The Discreet Science
June Newsletter: Our Clients Ask for Reputational Diligence
Dear Friends,
The recent embarrassment visited upon Yahoo!’s board of directors—and its former CEO Scott Thompson—reminds me of an important trend that I would like to bring to your attention.
Thompson, you will remember, padded his resume. Not satisfied with his college degree in accounting, the tech company CEO added a computer science degree to his CV, something a run-of-the-mill background check may not have picked up.
Only when an activist investor started really digging was it discovered that Thompson’s alma mater didn’t even have a Computer Science department in the 1970s when he attended. The story has received so much attention for the way it cast doubt upon the new CEO’s personal ethics and his fitness to run a large corporation.
But I draw a different conclusion: in today’s high-pressure communications environment, discovery is inevitable. There are too many interested parties with too much access and too many reasons to ferret out any detail about a prominent figure. The same applies to companies—only more so.
Reputational Diligence
Smart players in the global business world have begun to ask us to perform a thorough and independent review of their reputation and its basis in fact. You could call it Reputational Diligence. These assignements are designed to give the subject an understanding of how others will perceive their backgrounds, their actions or the corporate entities they own or operate through. Our clients know that they’re getting a window on what others see during a cursory search for information before an important meeting or what information might come to light in the heat of a deal.
A staple of modern corporate strategy is having the ability to uncover damaging information about one’s opponents. This practice, which began as opposition research in politics, has now become widespread in business. It is to our clients’ benefit to know ahead of time what their opponents might seize upon, what regulators might flag and what they can begin to ameliorate before engaging in a significant venture.
Reputational Diligence can take two forms: a check of public records or an in-depth reputational review covering a subject’s entire career, his or her ownership interests and any political connections that have played a role in his or her business. Proper reputational diligence also evaluates the subject’s operational behavior against an industry’s standards and practices.
Deep Diligence
Our background research goes beyond “due” diligence. Our client’s come to us for “deep” diligence. (It’s their word, actually.) That includes determining as best we can the truth of various allegations, understanding the subject’s social and media footprint and gauging sentiment about the subject and his or her actions.
We do our research using proprietary technology and in-depth interviews. Our in-house analysts research extensively and collaborate with knowledgable sources and investigators in cities around the world where the subject has had dealings. We look through holding companies and corporate entities then consult the relevant experts—whether local/national law enforcement or knowledgeable industry participants—to best determine reality and risks.
At the end, we produce a truly independent report that allows the subject to see himself or herself through the eyes of the rest of the world. Armed with this knowledge, our clients can explain, dispel or capitalize upon the impressions we’ve uncovered. Our work is confidential, frank and authoritative, an invaluable tool for anyone who wants to ensure they don’t get blind-sided or a rare opportunity to set the record straight before a reputation is unfairly diminished.
June, A Busy Month
June has a been a big month for us. I want to take a moment to share with you all that has happened. K2 Global Consulting became K2 Intelligence and we moved offices a few blocks in Manhattan to accommodate our growing staff, including:
- Louis Vetter who joined us as a forensic accountant. He has served as the expert to the trustee in a highly publicized Ponzi scheme and testified in numerous adversary proceedings.
- Dana Irvis who comes to us from the New York County District Attorney’s Office, where she most recently worked in the Major Economic Crimes Bureau investigating complex white-collar crimes including money laundering, commodities trading fraud and mortgage fraud.
- Mitch Silber will lead our new K2 Analytics division as it develops and deploys new products and services. He will be building upon his experience as the Director of the NYPD Intelligence Division’s Analytic and Cyber Units where he used some of the most sophisticated technologies available to the government. With K2 Intelligence, Mitch will be able to adapt those same tools to private sector uses.
One area of our work that Mitch will be helping to support is our Anti-Money Laundering Compliance and Fraud Detection and Prevention for financial institutions. We will be hosting a breakfast at our offices on July 31st where our practice leaders will explain more how AML and Anti-Fraud measures are converging. If you’d like to attend, please register here or feel free to get in touch.
Best,
Jeremy M. Kroll
CEO and Co-Founder
K2 Intelligence, LLC
K2Intelligence.com
