Firms dig deeper in hiring new bosses
So which Rodney E. Miller was the real one?
Was it the chief operating officer who joined Hollywood’s Memorial Regional Hospital eight months ago, after receiving glowing reviews from his old bosses?
Or was it the Navy dental technician who was court-martialed, tossed in the brig and drummed out of the service for stealing from fellow sailors and trying to fabricate evidence to cover it up?
”He’s an enigma,” said Frank Sacco, the president of the Memorial Healthcare System who personally talked with some of Miller’s former supervisors before hiring him.
Miller resigned last week after Memorial bosses learned about his military career and a scathing audit of a hospital he ran in the Virgin Islands. But his case points to an important question in selecting top executives: How much scrutiny is enough?
Basic background, credit and reference checks are common for hiring employees of all types. But some companies are now hiring specialized investigation firms to conduct more extensive screenings for sensitive jobs. These screenings can go beyond simple public-records searches, to include interviews by trained investigators, searches of newspaper archives and other efforts to draw an in-depth picture of the candidate.
Sacco said that’s the direction he’ll head in for filling future high-level jobs.
”We’re going to go through a different process and do a further level of scrutiny,” he said.
Demand for these services has been growing, thanks in part to the Sarbanes-Oxley Act of 2002, a federal law that increased the personal liability of business executives and corporate board members for financial wrongdoing that occurs under their watch.
Sacco said he might not have rejected Miller simply because he was convicted of theft as young sailor. But the part about trying to cover it up — and his misrepresentations about his military service in his application to Memorial — would have been deal breakers.
He added that Memorial ran Miller’s name through criminal records for the federal courts and all 50 states before hiring him, but it turned out military court records weren’t in there.
If Memorial was fooled by Miller, it’s not clear that most other employers would have fared any better. Indeed, there doesn’t seem to be a clear standard for the appropriate level of scrutiny of prospective executives.
Many employers leave decisions about background checks to executive search firms. Some of these firms have the ability to do background checks, or they may hire a subcontractor for the job.
But these firms may be paid based upon an employer’s decision to hire one of their candidates.
”Their job is not to screen the applicant,” said Mark Cheskin, a senior employment lawyer at Hogan and Hartson in Miami. “Their job is to place the person.”
What’s more, employers are often hazy about who makes various checks. Is the human resources department checking references? Is the outside contractor checking court records? If everyone isn’t communicating, checks can slip through the cracks.
