Reverse directorship: A frontline defense against risks of conflicts of interest

Reverse directorship: A frontline defense against risks of conflicts of interest

Business in the modern era faces new challenges, one of which is the risk of conflict of interest that can be a significant source of loss. Conflicts of interest arise when employees within an organization or company possess personal interests that could potentially sway their responsibilities and decision-making processes.

In this context, it becomes imperative for companies to proactively identify, prevent, and manage conflicts of interest to safeguard the integrity and well-being of their business.

So, how can companies mitigate this risk in the first place? One effective approach to mitigate this risk is to incorporate reverse directorship into their background check procedures, especially for candidates who will occupy key positions within the company.

The reverse directorship method

Reverse directorship is a strategic inquiry into an individual’s potential involvement as a director or shareholder in a private company. It delves into aspects such as reputation, personal interests, company profile, shareholding, past or present executive roles, and litigation records.

Its significance goes beyond recruitment efforts for senior, managerial, and board positions; any candidate, regardless of their professional tier, may undergo scrutiny, particularly if they have a history of self-employment, unveiling potential conflicts of interest.

Candidate background check leveraging technology

As part of assessing a candidate’s background, reverse directorship plays a pivotal role alongside other essential checks such as verifying diplomas and employment history. Gathering comprehensive information about a candidate is a time-consuming and complex process that demands meticulous attention.

To streamline and fortify this process, companies can enlist the services of third-party specialists in candidate background checks. Integrity Asia, for instance, offers an integrated employee background screening platform named Prisma. Empowered by cutting-edge technology, Prisma adeptly meets client demands by securely and promptly managing vetting requests, ultimately producing detailed reports.

Furthermore, the presence of the Applicant Portal feature is convenient for the recruitment team. This functionality allows the team to invite candidates to input information and upload necessary documents, including consent letters integral to the recruitment process. This consolidated interaction on a unified platform empowers the recruitment team to allocate more focus to talent management functions.

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