Due diligence on executive hires

I met with Nancy Peretsman from Allen & Co. about a year ago. Some associates thought that it would be good for us to know each other, and I was very interested in meeting her given the business I am in. She's very impressive, personable, and I have a ton of respect for the way in which Allen & Co. has built their business, and continues to conduct business. We spent about a half an hour together talking about the technology business, banking, private equity, and executive search. I asked her about her experiences working with search firms and her only comment was the following: "I am amazed by some of the hires that are made out there. Are people just not checking out the executives they are hiring? I can't believe some of the hires that are made - people that just shouldn't be in the role."

Of course, as I always say, any executive who has risen the corporate ladder is going to have people who say good things about them, and people who say bad things about them. It's typical of corporate politics and I have seen it happen at Time Warner. However, what Nancy is saying is very true in a lot of ways. I think some investors/Boards/Management teams/Search Firms don't do the necessary due diligence when making a hire, and shame on them. It's your obligation to do the right due diligence before making a hire, and you need to be accountable for it.

Make sure that you not only talk to their references, but ask the candidate to talk to other people from their past that they don't list as a reference. Between the investors, management and the search firm involved, you should be able to find a lot of common executives that you can speak with in regards to that candidate. Everyone lists references that will say good things about them, so be sure to do your own due diligence - it's incredibly important and you will be a lot more successful at making the right hires.