Following the controversial departure of Yahoo! CEO Scott Thompson last week, executive search firm CTPartners has compiled five steps to help companies avoid the same kind of instability that is currently plaguing the internet giant.
“Yahoo!’s board made a series of decisions that led to its current crisis, starting with its relationship with Heidrick & Struggles, its executive search firm that first brought in failed CEO Carol Bartz, who was then replaced with Scott Thompson,” Brian Sullivan, CTPartners CEO, said.
“While boards may think that hiding behind a big brand search firm makes them bulletproof, just the opposite happens.”
Sullivan said large firms have grown to the extent that they are limited in the number of companies from which they can recruit executive talent. “They can’t steal from clients and won’t steal from board relationships. Heidrick’s conflicts restricted them from casting a wide enough net to find the best CEO for Yahoo!.”
Thompson’s downfall – a false claim on his bio that said he has a computer science degree – shows that search firms have become too big to succeed, Sullivan said.
To prevent such an incident Train Luo, managing partner of CTPartners China, recommended employers to first conduct initial third-party referencing of candidates prior to their inclusion on a list, and discuss with the board to spot any areas of concern.
After the initial board review, the search committee should include prior business results and additional referencing of short-listed candidates, as well as education verification, before meeting with the candidate.
Next, search committees should arrange for interviews designed to draw out specific gaps and potential risks related to the candidate’s background, prior track record and leadership style. Additionally, it is important to check a candidate’s education credentials and specific accomplishments, as measured against outside sourcing, to validate the claims.
Finally, Luo encourages the additional sourcing of people with direct knowledge of the candidate and his or her prior performance. Support this with an independent background check by a trusted third party investigative firm.
“Today, social networks such as LinkedIn or Weibo have increased transparency and provide additional sources for background checks,” Luo said.