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September 25, 2012

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Erin

Absolutely. High-level positions require a detailed level of background checking (including credit).

Earl

Definitely, but was HR involved? Sometimes it is the VP of Sales, the CEO, or the lead booster that makes the "handshake hire" without any HR knowledge or involvement. Not that it is right, but that may explain the lack of a credit check for this level of a position. HR should have stepped in to cancel or postpone the deal, but obviously they did not. Just don't let him run the car wash:

http://www.youtube.com/watch?v=OjSmSXblWRM

Beth

It was pretty common knowledge that he was about to file bankruptcy when they hired him. Sadly (speaking as a Razorback fan and alum) they made the hire anyway. And obviously University of AR's HR department is not in ANY loop (see: Bobby Petrino).

Sandrine

I find this question interesting because it is typically US.

In my country of origin, credit checking is considered as potentially leading to discrimination during the hiring process. One's financial situation is also considered as private. As such, checking on the financial situation of a candidate or an employee is illegal and we don't even really have such credit rating organisations.

Personal bankruptcy is also alien as a concept to us - people can't accumulate debt and walk away from it starting anew. They have to face the consequences of their financial decisions. There are stricter regulations as to theamount of borrowing and debt you can have compared to your income so such extreme situations as the one you describe are virtually impossible.

Throughout my career in various countries in the EMEA region I have never encountered a company that even considered checking the financial situation of the candidate, even if that was not illegal in some countries.

In 18 years in Compensation & Benefits, I have had to intervene only once in the case of a senior employee who had abused corporate credit cards because of his personal financial liabilities. We had a control process and became aware of that pretty early through Internal Audit, and I was able to put in place a plan that recovered the sums, protected the company and supported the executive.

From that standpoint, given the tens of thousands of employees that I have been in cahrgeof, I consider that the risk is pretty low - we lost a lot more through employees stealing company product in our manufacturing plants for example.

So I guess it's my cultural background, along with experience, that makes me say that it is not the company's business to investigate the financial profile of a candidate.

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