What, if anything, went wrong with Christchurch City Holdings’ recruitment of their Chief Executive, Tim Boyd, and what are the learnings? By David Hammond from Tribe Leadership Search.
In September this year media outlets broke the story of CCHL employing Tim Boyd as its chief executive, and then his quick resignation after around six months.
The media outlined various differences of opinion over use of consultants, which did not sound particularly material to me.
More substantively in the media versions were three default judgments against Tim by courts in the US awarding damages worth more than $28.5 million. Did the CCHL Board know about that on appointment?
This case is not the first, nor will it be the last of its kind.
The public sector and media still remember the appointment of chief executive Nigel Murray into the Waikato DHB; and other such cases are regular. As a former chief executive myself, I know that you can’t make many things happen in New Zealand without detractors. But these profile cases have several commonalities.
They revolve around the probity (background checking) done on candidates; involve other countries where candidates lived; there are conflicting narratives about what actually happened in that country; irrespective of the truth of what happened in that country, boards come under intense pressure over the appointments; and external recruitment agencies are used.
The standard probity checking of a recruitment agency involves New Zealand Ministry of Justice, Credit checks, and key education. Additional ‘Reputation Checks’ can be commissioned. Reference checking is done on a 360-degree basis of the candidate. If the client company does its own reference checking this often invalidates the Recruitment Agency guarantee, because the quality of the company’s own reference checking cannot be validated.
A key challenge for any executive candidate is providing a referee who is their current employer. Recruitment agencies and their clients also have to deal with a situation of arriving at an offer subject to this final hurdle before an appointment. It is contentious but important.
There are plenty of areas that can go wrong in probity checking. At Tribe Leadership Search (focussing on executive and board appointments, and consultancy) we give the following guidance to the local government sector.
Talk probity from day-one
Probity should be a factor in the proposal you receive from the recruitment agency – not an ‘add-on’ consideration. It is a discipline in its own right. Ask the recruitment agency how this is done and who is contracted to do it.
If the successful candidate has had a career period overseas, Tribe recommends that Reputation Checking be extended to that overseas country. The cost of such probity should be discussed up-front.
Rights and wrongs
As an issue appears through probity, you can get drawn into judgements about who was right or wrong in that situation. The truth is that you, and the recruitment consultant, will never know. The right question is what impact this information in the public area could/will have on your reputation as an organisation or board.
Take extreme caution about referees
Tribe actually checks that referees are who they say they are. While it is tempting for a client to do the referee checks themselves, this may invalidate your legal guarantee with the recruitment agency.
We recommend that you allow the recruitment agency to do their checking, and that you, as a client, take the opportunity to follow up with referees with additional questions.
There is often chatter about a candidate that the board gets exposed to. Often a board member will know someone who knows the candidate, and will scurry around having semi-confidential conversations. This is the lowest form of accurate validation and should be forbidden or stopped by a recruitment panel chair. However, issues raised by hearsay do need to be explored professionally and responded to.
Finally, recruiting in the end is not an exact science, but I would say that you need to do your own probity on any agency you choose to partner with.