The Hidden Dangers of Executive Hiring: Why Skipping Background Checks Could Risk Your Business Stability

Imagine this: you’re expanding into China, and you’ve just hired what seems like a dream executive — polished, connected, experienced. On paper, he’s the ideal candidate to lead your Asia strategy. But a few months later, the truth unravels. 

He’s not who he claimed to be. 
Not the CEO of a top Chinese conglomerate. 
Not even remotely connected to the company he cited. 

His entire resume was a fabrication. 

This isn’t hypothetical. It happened in 2015 to a U.S. tech firm, and the fallout was swift: reputational damage, broken investor confidence, and a costly reset of its China expansion plans. 

But perhaps more concerning is this: he’s not the only one. 

 

A Growing Risk in a High-Stakes Market 

China is a market of opportunity, but also one of elevated risk, especially at the senior executive level. Scientific research and real-world data show that resume fraud is not just common, it’s systemic. 

A global study by HireRight found that 85% of employers had caught applicants lying on resumes or job applications. In China, the issue runs deeper. Some studies also revealed that 86% of Chinese companies had experienced internal fraud, which is the highest rate globally. 

When hiring executives, those who shape vision, steer strategy, and influence culture. Any wrong choice can be catastrophic. 

 

Real Stories, Real Consequences 

Consider these real-world cases: 

• The Plagiarized Resume: A senior executive at a multinational firm in China copied another professional’s entire LinkedIn profile. He wasn’t exposed until months later, after influencing major strategic decisions. 

• The Ghost Employee Scheme: A company lost millions when a senior executive secretly placed fake employees on the payroll and pocketed their salaries for years. 

• The Fake Harvard MBA: A high-ranking executive boasted credentials from Harvard Business School. An investigation revealed he’d never even set foot on campus. 

• The Identity Thief: One imposter assumed the identity of a real executive to land a senior position at a major company. The fraud only came to light when the real person discovered his “double.” 

• The Insider Trader: A senior hire neglected to disclose past ties to competitors he exploited to gain inside information, landing the company in legal hot water. 

These stories aren’t just cautionary tales; they are a wake-up call. 

 

Why Surface-Level Hiring No Longer Works 

In today’s high-trust, high-speed business environment, many companies still rely heavily on interviews, references, and intuition. But without verification, even the most confident candidate could be hiding serious red flags. 

From falsified credentials to fabricated references, from exaggerated experience to false citizenship claims, the risks are real, and the damage, often irreversible. 

 

Pre-Employment Screening: A Strategic Shield 

So, how do you protect your company? 

By making pre-employment screening a non-negotiable part of your hiring process. 

Thorough due diligence, including credential checks, reference validation, litigation and regulatory reviews, and employment history analysis, does more than catch fraud. It also: 

• Builds trust and accountability 

• Protects your company’s reputation 

• Safeguards financial and strategic decisions 

• Aligns with China’s regulatory push for transparency and integrity 

Done right, screening also sends a clear message: your company values ethics, professionalism, and long-term growth over short-term convenience. 

 

The Bottom Line: Don’t Gamble on Leadership 

Hiring the wrong executive in China isn’t just a bad decision; it can be a costly, public mistake that unravels months or even years of progress. 

So, before you shake hands with your next senior hire, ask yourself: 

Do I really know who I’m hiring? 

Because in a market where appearances can be deceiving, trust must be earned and verified. 

A few extra days of due diligence today could save your company from years of turmoil tomorrow. 

At CBI, we specialize in providing tailored, discreet, and in-depth employment screening services designed specifically for the Chinese market. Contact us to learn how we can help you hire with confidence.