Due Diligence Works Both Ways: Questions Executives Should Ask Before Saying Yes

Due Diligence Works Both Ways: Questions Executives Should Ask Before Saying Yes

The Problem with Late-Stage Withdrawals

There is a frustrating pattern in executive search right now. After months of process, promising candidates are withdrawing at the final stage - not because they're not qualified, but because they're discovering relevant information too late in the game.

Companies are equally frustrated, having invested time and resources only to watch strong candidates walk away. But these late-stage withdrawals are often preventable with better upfront due diligence.

In a market where quality executive opportunities are scarce and every placement matters, both sides need to get smarter about early evaluation. The goal isn't to scare candidates away - it's to ensure that when someone says yes, they're making an informed decision they can stick with.

In a market where quality executive opportunities are scarce and every placement matters, both sides need to get smarter about early evaluation.

Why This Matters Now

With fewer executive roles available, companies can't afford to restart searches after months of process. And executives can't afford to make the wrong move when the next opportunity might be months away.

Ask these questions early enough that both sides can make informed decisions without wasting months of everyone's time.

The Financial Health Deep Dive

Don't just ask about the company's strategy - ask about their cash position, debt covenants, runway. How are they really funded for the next 18-24 months? What happens if market conditions worsen?

Executives might accept roles only to find themselves managing severe cost cuts or even bankruptcy proceedings within months. Ask to see recent board materials, understand the real financial pressures, and know the contingency plans.

Cultural Red Flags in Stressed Organizations

Companies under pressure often develop toxic dynamics. How is leadership really functioning? Are decisions being made collaboratively or is there a blame culture? How many senior leaders have left in the past year, and why?

Pay attention to how they treat you during the process - if they're disorganized or change decisions frequently, that may be how they operate internally.

Strategic Role vs. Scapegoat Positioning

Be clear about whether you're being hired to fix problems or potentially be blamed for them. Sometimes accepting a "turnaround" role where you might become the scapegoat can be the right strategic move - if you're making that decision with full awareness.

Ask yourself: Are the challenges you're inheriting solvable with the resources and authority you'll actually have? If you suspect you might be set up as the fall guy, are you comfortable with that risk given the compensation, exit terms, and potential upside?

The Informed Risk Decision

Sometimes the best opportunities come disguised as potential career suicide missions. If you're considering a role where failure is a real possibility, make sure you're getting appropriate compensation for the risk level, strong severance/exit protection, a clear understanding of what "success" looks like and board support for the tough decisions you'll need to make.

The worst scenario is accepting a scapegoat role without realizing it. The best scenario might be accepting one knowingly, thriving in it and turning it into a career-defining success.

The Exit Scenario Conversation

This might feel awkward, but understand the severance terms, change of control provisions, and what happens if things don't work out. In volatile times, even good executives sometimes find themselves in impossible situations through no fault of their own.

What are the terms if the company is acquired, sold, or restructured? How is success measured, and what happens if external factors make those metrics unrealistic?

Essential Questions You Should Ask

• "How does the board really function, and what's their involvement in day-to-day operations?"

• "What keeps the CEO awake at night?"

• "If you could change three things about how this company operates, what would they be?"

• "What would cause you to regret hiring me?"

The Reference Check You Should Do

Don't just provide references - ask for them. Request to speak with current board members, recent hires who joined in similar circumstances, or even executives who left recently (if possible). Their perspectives can be illuminating.

The Market Reality

In this environment, companies desperate for leadership sometimes oversell opportunities or understate challenges. The best executives are asking harder questions and walking away from situations that seem problematic.

Conversely, companies that are transparent about their challenges, clear about expectations, and realistic about what they're offering tend to attract stronger candidates who are genuinely committed to the situation and know what they're signing up for.

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ABOUT THE AUTHOR

• Marion Heil is the founder and managing director of Board+CEO Advisors. She is based in Vienna.