Job Hunting

Report: Employers Looking for Dirt

Spooked by accounting scandals, prospective employers are prying into the personal lives of CFO candidates.
Lisa YoonAugust 20, 2002

In this banner year for corporate fraud, CFOs on the move are also on the defensive, with prospective employers digging deeper and deeper into a candidate’s background. “People are going to look carefully for ethical lapses,” says Robert Mittelstaedt, vice dean and director of the Institute of Executive Education at University of Pennsylvania’s Wharton School.

Companies were reminded of the importance of a solid background check last year, when a report revealed that ‘Chainsaw’ Al Dunlap, the former Sunbeam Corp. CEO accused of cooking up massive accounting-fraud scheme at the appliance maker, was ousted from two previous companies on similar accusations. Now, it seems this year’s crop of record-breaking fraud charges are causing companies to stand up and take notice once more.

According to a report in Monday’s New York Times, investigators like Kroll Inc. and Decision Strategies are looking for criminal records, witting or unwitting participation in fraud cases, personal bankruptcies, addiction problems, disparities in an executive’s lifestyle and salary, and sexual harassment complaints — even if those complaints never get filed or prosecuted.

So what kinds of bad apples have such probes turned up? One investigator, who asked not to be identified, told the Times about a tip about missing money involving a CFO candidate. A flight to Europe and a long drive to the countryside led the investigator to a former business partner of the candidate in question, who accused the executive of embezzling $5 million from their partnership. When asked about the incident by his prospective employer, the would-be finance chief withdrew his candidacy.

Something to consider. After all, “people’s ethics don’t change over time,” says Wharton’s Mittelstaedt. “And by the time you get to be CFO, [proving] doesn’t matter as much as a solid ethical past.”

(Editor’s note: For an in-depth look at why some finance chiefs cross the line at their jobs, read “What Makes CFOs Tick?”)

On the Move

Crimson tide? Brown University snagged Harvard University‘s VP for finance Elizabeth Huidekoper to be the school’s own EVP for finance and administration. Huidekoper starts her first semester at Brown on October 15th, succeeding Donald J. Reaves.

Since becoming VP of finance at Harvard in 1996, Huidekoper revised the university’s budget and planning processes, restructured internal management of working capital, developed a university debt policy, and revised Harvard’s risk management policy. Working with the vice president for administration, she implemented a new capital planning process.

Huidekoper joined in 1981. Before that she was deputy director of the Council for Northeast Economic Action, a nonprofit organization involved in economic development and research projects in New England; and a project manager in the city of Boston’s finance department….

>> APX, transaction-processing services provider to electric power industry, named Dan Steimle VP and CFO. Steimle previously held CFO posts at telcos like LGC Wireless, Transmeta Corp., and Advanced Fibre Communications Inc.