By Charles Shanley, SPHR, CFS
Just as the financial services industry was recovering from the reputational damage caused during the Great Recession, reports continue to surface about the millions of phony deposit, credit and debit accounts being opened in the names of unsuspecting consumers at a major U.S. bank. As investigations into the situation continue, the question Congress, regulators, industry observers and consumers are asking is, “How could something of this magnitude have gone undetected by the institution’s management for such an extended period of time?
As the effects of economic and regulatory uncertainty continue, there must be a renewed commitment by all financial institutions to value and protect the financial well-being of their account holders – because consumers aren’t yet convinced that the financial services sector is completely trustworthy. In the recently released 2016 Makovsky Wall Street Reputation Study, nearly one-third of respondents reported that they have lost trust in the financial services industry – a five percent increase from 2015. And more than three-quarters stated that even negative news about their current institution of choice – including regulatory issues, illegal activity and fines – is likely to cause them to switch financial service providers.
While the majority of problems dealing with ethical missteps seem to appear to occur in the largest institutions, maintaining an environment where your account holders have faith that their best interests are being served when policies and procedures for doing business are created. It starts by building a team of leadership and management professionals who are committed to maintaining a culture of trust and transparency in every aspect of the business.
Executive recruiting is the first line of defense
When conducting an executive search for C-Suite and other top management positions, it is imperative that you are able to spot the candidates who will maintain the highest business standards, in addition to possessing the right financial experience and business acquisition skills. This includes the ability to build a culture that supports ethical practices and procedures, the willingness to set a good example for employees to follow and an on-going commitment to rewarding employees for doing the right thing.
This process begins by establishing resolute benchmarks of the leadership characteristics you are seeking and staying true to those requirements until the hiring contract is signed. Following are four steps you can take to lock in the leadership characteristics necessary to maintain a culture of trust and transparency.
1. Take an objective assessment of each candidate’s fit with your corporate culture
While a candidate may say the right things in an interview, it isn’t unusual for someone with all the right credentials to miss the mark when it comes to fitting into your existing culture. Ask each finalist to describe his or her ideal work environment and boss, as well as the characteristics of a successful sales and service model. Then, set time in the final phase of the interview to take leading candidates around to meet staff and board members to see how they interact with these important stakeholder groups.
2. Evaluate the potential financial impact candidates have made in previous positions
The best-written resume or LinkedIn recommendations can detract from any concerns from a previous job situation. So it is important to be thorough when checking a candidate’s background. Was he or she discharged from a previous job? If so, why? Is there information to suggest problems occurring at a previous employer when the candidate was in a leadership role? Did he or she hop from job to job in a short amount of time? While a candidate may present himself or herself in a very positive way, information uncovered in a background check can point to characteristics that might prove problematic down the road.
3. Incorporate interview techniques and processes that uncover how a candidate would respond to certain business situations
You should be well versed regarding the basics of a candidate’s work background going into the interview. So don’t spend a lot of time rehashing the resume. Set up a role-play scenario to see how he or she would problem-solve a situation that would require making ethical decisions and taking socially responsible actions. Consider an actual recent scenario from within the bank or credit union and see how the candidate’s recommendations measure up to the steps that were actually taken to address the situation.
This type of discussion can also uncover a candidate’s strengths or weaknesses when it comes to management philosophy, communication style and the ability to get along with various stakeholder groups.
4. Utilize robust personality and profile testing to determine leadership abilities
Some candidates are very adept in an interview and can have the right answers regardless of whether or not they are accurate. A personality profile test essentially confirms if the candidates are who they say they are, because you can’t lie on this test. The test results will help to answer a lot of questions about each candidate’s leadership style, as well as how they mentor and develop people, and whether or not they are a good cultural fit for the institution.
Finding the right leadership fit takes time and tested resources
A successful executive search is time-intensive and requires ongoing attention to a laundry list of details, especially when you have strict hiring criteria. By establishing a relationship with a professional recruiting firm – before there is an opening in your institution – you will have access to expertise that can help you identify the qualities you are seeking and the tools required to complete a thorough vetting process. In the end, you can rest easier knowing that you have access to the caliber of quality candidates who can successfully lead the organization, while maintaining a culture that your employees and account holders can trust.