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Recruiters, CEOs dish on spotting red flags in job searches

Search consultants will provide information, but due diligence is up to candidates; public records, strong private network are key

Red flags

Nov. 22, 2019
By William Ehart

Taking on a chief executive role is challenging enough. It’s even more challenging—and can be career deflating—when you find problems at the association that were not uncovered during the interview process.

It happens frequently, association insiders say. Not necessarily out of malice, but often because the search committee members themselves are not aware of the skeletons in their own association’s closet. It’s one thing to knowingly take on a turnaround situation; it’s another to stumble into one that even the board isn’t aware of.

But there are smart steps CEO job candidates should take to minimize nasty surprises, CEOs and recruiters tell CEO Update, and common red flags to look out for. (See story on warning signs.)

One of the first caution signals is when an organization is hiring its chief executive without a search firm.

“If boards value the role of the CEO, they’ll appreciate that it’s more than just a direct hire like you would for any other position,” said Shawn Boynes, executive director of the American Association for Anatomy.

Boynes said job candidates should know whether a search committee is looking for a true strategic partner to run the association, or just a high-level administrator. He will not apply for jobs where the search is not led by a recruiter.

“There’s an expertise that search firms bring to the table,” he said. “It’s more than just helping the board navigate through the process. There’s also an education component, because good search firms will help clarify the role of the CEO.”

Mark Golden, CEO of the National Society of Professional Engineers, said candidates need to dig deeper when a search consultant is not involved.

“(Using a recruiter) at least gives you a level of confidence,” he said. “It’s not that the association is trying to hide something from your or mislead you. You just need to press (the search committee) to make sure you’re getting all the information.”

Recruiter’s role

Of course, the recruiter works for the hiring organization and not for the job candidate. That’s something candidates can forget.

Yet search consultants interviewed by CEO Update said it’s in no one’s interest for a CEO to be unprepared for what lies ahead. Further, the recruiters are keen to guard their own reputations. Recruiters typically do a great deal of research on the hiring association during a search.

“I try to be very candid with the candidates,” said David Martin, CEO of Sterling Martin Associates. “Obviously we’re presenting an opportunity to them, but I don’t want to oversell it.

“It’s too important of a job. It’s the top job in the organization and we’re calling people who generally are currently employed somewhere and they are potentially going to leave their current job and you just don’t want them to step into a bad situation without giving them a heads up,” he said. “It’s a reputational risk.”

In fact, Martin has steered clear of some searches when he has felt there were problems at the hiring organization.

“There have been situations where we have decided not to send a proposal (to take on a search) because we didn’t think it was the right fit for us or we felt it wasn’t a situation that we wanted to represent to candidates,” he said.

Leonard Pfeiffer, managing partner at Leonard Pfeiffer & Co., said it was a matter of integrity.

“Almost all of our job descriptions have something in them to that effect that, ‘Here are the things you need to be focused on.’ That’s being an honest broker.”

But even the best intentions for candor and disclosure have limits. Recruiters usually don’t uncover potential problems at an association until after they have contracted to do the search.

“If there’s something (the search committee wants to keep secret), then we’re in a ticklish position because the client will say to us, ‘Look, there’s this issue going on, but we really don’t want that described in the public.’

“And I’ll say, ‘Okay, I understand that. But when we get down to the three final candidates, we need to come clean on that. And they’ll say ‘yes.’ They generally do.

“I know other recruiters have had boards that were not straightforward with them, and I know candidates have had headhunters who were not straightforward with them,” Pfeiffer said.

The right moves

In such an uncertain environment, here are some of the most obvious steps candidates should take.

Tax records: “The first thing I go to is the (IRS Form) 990,” said Martin. “You easily can look back at the last five years. What are the trends like?” Martin looks at revenue versus expenses, sources of revenue, compensation of senior staff, and the balance sheet to see the association’s cash reserves.

Network effect: “I’ve always relied on my network to tell me what the skinny is,” said Peter O’Neil, CEO at ASIS International. “What do people in your peer network know about the CEO and the senior team? How are they viewed by the staff in general?”

The looking glass: Online sites like Glassdoor can be good sources of information. They are essential to check, but results need to be “taken with a grain of salt,” as should any online review, Martin said.

Site inspection: An outdated, clunky website could be a sign of poor leadership, or at least could be an action item to recommend to the search committee during interviews. If you are a finalist, ask to see the members-only section of the site, if applicable.

Social media: “Sometimes people will check out the social media” of association staff, Martin said. “Maybe they look at the CEO, to see if they are on Twitter, or active on Facebook. Does this place seem like it’s up to date, or are there problems out there?”

Rely on yourself

In the end, the responsibility for vetting opportunities falls on the candidates. Be thoughtful about your research.

Allan Freedman, COO at the National Board for Certification in Occupational Therapy, noticed something curious while browsing the web pages of companies run by the board members of a certifying body he was a finalist to lead before he joined NBCOT in 2013: None of them advertised that their employees had the certification issued by the organization.

“One of the things a CEO can’t fix is board members who do not live the mission of the organization,” said Freedman.

“Every candidate has to do their due diligence,” O’Neil said. “It’s the candidates’ job to get the information they need.”

Despite his best efforts, O’Neil has found himself in jobs where surprises awaited.

“The candidate can never know everything,” O’Neil said. “You can look at 990s, you can talk to your network, you can look at Glassdoor and other online sites, and please do all that. But at the end of the day, there’s always a certain amount of risk that a person takes when they move from one job to another.”

See CEO Update’s due diligence checklist for executives considering a new job opportunity.