Discreet Research Alleviated Concerns About a Potential Company Board Member

Background & Challenges

A life sciences company sought to add an independent director to its board and wanted to conduct a thorough review into the individual’s reputation, and to understand any potential governance issues at companies where he had previously served as a board member. BDO was engaged to provide an in-depth profile of the individual’s professional history and to verify all biographic information that would eventually be included in the company’s SEC filings.

Approach

Through public record research, BDO identified a short-lived, chairman role at an investment fund for the individual. Our research into the fund identified an executive as a disqualified director who had been implicated in a number of offshore fraud schemes. Further research found other seemingly related entities that linked the two individuals through a common connection, though none of the companies remained active. Based on these initial findings, the client wanted to understand whether its nominee director had simply not done his due diligence before accepting the chairman role, to what extent he was connected to the fraudster, and whether he had any other problematic connections. In parallel to the client querying the nominee director, BDO conducted discreet inquiries to understand the issues and to determine whether the nominee was being forthright with his explanations regarding his prior role and the reasons for his departure from the fund.

Client Impact

Based on BDO’s findings, the client was confident in the nominee director’s explanation of events and did move forward with adding him as an independent director to the company’s board.