Infortal specializes in Finding Bad Actors™ and rogue players to reduce your business risks. This is particularly important when hiring new executives and during Mergers and Acquisitions (M&A) activities. These are the times when your company may be at risk from bad actors. Executive due diligence will reveal far more information than a simple background check which is typically very limited in scope.
In this era of increasing scrutiny of executives and boards of directors, thorough and extensive analysis of executive candidates is a must. Screening executive hires has become an essential tool to help a company’s corporate governance and protect it’s Board of Directors from unethical and illegal activities, which may also cause reputational harm to the company.
Infortal specializes in Best Practices Executive Due Diligence; we look at the profile of candidates from many angles, learning about a candidate’s reputation and behavioral history, seeking out both embellishment of education and work accomplishments, in addition to their criminal history and civil litigation issues, including SEC violations, breach of contract issues as well as bribery and corruption issues.
Additionally, falsification of information and hidden alias names or other identities, which in turn may hide criminal activities, sanctioned business relationships, and regulatory violations. If the company you choose to invest in, or to acquire, includes executives with serious issues in their history, these may cause your company serious reputation damage, or regulatory fines and penalties, and potentially shareholder lawsuits, and may ultimately negate the benefits envisioned when they were acquired. These situations are easily avoided when effective executive due diligence is conducted.
You may already be familiar with the concept of executive due diligence. While most companies do conduct legal and financial due diligence, this will not uncover the human side of these issues which can only be found through executive due diligence. Finding Bad Actors™ is not typically part of legal or financial due diligence. Often this is done through routine background checks which will reveal less than 1% of serious issues as compared to 20% of serious issues found when due diligence investigations are conducted.
Infortal specifically handles executive and corporate due diligence in regards to hiring corporate executives, merging or acquiring another business (M&A), and vetting third party vendors and business partners (TPRM Third Party Risk Management) for FCPA regulatory compliance purposes.
Numerous companies in recent times have experienced adverse publicity related to executives involved in personal scandals, corruption, and even easy-to-avoid issues such as not having their claimed credentials including educational degrees. Your business reputation and bottom-line profits may be at serious risk if your executives are not who they say they are, if they over-promise your capabilities to major accounts because they want to achieve quotas, or because they have unethical business practices, or are planted by a competitor.
Additionally, Executives are under increasing pressure to perform successfully in Year 1. Hiring the right person with the skill sets you need is only part of the picture; they need a support structure that enables optimal performance; this is key information for you to know about. Infortal searches for problems, issues, trends and themes in their history, not just the basic facts. People that want to hide their issues will often do so brazenly.
We sometimes hear from clients that they are not worried because the executive has signed a legal document. Unfortunately, this does not help if the executive’s activity is exposed by a national media publication. Also, how will you know whether there is important undisclosed information? Deliberately hidden issues and unresolved problems that the executive does not want to reveal to you often remain undetected through traditional executive recruiting efforts, where often only a few references are checked along with a minimalist background check even for an executive hire.
An executive’s signature on a legal document only protects you after the fact and does not ensure that they are disclosing the entire truth to you.
Infortal designs and implements due diligence of executives and businesses which are strategically-aligned to your company goals. These should also be aligned to your Third Party Risk Management (TPRM) programs and anti-bribery programs for on-boarding new suppliers globally and for new mergers and acquisitions.
These due diligence reviews help your corporation to hire and retain the best executives and business partners globally. We help your organization develop Best In Class compliance programs, reducing legal exposure for the corporation and helping to protect the board from unnecessary litigation issues, personal liability, and activist shareholder lawsuits.
We help you to minimize corporate liability exposure and stay out of headline news.
In many instances, executive due diligence is a legal requirement. In almost every instance, a board needs more than the standard background check to confidently make an informed hiring decision for C-suite level positions. A typical, low-level background check is very limited and simply will not return a full, comprehensive history of a candidate, their past, and the risk they could present.
“What do we find? 20 percent of executives have serious issues that you cannot find in a background check and 35 percent of global third party business partners have corruption related issues.” – Candice Tal CEO and Founder, Infortal Worldwide
Infortal’s data collected over 25 years show that 20% of executives have serious issues of concern in their history. That is 1 in every 5!
This may include a broad spectrum of issues for example serious conflicts of interest, SEC violations, forged degrees, criminal convictions such as felony fraud, IP Theft, working with sanctioned governments, money laundering, racketeering, trafficking, manslaughter, and even murder.
We may also find business ownership in undisclosed companies or conflict situations, important civil lawsuits, including breach of contract, sexual harassment, SEC violations, in addition to interstate bankruptcies, corporate espionage, con artist behaviors, and a host of other issues which are likely to be of concern.
1. Protects the interests of the corporation, employees, and stakeholders
2. Adds fiduciary protections for the Board of Directors, particularly for publicly traded companies.
3. Minimizes liability exposures for the company from future inappropriate activities & crime
4. Benefits corporate governance
5. Provides FCPA & Sarbanes Oxley (SOX) compliance
Another recent example of a company that conducted insufficient due diligence on an executive hire is Moderna, which recently paid $700,000 after the new CFO was employed for only one day.
A Rule Of Thumb: if you have not personally known an executive for at least 10 years then you do not know the person well, and if something is being hidden from you, you may never know of it.
Most of the laws that govern companies and how they conduct business both in the US and internationally require businesses to have conducted their own due diligence themselves prior to entering into relationships with third-party suppliers, vendors, agents, and distributors.
Many regulations also require “adequate levels of due diligence” to be performed before bringing new executives onboard. Conducting a routine background check and reference interviews is no longer considered a sufficient level of due diligence according to federal regulators.
A detailed report is provided with Executive Summary, conclusions, recommendations and complete attachments. Updates are provided: Two levels of Executive Due Diligence are available, depending on the number of components searched.
Multiple Key Executive checks may be priced at a discounted rate depending on the number of executives included, and whether international components are involved.
Our executive due diligence investigations include detailed evaluations of multiple public sources of information. While we will gather all of this information into a report for you to review, we do focus on a number of key areas:
Our executive due diligence investigations include detailed evaluations of multiple public sources of information. While we will gather all of this information into a report for you to review, we do focus on a number of key areas:
For several decades, Infortal has worked with ultra-high net worth individuals (including billionaires) and Family Funds Offices to protect their families, assets and properties.
Reputation damage is often a serious end result that in many cases could have been prevented by effective due diligence to manage or mitigate increased risk factors.
