Workforce Management, October 24, 2005, p. 14

Copyright 2005 Crain Communications
All Rights Reserved
Workforce Management

October 24, 2005

SECTION: OUT FRONT; Pg. 14

HEADLINE: CONTROVERSY OVER FEMA CHIEF PUTS CRONYISM IN THE SPOTLIGHT

BYLINE: Ross Johnson

BODY:
In the political fallout from Hurricane Katrina, the dirtiest five-letter word in American business and government may be "crony."
When Michael Brown, the former head of the Federal Emergency Management Agency, resigned his post on September 12, the age-old practice of cronyism-i.e., favoritism shown to an old friend without regard to his or her qualifications-came under the media microscope.
Whether Brown was indeed a poster boy for the evils of friendly featherbedding or a fall guy for FEMA's besieged parent organization, the Department of Homeland Security, remains to be seen. But human resource professionals may be uneasily looking at their companies' executive hiring practices in the wake of revelations that no one in the federal government seemed to have done a rudimentary background check on the résumé Brown submitted in 2001.
There have always been land mines for the HR executive who's faced with doing a background check on the golfing buddy of the CEO who's angling for a job or has to tell the boss that a longtime friend submitted false information on a résumé. But the stakes are high now, ranging from the kind of media scrutiny FEMA faced to a legal system that penalizes bad hiring via breach of fiduciary duty and negligent-hiring lawsuits.
"Any board of directors of an organization that condones not doing a thorough background check on any new hire, even if it's for the CEO position, had better hope the stars are in alignment," says Garry Mathiason, an employment law attorney and the chair of the compliance and litigation group at Littler Mendelson in San Francisco.
Mathiason's clients often claim they didn't do a background check on a new top hire because they thought the process would be "insulting, because everybody in the industry knew this person's reputation," Mathiason says.
He cites an instance in which a client initially declined to do a background check on a potential CEO, a well-respected veteran within his industry.
When the background check was finally done, it revealed that the applicant had been indicted, but not prosecuted, for misappropriation of funds and, in a civil case related to the criminal indictment, had been found liable for damages. (The applicant was subsequently rejected for the CEO slot.)
But when an organization demands that all new hires, from truck drivers to the CEO, undergo a background check, pressure for giving a high-ranking candidate a pass is off.
However, an applicant who is friendly with the boss but lacks experience for an open position should not be automatically excluded in the hiring process, says professor Samuel Bacharach, director of Cornell University's Institute for Workplace Studies and the author of the book Get Them on Your Side.
"Hiring someone who is an ally of a leader is not inherently wrong," Bacharach says. "The truth of the matter is, leaders need people in their corner who are going to help them set an agenda and get things done."
But when leaders hire on the basis of cronyism regardless of qualification, "the message the leader sends is one of exclusion, insecurity and payoffs. It also implies a certain fear of looking outside the leader's circle," Bacharach says.
"Mixing the terms 'cronyism' and 'politics' is a cheap shot," he adds. "Cronyism implies incompetence and just keeps your career going in the short term. The best CEOs can identify their political allies who are also competent.
"That's just good leadership."

GRAPHIC: Art Credit: Free pass FOR A FRIEND? Michael Brown's qualifications to lead FEMA came under fire after the agency's much-maligned response to Hurricane Katrina.
Art Credit: Kevin Lamarque/Reuters