Several months ago, our firm was conducting a search for a CEO, and considered a candidate with a history of senior positions with several respected software companies. He seemed ideally suited in many respects and interviewed well both with our firm and our client’s selection committee. Then came his reference checks. Of seven references, two refused to speak about him. Two more were negative. One referee could not believe this person had offered up her name, given that she had fired him. Needless to say, the client decided to proceed with another candidate.
Two weeks later, a press release was issued announcing that this individual had been hired as CEO of another company in an unrelated product space. A member of the hiring company’s Board was a former co-worker of this candidate, and clearly provided both an introduction and a ringing endorsement. Evidently, the company had done little or no additional due diligence around this new CEO and, according to an executive who has since departed, “left the hiring decision to the Audit Committee Chair and HR Manager”. This young, publicly held company’s stock is now closing in on a 24-month low.