By Tracy Levine, President, Advantage Talent, Inc.
Nothing is more taboo to discuss for a Financial Executive than personal bankruptcy. It seems to many that somehow it is more shameful than the CEO down the street who also filed for bankruptcy. Unfortunately, for many Americans and particularly financial executives personal bankruptcy has become a reality. As the news reports show, people across the board have been directly affected by brokerage firm closings, bank closings, company closings or company downsizing. Home foreclosures continued to rise throughout the end of 2008 and beginning of 2009. Economists are not predicting a quick recovery.
For anyone who has applied for a financial position recently you know that it has become common practice for firms to run a “routine” credit check. It is my understanding that Section 525 of the U.S. Bankruptcy Code prohibits discrimination based solely on bankruptcy. Typically, no one will come right out and say that they will not consider a candidate based on personal bankruptcy but will come up with numerous other excuses that are not prohibited by law.
Traditionally, companies are not keen on hiring a financial executive that has gone through personal bankruptcy. There is the perception that somehow the personal bankruptcy has a direct correlation to a persons’ financial acumen and that a company is at a higher risk of white collar crime by an employee that has filed for bankruptcy or that a bankruptcy directly correlates with the person’s ability to be an intelligent effective manager of the company’s assets . There are no statistics to bear out either of these erroneous beliefs.
As we have seen with the executives of Bear Stearns and Lehman and the alleged ponzi scheme orchestrated by Madoff, a good credit rating does not equal financial acumen or correlate with extreme honesty and effective management of the company’s assets. In the current economy, corporations need to shift their prospective or miss out on possible exceptional candidates. Candidates need to be up front and honest about personal bankruptcies with a short explanation and then focus on what skills they bring to the table. Honesty goes a long way in overcoming obstacles.