Many companies routinely perform background checks before senior hires, but when it comes to board directors it seems this practice is often omitted or questions around the validity of directors’ qualifications surface only after appointment. Given the tremendous responsibility—and potential liability—directors carry and their importance to the organization, they need to be thoroughly vetted before appointment and even during their tenure for periodic updates. There are both moral and legal obligations for undertaking an independent due diligence process to ensure board members have the highest ethical standards, are without conflicts of interest, and can of provide effective governance to the organization.

At LexPro we believe the board due diligence process should be independent, comprehensive, and follow a consistent framework for all board members.

Our professional and tenured researchers go deep and wide in their research, using multiple sources and a proven methodology to provide clients with a comprehensive report. Information is abundant—vast numbers of online databases, the internet, social media, etc.,—but what matters is the accuracy and reliability of the information. This is where depth of experience and human intelligence play a critical role and could be the difference between getting it right, or terribly wrong.

Know Your Board Due Diligence includes:

• Verifying the bona fides—education, employment history, qualifications, licensing, patents, trademarks, etc.

• Uncovering any criminal convictions, material civil litigation, omissions, or conflicts of interest

• Examining a director, or a proposed slate of directors, for common links and affiliations in businesses, boards, proxy battles, shareholder lawsuits, etc.

• Examining other records and sources of information, including but not limited to criminal and sex offender records, bankruptcy filings, liens and judgments, regulatory filings, corporate records, asset ownership, media (news articles, internet content, social media), voting history and political contributions, verification of personal and professional references, and other sources.

Case Studies

On behalf of a major hedge fund involved in a proxy battle, LexPro Research conducted background research on an “independent” board of directors. LexPro Research’s efforts revealed ten of the twelve board members had common links or associations through other boards or directorships, prior corporate affiliations, or educational institutions. Using the information LexPro Research provided, the client was able to demonstrate the board was not as “independent” as it claimed.

In connection with one of the largest corporate mergers of the past few years, LexPro Research vetted the board of a U.S. company before it was acquired by a major European conglomerate.

Ready to Start Properly Vetting Your Next Board Member?

If you are interested in learning more about how we help mitigate risk through our time-tested process, reach out to our experts at info@lexproresearch.com.