Hiring a new executive has always been a crucial decision for a company, but with the changing demands and growing complexities of modern business, it has become even more critical to get it right. Navigating today’s complex business landscape requires a different kind of leader—a visionary who will future proof their organisations, maintain competitiveness, and effectively minimise risks.
The costs of a poor executive hire can be significant. Bringing the wrong individual into such a high-level position not only can disrupt a company’s growth trajectory but can also lead to substantial setbacks. With so much change and disruption, the pressing question remains—how do you get a senior hire right?
Today’s HR leadership community is increasingly experiencing that the criteria for a successful C-suite hire have evolved. Gaining a clearer understanding of what it takes for C-suite executives to thrive is crucial, as is conducting thorough background screenings. A recent Gartner survey indicates that, in 2025, leadership development will remain the top priority for HR leaders for the third consecutive year. This underscores the growing demand for comprehensive vetting methods that ensure only the most qualified individuals are selected for these influential roles.
HR leaders must make sure that any executive hire can handle the pressure of modern leadership while not impacting their teams. Research highlights that poor leadership is costly. A recent Gallup study revealed that the global cost of disengaged employees has shot up to a staggering $8.8 trillion annually. The ripple effects of poor C-suite leadership are far reaching, extending to workforce culture, operational efficiency, and ultimately, the company’s bottom line.
Why leadership background screening is non-negotiable
Executive background checks can serve as a guiding light through the sea of applicants HR leaders receive. Once they have their top candidates, they can safeguard their business by hiring only the most qualified applicants for this influential position within their organisation.
When hiring for leadership roles, a thorough leadership screening process can act as an insurance policy, supporting HR leadership in making the right choice for their business and protecting the company’s reputation. Why is this necessary?
Unfortunately, we don’t have to look very hard to find instances of CEOs that severely impacted the very businesses they were hired to protect. In Singapore, the former Citiraya CEO is being investigated for 150 offences as part of an embezzlement probe in a case involving more than S$72 million (US$53 million). To avoid this costly example, HR leaders must be diligent in their selection process, only choosing the most dependable and trustworthy leaders thoroughly vetted through a robust background screening checklist.
What should a leadership background check include?
When performing an executive leadership background check, businesses must ensure a strategic approach to safeguard their organisation and employees from potential harm. Below, we outline our checklist for the ultimate executive background screening requirements:
The top five requirements for effective leadership background screening
1. Verify career achievements
A leader’s track record can expose areas of concern, revealing if the applicant is suitable but validation of past accomplishments is critical to ensure they are exaggerated or fabricated.
2. Dig deeper with academic and certification verification
Leadership roles sometimes require specialised training, and if that is a prerequisite, businesses should not overlook verifying academic degrees and professional credentials.
3. Financial and criminal record checks
This step is critical for all employees but vital for leadership hires. With the power to write checks and control finances, HR leaders must look out for red flags to ensure a flawless financial and criminal record.
4. Reputation checks
Interviews do not always uncover the truth about a candidate but references and learning more about an executive’s reputation can speak volumes about their ability to foster a positive environment and uphold ethical standards.
5. Directorship and shareholding searches
Conflicts of interest can arise if an executive has a directorship or significant shareholdings in other companies. It is key to check this aspect of a new hire very carefully when conducting searches to identify any potential conflicts.
HR leaders don’t have to do this all on their own. They can work with partners or leverage technology but ultimately, by including these top strategies within their leadership hiring process, they can avoid common hiring mistakes and ensure their businesses remain protected from the negative impact of an unsuccessful CEO or C-Suite appointment, which is happening far too frequently globally.
The ROI of screening leaders: why it’s worth it
According to a report by McKinsey and Co., roughly 27-46 per cent of “executive transitions are viewed as failures or disappointments” after only two years. In addition, CNBC has reported that ‘failed CEO appointments’ are surging across the globe. In last year’s first quarter alone, global CEO turnover was on the rise, with more than 50 CEOs leaving their posts and 68 new CEOs appointed. Of these, 15 per cent were in the role for two years or less.
CEO turnover can impact businesses negatively, leading investors and clients to view the company as unstable. The damage a short-term CEO can cause is significant, but hiring correctly at the executive level can reap numerous benefits, like protecting your organisation’s reputation, minimising risks with comprehensive vetting, and fostering trust among employees and partners. Considering the cost, ROI and impact of hiring a fair-weather CEO in mind, all leadership should be vetted, but which leaders should be prioritised?
Transparency is key: the future of leadership hiring
Beyond the strategies we have outlined, transparency plays a pivotal role for not only employees but employers during the hiring process. Hiring teams should be transparent with candidates and continue the leadership vetting process even after they are hired. These strategies can round out the hiring process, ensuring the best candidates are hired.
However, background screening is the essential ingredient in ensuring an effective leadership hire. Enterprises must uphold this aspect of hiring to create a compliant, risk-free, and high-performing workplace, especially in Singapore’s highly regulated business environment. By partnering with a trusted agency like RMI, that recognised by the Singapore Ministry of Manpower, you can simplify your hiring processes.
To learn more, download our Best Practice Guide: Singapore MOM Employment Pass for HR Professionals or learn more about our screening processes.
