Background checks matter. Here’s why. There’s no shortage of cases in recent years of individual employees causing massive brand damage to their employers’ business. Currently, the Royal Banking Commission in Australia is once again throwing the spotlight onto poor corporate governance and the expected cavalcade of detrimental outcomes. While senior leaders continue to fall on their sword and share prices begin to slide, all of us are examining how we can use these cases as a lesson for our own corporate brand.
One side-effect of these widely publicised governance failures is that it allows forward-thinking organisations to carve out a market position as an ethical and governance best practice leader. According to the Economist Intelligence Unit, reputation accounts for up to 75% of a company’s value. Research from Real Business also shows that corporate governance, including perceptions of fairness, ethics and transparency, now accounts for 17.2% of a company’s overall reputation, second only to perceptions of their actual products and services.
So, how do we go about creating a positive perception of our corporate governance? Obviously, good corporate governance is the first place to start, as our business’ reputation is developed slowly and steadily over a number of years. Put simply, there are no shortcuts in building your reputation.
What we can do, however, is be more transparent about the processes and practices behind our corporate governance (background checks play a role here). It’s easy to pay lip service to “consistently excellent levels of ethical behaviour”, but any cynic who reads that on your websites and shareholder reports will know that it only takes one rotten apple to prove otherwise.
To mitigate these concerns, it’s worth letting your stakeholders know about the lengths your business is going to in order to attract and retain a highly ethical workforce. So, can background checks save your corporate brand? In a word, yes. A major reputational safeguard is your pre-employment screening processes, as these can outline the steps your business is undertaking to ensure that unethical, and potentially criminal applicants aren’t slipping through the cracks.
Background checks stand behind good process. If a particular individual is exposed for negligent, unethical or criminal behaviour while employed by your business, one of the first steps your business can take is to highlight your pre-employment screening processes. If those screening processes have been carried out in full, and the employee has been given the right level of ethical and conduct training, you can respond to media reports on the front foot by illustrating that best practice corporate governance procedures were followed. While this doesn’t give you an automatic free pass, it will greatly reduce the potential brand damage your company could suffer.
By partnering with a world-leading pre-employment screening provider, you can be sure that the recruitment processes you publicise are of the highest quality in your marketplace. This provides shareholders with a greater sense of security in your governance practices, while also being an essential component of your brand position for customers. On top of that, a robust and stringent recruitment process indicates to potential applicants that you’re serious about hiring the best, making you an employer of choice and influence.