Checking Out the Company Before You Accept an Executive Role
By the time an offer arrives, most senior candidates are tired. The process has run for weeks or months. There have been panels, presentations, psychometric tests and reference checks. When the call finally comes, the natural reaction is relief, and a strong urge to say yes.
That is exactly the moment to slow down. The organisation has spent months checking you. You may have spent far less time checking it. And at executive level, the cost of joining the wrong business is high. A short, unhappy tenure can take years to explain.
From my years in executive search, I saw many candidates accept roles with their eyes half open. Most were fine. Some walked into problems they could have spotted with a few careful questions. Here is how to do your own due diligence before you sign.
Why due diligence matters more at senior level
A junior hire who joins the wrong organisation can usually move on quietly. An executive cannot. Your name is tied to the results. If the business is in worse shape than you were told, you will be the one explaining the numbers.
Senior roles also carry more risk that is hard to see from outside. Board tension, a CEO under pressure, a strategy that is not funded or a culture problem behind a polished website. None of these will show up in the job description.
You do not need to act like an auditor. But you do need enough information to make a clear decision.
Check the financial health
For finance leaders, this is familiar ground. For other executives, it is just as important.
Read the public numbers. Annual reports, financial statements and any market announcements. Look at revenue trends, margins, debt levels and cash flow. If the organisation is private, ask what financial information they can share, even at a high level.
Look for warning signs. Falling margins, rising debt, going concern notes, late accounts, repeated restatements or a change of auditor can all be worth a question.
Ask about funding. If the role comes with a plan, such as growth, a system change or a turnaround, ask how it will be paid for. A strategy with no budget is a wish list.
Understand ownership. Private equity, family, listed, government or member-owned businesses all behave differently. Know who really makes the decisions and what they expect.
Understand the strategy
Ask the CEO or chair to describe the strategy in their own words. Then ask how your role fits into it.
Listen for:
Whether the strategy is clear and agreed, or still being debated
Whether the CEO and chair describe it the same way
How your role will be measured in the first year
What resources and authority come with the role
If you hear three different versions of the strategy from three different people, that tells you something important.
Look at board and CEO stability
At senior level, your success often depends on the CEO and the board. So it pays to know how stable they are.
Consider:
How long has the CEO been in the role, and is their contract near its end?
Has the board changed a lot recently?
Are there signs of tension between the CEO and the chair?
Is a sale, merger or major restructure on the horizon?
A CEO who has just been appointed may bring energy and a clear mandate. A CEO who is under pressure may be hiring you as part of a last attempt to turn things around. Both can work, but you want to know which one you are joining. Our guide to board role due diligence covers similar questions from a director’s point of view.
Find out why the role is vacant
This is one of the most revealing questions you can ask. There is always a reason.
A new role. Ask why it was created now, and who pushed for it. New roles can lack clear authority or support.
A replacement. Ask what happened to the last person. Were they promoted, did they retire, did they leave for another role, or were they moved on?
A repeated vacancy. If the role has been filled several times in a short period, ask why. It may be the role, the reporting line or the culture.
You will not always get the full story. But a calm, open answer is a good sign, and a vague or defensive one is worth noting.
Reference check the employer
The organisation has checked your references. You can check theirs, quietly, through your own network.
Look for people who know the business well:
Former executives or senior managers
Advisers, auditors, bankers or lawyers who have worked with it
Board directors who know the chair or CEO
Recruiters who have placed people there
Keep it discreet and respectful. You might ask what it is like to work with the CEO, how the leadership team works together and why people tend to leave. Do not share confidential details of the offer, and do not ask anyone to breach their own obligations.
Questions to ask the CEO or chair
Before you accept, it is reasonable to ask for a final conversation with the CEO, the chair or both. Most organisations will agree. Use it to ask the questions that were not covered in the interviews.
For example:
“What would success look like in this role at the end of the first year?”
“What are the biggest risks facing the business right now?”
“What did not work with the previous person in this role?”
“How do you and the board prefer to work with the executive team?”
“What would make you think, in six months, that you made the wrong hire?”
“Is there anything I should know that has not come up so far?”
A strong leader will welcome these questions. Our piece on the first 90 days in a senior role shows how the answers can shape your early plan.
Worked example: two offers, one decision
Here is an illustrative example of due diligence changing a decision.
A finance leader in Melbourne has two CFO offers. Offer A is from a larger, better-known business with a higher package. Offer B is from a smaller, private business.
What the checks on Offer A showed: The CEO has been in the role for four years and the board is openly talking about succession. The last two CFOs each stayed less than 18 months. Two informal calls describe a leadership team that rarely agrees. The strategy described by the chair differs from the CEO’s version.
What the checks on Offer B showed: The owners are clear on a five-year plan and have committed funding. The previous CFO retired after eight years. An adviser who works with the business describes the CEO as demanding but fair.
The candidate chose Offer B. On paper, Offer A was stronger. The due diligence showed that it also carried much more risk.
Red flags to take seriously
No organisation is perfect. But some signs deserve a closer look before you accept.
Nobody can clearly explain why the role is vacant
The strategy changes depending on who you ask
You are pushed to accept quickly, without time to think
Key facts about the role, such as reporting line or scope, shift late in the process
The CEO or chair avoids direct questions
Several recent senior departures, with no clear explanation
Informal feedback from your network is consistently cautious
One red flag may have a good explanation. Several together are a strong signal.
Get the offer terms right
Due diligence is not only about the business. It is also about the offer itself.
Read the contract carefully before you sign. Look at the reporting line, title, scope, notice period, termination terms, restraint clauses, incentive plans and any conditions on bonuses or equity. Make sure what was said in conversation matches what is on paper.
Employment terms and restraints can be complex, and they differ between Australia and New Zealand. It is sensible to take advice from an employment lawyer before you sign a senior contract. Our guide to executive offer negotiation covers how to raise changes professionally.
If you are resigning from a current role, plan that step with care too. Our piece on counteroffers and resigning well explains how to leave on good terms.
Common mistakes
Accepting on the spot. It is normal to ask for a few days to review an offer. A good employer will understand.
Relying only on the interviews. Interviews show you the organisation at its best. Your own checks give you a fuller view.
Asking only friendly questions. The hard questions are the ones that protect you.
Skipping the contract details. Verbal promises that are not in writing can be hard to rely on later.
Ignoring your instincts. If something feels wrong, find out why before you sign.
Questions to ask yourself
Do I understand the financial position and who funds the plan?
Do the CEO and chair describe the strategy in the same way?
Do I know why this role is vacant and what happened to the last person?
Have I spoken to at least two people outside the process who know the business?
Does the written offer match what I was told?
Would I still accept if the process had been faster and I felt less relief?
If you cannot answer yes to most of these, it is worth pausing.
Say yes with your eyes open
An executive offer deserves the same care you would bring to any major business decision. Check the numbers, test the strategy, understand the people and read the terms. Most of the time, your checks will confirm that the role is right. When they do not, you will be very glad you looked.
If you are weighing up a senior move and want a clear way to test it, see how I approach executive career transitions.
If you have an executive offer on the table, book a complimentary Clarity Session and we will work through the questions to answer before you accept.
