NEW YORK - April 19, 2023 - For most clients seeking investigative due diligence, no news is good news. Best-case scenario, we report back that a potential partner has a clean personal and professional bill of health, including strong feedback from people who worked with the partner about performance and reputation. But if we find the opposite — issues that could jeopardize a client’s investment or reputation — lurking beneath the surface of an otherwise polished resume, receiving that bad news can be critical.
Even though the people we most often are asked to vet are C-suite or board-level executives, unfavorable findings are more common than most imagine. Almost nobody’s life or track record is perfect, even though someone may have avoided criminal issues, bankruptcy, or contentious legal disputes. A thorough review of a person’s life and career based on rigorous open-source research as well as interviews with primary sources (not references) should reveal a narrative against which the reader may compare the story that the subject tells about themselves, from where they started to where they are today, including the inevitable ups and downs along the way.
To varying degrees, these facts frequently tell a story that differs from what the person projects to the world. Here are four methods investigators use to bring these discrepancies into relief:
Scrutinize and Cross-Reference Biographical Details
As a first step, an investigator might seek to corroborate an executive’s self-reported resume and credentials. These are most often found on LinkedIn, the social media and self-branding platform of choice among white collar professionals, from chief executives to interns. Details worth paying closer attention could include positions with companies that appear unknown, low-profile, or have little-to-no descriptive information; vague start and end dates; gaps between or overlapping roles; or transitions that seem disjointed.
The information reported on an individual’s LinkedIn, resume, or current company bio should be compared to historical biographies and other documentation of their professional trajectory, which might be found in securities or regulatory records or filings, corporate filings, web archives, obscure media reports or trade publications, or court documents, to name a few. Regulatory records detailing employment history, even if self-reported, can be especially helpful since people are less likely to lie to regulators. Likewise, public records concerning financial matters such as mortgage transactions or pay downs, changes to lines of credit, judgments, or liens could signal financial setbacks or successes and that can be cross-referenced with a person’s resume. Corporate filings can reveal that an individual departed a position much earlier than they claimed or launched an undisclosed side business. These relatively simple efforts by an investigator to corroborate the representations in their subject’s self-reported bios can lead to important findings and shed light on a subject’s honesty.
Triangulate Information Across Multiple Sources
Public records are not necessarily permanent. Let’s say a county clerk has destroyed documents related to a 20-year-old domestic violence case involving a subject or that an executive has had a drunk driving charge expunged. One might reasonably assume those are dead ends. Not necessarily: investigators can leverage multiple sources for information. Examples include archived versions of websites and online forums or message boards, which can provide information that has long since disappeared from the current web, or police incident reports that may detail a law enforcement matter for which court records have been sealed or expunged. Investigators also make heavy use of commercial and nonpublic databases, including those that purport to cover the same information, employing a concept called database redundancy.
The term “redundancy” normally carries a negative connotation. But in this context, redundancy is a good thing. In this context, it refers to the use of multiple databases that have overlapping, or “redundant” coverage. This is important because no database is comprehensive. Where one may be missing records from certain repositories or specific time periods, another may contain items of interest. A good investigator will run numerous searches across a variety of public and nonpublic databases to find information that might be relevant to their client, sometimes including a single snapshot of a public record that may have since been removed from public access by a local court. So while a trail may run cold at the county courthouse or in a major media database, archived local newspaper clippings or abstracts in a particular investigative database may turn up unexpected results.
Interview Sources to Fill Gaps
When investigators have exhausted all public information sources, a well-placed call to a former colleague or adversary can unlock a wealth of new and pertinent information. Most nonpublic companies are intentionally low-profile when it comes to their financial performance or operations. Furthermore, many executives who are forced out of a position for performance or other reasons typically take care to negotiate an amicable separation that allows the executive to quietly take another job, so as to avoid a resume gap or signaling to the market any failure or setback.
While there may be little-to-no paper trail to corroborate an executive’s track record or reasons for leaving a job, a handful of interviews with the executive’s former employees, peers or superiors from that period can provide these and other answers – including insight into performance, reputation, management style, and even lifestyle personal motivations and values. Interviews with people who have clashed with a subject, such as competitors or former litigation opponents, can also provide valuable information that allies may be unaware of or unwilling to share.
Examine the Periphery
Investigators broaden or narrow the scope of their research as necessary based on the client’s priorities and needs. While digging into the background of a particular person, our peripheral vision sometimes picks up valuable leads beyond the immediate scope of the investigation. Even the most polished corporate executive might have a close family member with an unusual asset profile or undisclosed but related business interests – for example, a job that they owe to the executive or an improper supplier relationship with the executive’s company. Investigators will not hesitate to follow interesting leads and to pitch ideas for potentially fruitful areas for additional investigation.
Given the prevalence of corporate misrepresentation, seasoned researchers who can leverage these and other investigative methods can mean the difference between a reputationally damaging headline and a close call.
