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Radio Shack Resignation Underlines Discrepancies

David Edmondson is the latest company leader to resign after bogus credentials were revealed. His case points out the double standard that exists -- as some companies rigorously screen only lower-level employees.

Thursday, February 23, 2006
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The recent resignation of Radio Shack CEO David Edmondson may highlight a double standard when it comes to background checks for top management.

Edmondson resigned from his post at the Fort Worth, Texas-based electronics chain on Feb. 20 following revelations that his resume included bogus credentials. An examination by the Fort Worth Star-Telegram revealed that the school from which Edmondson said he received degrees in theology and psychology, the Pacific Coast Baptist College, has no records indicating he received a degree, and that it has never offered a degree in psychology. Edmondson has since admitted that his resume included "misstatements."

Edmondson, an 11-year veteran of Radio Shack, became CEO last May after serving in a variety of executive-level positions. Leonard Roberts, Radio Shack chairman and Edmondson's predecessor as CEO, told the Associated Press that the company's background checks did not include academic verification in 1994, when Edmondson was hired.

However, Robert Capwell, co-chairman-elect of the National Association of Professional Background Screeners and founder of Comprehensive Information Services, a Pittsburgh-based screening firm, says checking academic credentials was routine for most companies in 1994.

Robert Hogan, president and CEO of Hogan Assessments, a screening firm in Tulsa, Okla., says the revelations at Radio Shack come as no surprise to him because most corporate boards of directors are more concerned with politics than qualifications when it comes to screening CEO candidates.

"It isn't about competence or leadership; it's about politics, money and ego," he says. "Typically, the board sees this as their prerogative: 'This is who we want to hire, and we're going to hire him.' It's conventional wisdom that boards will hire someone they feel comfortable with, who interviews well.

"Well, guess what?" he asked, speaking generally. "Psychopaths interview well."

Meanwhile, candidates for mid-level positions are screened much more rigorously, says Hogan.

"The rank-and-file get appraised and assessed, but not the people at the top," he says.

Past cases of organization leaders whose backgrounds only came to light after their advancement -- and fall -- include:

* Former Smith & Wesson CEO James Minder, who stepped down as CEO, but retained his role on the company board, after published reports cited his 10 years in prison and an attempted prison escape during the 1950s and 1960s for a string of armed robberies.

* ImClone Systems founder and former CEO Sam Waksal, now serving 7 years in prison as a result of the insider-trading case that also snared Martha Stewart, who failed to mention on his resume that his string of impeccable research positions all apparently ended after reports of misleading and, in one case, falsified scientific work, according to the Wall Street Journal.

* Wally Backman, who was fired after four days as manager of the Arizona Diamondbacks after reports emerged of a DUI conviction, guilty plea to harassment and allegations of spousal abuse, and

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* George O'Leary, who resigned as football coach of the University of Notre Dame five days after being hired, because of false educational and athletic claims.

Peter Felix, president of the Association of Executive Search Consultants, says that, for many organizations, a large gap did exist until about five years ago between the screening processes for executive-level candidates and those for lower-level positions.

"I think in the past, there's no question that boards took a much more casual approach to background checking for senior executives than companies in general did for the rank-and-file," he says. "In the past, board members often relied on their social networks to generate candidates for executive positions. But thanks to Enron and other scandals, they're exercising much more diligence now, at least at public companies."

The AESC provides its members with guidelines on how to educate board members about their responsibilities with respect to background-checking and assessments, says Felix.

"Boards don't want to become embroiled in another scandal," he says.

However, Capwell says too many boards continue to be lax about background checking.

"Corporate boards are still relying too much on their own comfort level with a candidate," he says. "Often, they're reluctant to do a full background check because they don't want to embarrass someone. There's been progress in recent years, but I think we may need to see a few more scandals like the Radio Shack episode before more boards will really take a hard look at these people."

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