Guilty By Association: Vetting Vendors and Other Professionals

May 4, 2010 - PRLog -- David G. Kinney knows first-hand how neglecting to thoroughly vet anyone with whom you associate in your company can irreparably damage your business, reputation, and finances.  A common misconception is that vetting is primarily limited to background checks on employees during the interview process.  Not true.  What about also vetting professional contractors such as accountants and attorneys?  What about investors and business partners?

You should always thoroughly vet anyone with whom you do business; and the threat level rises when legal and financial interests are at stake—not to mention your reputation and livelihood.

Our client, David G. Kinney, is a prime example. When he was CEO of an online media company, David G. Kinney was reintroduced to a former college classmate who invested in his company.  To the surprise of everyone involved, it was eventually uncovered that the investor was running a Ponzi scheme.  Even though he had no knowledge of the fraudulent investment operation being carried out by the investor, since David G. Kinney was the CEO, he was assumed guilty by association.

Perception became reality, and the fallout had a ripple effect.  Not only did our client, David G. Kinney, lose his company, his reputation, and his livelihood, anonymous postings on the Internet also lead to his integrity being questioned.  Although never named in any legal proceeding, David G. Kinney learned the importance of including capital sources in a thorough vetting process the hard way.

Don’t let it happen to you. Unless you want to face legal and financial hardships or, worse, have your good name dragged through the mud, learn from our client, David G. Kinney.  Take the time to vet, not only prospective employees, but also professional contractors, your lawyers, your sources of capital, and anyone else who works with or for your company.  As David G. Kinney now teaches his clients: “Trust but verify.”

Remember that vetting or screening an individual or company involves much more than relying on a referral from a friend or colleague.  Depending upon the situation, a proper vetting process can include but is not limited to:
•   Civil records
•   Criminal records
•   Arrest warrants
•   Financial history analysis
•   Credentials
•   Education verification
•   Reference checks
•   Background checks
•   Better Business Bureau reports

If you haven’t done so already, develop a thorough vetting process for your organization and stick to it. While it may be virtually impossible to completely eliminate all uncertainty, don’t simply rely on instinct or readily available information.  A comprehensive vetting process is integral to preventing financial upheaval, frivolous lawsuits, and devastating attacks on your reputation.  Just ask David G. Kinney.

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Jackie Nagel is the founder and president of Synnovatia™, a strategic coaching firm that collaborates with entrepreneurs and business owners to realize accelerated business and personal growth. Learn more about growing your business by visiting www.synnovatia.com, calling 310.519.1947, or emailing info@synnovatia.com.