates in the future. Lauth Investigations International has the investigatory skills to protect your business from self-inflicted wounds.

 

David Schroeder, Blog Writer, Lauth Investigations International

7 Steps to Take When You’re Suspicious of Employee Drug Abuse

7 Steps to Take When You’re Suspicious of Employee Drug Abuse

by | Sep 9, 2015 | Corporate Investigations, Tips & Facts

drug abuseEmployee drug abuse in the workplace can lead to a wide variety of problems, many of which can affect your company’s bottom line. Whether the drug happens to be alcohol, prescription medication or illegal substances, and regardless of whether the use is occurring during working hours or on the employee’s personal time, the results can include:

  • Decreased performance
  • Increase in tardiness and absenteeism
  • Lower productivity
  • Higher employee turnover
  • Increase in expenses associated with medical care and workers’ comp
  • Increased risk of workplace violence

Not only do these things affect the employee in question and the company as a whole, but they can also have a negative impact on other employees, leading to a host of other problems. To avoid this, management and those in HR must be proactive and vigilant so potential issues can be addressed swiftly and effectively. If you suspect that one or more of your employees may be abusing drugs, here are 7 steps to get the situation under control.

Develop a Clear-Cut Policy – In order to legally take action against a worker who is abusing drugs or alcohol, you must first have a policy in place that addresses such situations. For optimum results, your employee drug abuse policy should include the ability to test in the event of reasonable suspicion. The policy should be in writing and all employees should sign off acknowledging their understanding and agreement. If you don’t have such a policy in place, consult with your legal counsel to ensure proper implementation.

Watch for Warning Signs – An employee who is abusing drugs or alcohol may not always be blatantly intoxicated. Therefore, it’s important to know what warning signs and red flags may indicate possible employee drug abuse so they can be identified and tracked. Some common things to watch for include sudden change in behavior, excessive tardiness or sick days, withdrawal from others (i.e. the sudden desire to work alone, away from co-workers and/or supervision).

Train Those in Charge – HR representatives may not be able to identify the signs of potential drug abuse right away because they aren’t in direct contact with workers in every department. That’s why front-line managers should be properly trained and advised of their role in spotting red flags as well as the appropriate steps for documenting and reporting such suspicions.

Keep a Detailed Record – Employment laws protect workers from being unjustly disciplined or terminated, so be sure to do your due diligence. Any and all cases of suspected employee drug abuse should be clearly documented. This will help you establish your case and protect you from any potential backlash.

Meet with a Witness – Once a case of suspected employee drug abuse has been properly observed and documented, the next step is meeting with the worker in question to discuss the suspicions and a proposed plan of action. A witness should always be present to keep detailed notes and provide a third-party account of what occurs. Go over your company policy and discuss the appropriate next steps.

Test (When Allowed) – It’s important to note that drug testing is a legal issue and therefore should always involve the advice and/or guidance of an appropriate legal representative. Provided that you have the authority to legally do so, follow through with drug testing, either at designated intervals or when a suspicion arises.

Take Action – Depending on the regulations in your area, as well as what’s set forth in your company policy, the appropriate action should be taken when suspected employee drug abuse occurs. This may be a warning, a suspension or termination of employment. Remember to always stay within your legal rights based on what the employment laws in your state allow. When in question, always consult with a legal professional.

Of course, some companies find it too tedious to follow up on suspected employee drug abuse. If you find yourself in this boat, enlisting the help of an experienced private investigator can help alleviate some of the burden and help you focus on what’s most important: protecting your other employees and your reputation. Give us a call and let’s discuss how we can help!