Home / Blog / Director check: what is it and how can it benefit you?

25
Nov
director check

The director check helps minimise risk to your organisation by giving an insight into any potential high-level hire. Here are the essentials.

No matter your company’s size, when hiring for senior management, you want to minimize the risk of your appointment. It could be a serious waste of your time trying to hire a new director for the business without carrying out a director check. You could go through the whole process only to find out that Companies House currently disqualifies them from holding the position. The ramifications of this aren’t only the wasted time, but the potential damage to the reputation of your company.

At its core, the director check is an investigation into both current and past directorships that your candidate has held. It will reveal any prior disqualifications, as well as if they are currently barred. It will also bring up all dates of appointment, previous organisations and, if relevant, the details of any disqualifications. This can also be useful for confirming dates of employment. For example, if your candidate was previously self-employed at their own company.

The director check has a fast turnaround due to the comprehensive and frequently updated databases that they draw from. These include the previously mentioned Companies House, as well as others such as County Courts. If you use a service like Credence’s, we can also carry out the check internationally across a wide range of different countries. The reputable nature of the databases means reports drawn from them are incredibly accurate.

Other uses include minimizing credit risk. As such, businesses in the credit industry can use a director check to obtain detailed information about any potential client.

A summary of the benefits

  • Minimise risk in the hiring process. Don’t accidentally expose your company to a disqualified director.
  • Allow your company to avoid people with bad debt, and find those who have made intelligent and profitable investments.
  • It can inform a decision about the credit risk of an individual via revealing past failures or successes as a company director.
  • If you go for a more thorough investigation of the candidate’s previous businesses, you can find any failed ventures through the solvency information.
  • You can use the information to aid in decisions about whether you want to go into business with a person.
  • You can perform a director check on yourself. As the information is publicly available, this can be useful to see what is being held about you

A sample director check report

Click to see a sample of the directorship section of one of Credence’s final reports. This will usually be part of a wider package of checks that we include in the report. You can see that the candidate has no negative information against them. They are not disqualified, and the dates of their previous director post are visible, as well as the company name and number. This particular sample is for a UK check, so the information comes from Companies House.

The director check is a fantastic tool to provide insight into a person’s business viability – whether they are a job candidate or a potential business partner. Wider parts of the check can also shed light on the credit risk of an individual – useful information for financial institutions. To summarise, it allows you to make an informed decision on a subject that is critical to business success.


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