Article
Written by Will Aitkenhead
Posted on 10/06/2015

Scandal at FIFA echoes the importance of director checks

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The corruption scandal currently unfolding at FIFA underlines the fact that choosing the right employees is paramount to the integrity and success of an organisation. While it will never be possible to guarantee with absolute certainty an employee’s reliability, director checks can provide useful support.

The FBI are investigating allegations of bribery and corruption within FIFA that stretch back years, culminating in the arrest of seven FIFA officials at the end of May and the resignation of FIFA president Sepp Blatter earlier this month.

The seemingly omnipotent organisation of world football is crumbling amid evidence of corruption that involves alleged payments for World Cup hosting rights. Russia and Qatar’s right to hold the 2018 and 2022 World Cup, respectively, are under question, as both the FBI and Swiss authorities look for incontrovertible proof that bribes were paid to secure these deals.
 

Widespread corruption

While seven officials were arrested in May, 18 officials were named in the FBI’s indictment, with offences ranging from racketeering to fraud and money laundering. It seems corruption was at the heart of the organisation. So how did the FBI get a window in?

Chuck Blazer, the right-hand man of one of FIFA’s most controversial figures, Jack Warner, pleaded guilty to unpaid tax bills totalling millions in 2013. Known as Mr Ten Percent for the lucrative contract he signed with Concacaf (the Confederation of North, Central America and Caribbean Association Football), awarding him 10% commission on sponsorship and TV rights, Blazer became a supergrass for the FBI and recorded his colleagues with a wiretap.
 

Why use a director check?

If corruption prevailed throughout two generations of FIFA, as the hazy picture is beginning to suggest, a director search is unlikely to have ousted the problem. However, for the average organisation, with integrity and a code of morality, a director check can be critical in protecting your company.

Indeed, a director check can be a valuable tool to complement the information in an HR reference. While a number of organisations can provide company director checks, they all draw on fundamental data from Companies House and the County Courts.

Conducting a director check is always worthwhile because, even if a potential employee isn’t applying for a director position, they may be a director of their own organisation or have been a company director in the past.
 

What a director check can reveal

At a basic level, director checks are useful for confirming dates of a directorship, which you can cross reference with a candidate’s CV. But at a more material level, you can research the company at which they were a director and analyse its performance and history. For example, if a company’s financial health or performance improved while the candidate was a director, this could be a positive reflection on their skills. Conversely, if a company’s financial performance declined during this period, or if the company was liquidated or investigated for fraud, these are all potential red flags that should be questioned.

Of course, it’s worth bearing in mind that many companies suffered adversely during the financial crisis and being director of a failing company could offer a valuable learning experience. The skills and insight gained could better equip them to direct a company in the future. Either way, it’s worth asking questions about this during the interview process.
 

Director check red flags

There are, however, a few certified red flags. If a director check reveals that a director is disqualified, personally bankrupt or currently subject to a bankruptcy decision, it’s illegal for them to hold a present directorship.

So whether you just want to find out more about a potential employee’s skills and career history, or your requirements are more in-depth, conducting a director check can reveal a wealth of useful information.

With Graydon’s company director search, you can find data on over six million director and company officer appointments within UK registered companies.