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Business Schools Are Beefing Up Their Screening Processes


Imagine you are the dean of a leading business school. One morning, you read a story about a widespread financial scandal. The perpetrator’s callousness and greed just sickens you. But then you hit a sentence that knocks the air right out of you.

That lawbreaker graduated from your program a decade ago.  

As a dean, this is one of your worst nightmares. And it requires a pause for some soul-searching.  You’ll ask, “What did we do wrong?” “What could we have missed?”  Deep inside, you know there was little you could have done. MBA students arrive on campus as adults. You can’t instill character, courage, or compassion by then. No matter, the damage is done. In a post-meltdown world, your alumni are a reflection of your program. When they misbehave, they become an indictment of it.

That’s the story behind Matthew Martoma, a Stanford MBA who’d previously been expelled from Harvard Law. This week, Martoma is on trial for insider trading at SAC Capital Advisors. And the press and alumni are wondering, “Why didn’t Stanford know that Martoma was a bad apple?”

Alas, it’s easy to criticize in hindsight. No doubt, Stanford would’ve denied admission to Martoma if they’d known he’d falsified his Harvard transcripts. Very likely, a background check (or even a Google search) would’ve raised red flags on his Stanford application. Chances are, there are other time bombs like Matthew Martomas, whose dubious backgrounds and ethics will inevitable cause embarrassment for their alma maters. And why not? As history shows, most scandals stem from failures of imagination and due diligence as much as gluttony and hubris.

So what are business schools doing to prevent similar incidents? This week, The Wall Street Journal contacted many of the leading business schools to learn how they screen potential students. Here is what they found:

Stanford: According to The Wall Street Journal, “Stanford instituted rigorous background checks within the past decade [under Derrick Bolton, Assistant Dean of MBA Admissions] and after Martoma was admitted.” The Journal also reports that Stanford “has worked with investigation firms Kroll Inc. and Re Vera Services LLC, and conducts in-house investigations to confirm elements of applications.” It adds that all accepted applicants “accepted go through some series of verification tests such as confirmation of their employment, education and even anecdotes from essays.”

Does it work? Stanford typically withdraws 1-3 offers to students each year based on their screening. For example, Bolton noted that two candidates had offers rescinded for failing to disclose that they’d previously taken graduate school classes.

Insead: Conversely, Insead “doesn’t vet every element of the application systematically,” preferring to investigate further when “there appear to be discrepancies” in the words of Pejay Belland, Insead’s Director of Marketing and Financial Aid for Degree Programs. Belland adds that Insead is planning to implement additional screening steps in the future.

Columbia: Like Stanford, Columbia also conducts comprehensive background checks through Re Vera, according to Michael Malone, Associate Dean of MBA Programs. He adds that the process has uncovered some inconsistencies in applications.

Wharton: Wharton began partnering with ADP Screening and Selection Services in 2002 to scrutinize candidates. It is unclear whether they still work together, though Wharton noted that their vetting process is “similar to those at peer institutions” according to The Journal.

NYU: Stern pays particular attention to professional licenses after nearly admitting a physician with a “pretty scandalous past” to its executive MBA program years ago. A Stern representative also shared with The Journal that it “independently verifies certain data.”

For additional coverage of this topic, check out MBA Admits Facing Background Checks.

Source: The Wall Street Journal

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