What is due diligence? Why is it important in every business relationship? Unfortunately, for Kansas University (KU), it learned a major lesson in the importance of appropriate due diligence in one of the biggest hiring disasters in recent memory, in its head football coach Les Miles. Miles was terminated when it turned out that he had been less than truthful in the hiring process and then when allegations of conduct at this prior employer were made public.
Miles’ departure came three days after he was put on administrative leave after allegations of sexual harassment surfaced from his prior employer, Louisiana State University (LSU). These allegations were reported in an internal investigation report completed by the law firm of Taylor, Porter, Brooks & Phillips LLP, Taylor Porter, during his tenure at LSU. The allegations in the report were quite damning with a remedy which included a requirement that Miles could not be alone with any female students or employees. Over several blog posts this week, I will be looking at the entire imbroglio and mining it for lessons that the compliance practitioner can put into place. Yesterday I began with the KU decision to hire Miles. Today, I consider the less than adequate due diligence performed by KU.
Miles was hired directly by former KU Athletic Director Jeff Long (AD Long). Chris Low reported in an ESPN.com article that Long hired Miles based upon a long-time friendship that began at the University of Michigan in the late 1980s and early 1990s. Adam Rittenburg, also writing in ESPN.com, said, “The Kansas coaching search in 2018 really wasn’t much of one. Long didn’t use an external firm to assist in the search, zeroed in on Miles and made the hire in mid-November, two to three weeks before the coaching cycle usually gets rolling…Long and Miles went back to their time together at Michigan, when Miles coached under Bo Schembechler and Gary Moeller, and Long served as an assistant athletic director. The two men were friends. Long desperately wanted to get rid of David Beaty and hire his own guy.”
Problem No. 1 was Long’s abysmal due diligence. Harry Miles, writing in ESPN, reported that AD Long said in a news conference, “When Les Miles was identified as the lead candidate to be the head coach in 2018, the University of Kansas and Kansas Athletics does, with all hirings, we ran multiple background checks on Coach Miles.” Long also stated, “I also asked Coach Miles directly during the interview process whether there was anything in his past that could potentially embarrass the university or himself or our program, and he said no. We also did our due diligence by talking to individuals within the LSU athletics department to see if there was anything we should be aware of regarding Coach Miles’ tenure at LSU and received no indications of any issues.”
What were those “multiple background checks on Coach Miles”? Neither AD Long, nor anyone else at KU or elsewhere has laid out any background checks run on Miles. What is the apparent reality of those checks? Probably they were perfunctory at best. Adam Rittenburg, also writing in ESPN said, “The Kansas coaching search in 2018 really wasn’t much of one. Long didn’t use an external firm to assist in the search, zeroed in on Miles and made the hire in mid-November, two to three weeks before the coaching cycle usually gets rolling…Long and Miles went back to their time together at Michigan, when Miles coached under Bo Schembechler and Gary Moeller, and Long served as an assistant athletic director. The two men were friends. Long desperately wanted to get rid of David Beaty and hire his own guy. The familiarity factor will always be present in coach hires, just like with job searches in other fields. Long knew Miles for decades. He felt comfortable in hiring his buddy. But the process must not be so simple.”
And as AD Long himself said, “I also asked Coach Miles directly during the interview process whether there was anything in his past that could potentially embarrass the university or himself or our program, and he said no.” That seems to be the extent of AD Long’s due diligence into Miles. It did not even move into the Reagan-esque territory of Trust but Verify.
Candice Tal, Founder and Chief Executive Officer (CEO) at Infortal Worldwide, has noted that the key is that a company engages in an executive due diligence investigation rather than simply a routine or even executive-level background investigation. Tal explained that an executive background search is “typically limited to a five-component review of: criminal records, employment verification, degree or education verification, social security validation, address verification and sometimes credit history.” Such searches are “very limited searches.”
Conversely, she explained that executive due diligence, “looks in-depth at all available public records sources: criminal history, civil litigation issues, financial and legal issues, relationships with other companies and board advisory positions, reputation, misrepresented education and overstated work history, behavioral history (for example litigiousness), and, in particular, undisclosed or adverse issues.” While it is generally “more costly than executive background checks and takes more time, the information gathered is extremely valuable and can save a company substantially more. A high-quality due diligence review can find important information which would not be returned in a routine executive background check.”
Another tool that is often overlooked in the hiring process is the basic reference check. Many practitioners feel that a reference is not of value because prospective candidates will only list references that they believe will provide glowing recommendations of character. This leads to a pro forma reference check. However, in a 2012 Harvard Business Review article, entitled “Gilt Groupe’s CEO on Building a Team of A Players”, author Kevin Ryan exploded this misconception by detailing the importance of checking references.
Rittenburg also wrote about the need for colleges (and by extension any other business entity) about the need for the involvement of professional search firms in such an important process. He said, “They’re expensive and emblematic of a sport where money is thrown around without care or consequence, even during a financially crippling pandemic. Many question the rationale for using search firms after athletic directors and schools make familiar or seemingly obvious hires. But there are misconceptions about the firms. They don’t make hires. They assess interest among coaches, conduct background checks and provide an extra layer of protection for the schools.” Needless to say, AD Long did not involve a professional search firm.
Join me tomorrow where I explore the fallout of the failures of everyone involved, AD Long, KU, LSU and all those involved.
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