Introduction
Directorship verification is crucial for every industry to protect the organization from external threats. Starting a business while working as an employee in an organization is not a bad idea; the problem arises when people use their employer’s data or finances for their own benefit. Directorship checks in India for corporate industries are vital, as we can see some famous past directorship cases, such as the Chanda Kochhar Case and the Rajeev Saumitra vs. Neetu Singh Case. There are multiple aspects on which any background verification company works while verifying directorship, which include considerable directorship issues and financial fraud risks.
Most organizations do not even opt for directorship verification because they think it’s a waste of time and company cost, which it is not. If an employee who is already a director of a company handles financial records of their current employer, they can use the financial records for their own benefit. Directorship verification process: 5 significant points to filter out black sheep of the family, which include current and past directorship, DIN (Directorship Identity Number), multiple directorship records, and disqualification of directorship.
Here, we understand how industries can protect themselves from external risks by following mandatory compliance policies.
Why is the directorship check in India important?
Different organizations tie up with each other to achieve business purposes, such as business partners, vendors, or founders, and when an organization works with another corporate entity, then document verification is vital. There is a possibility that a particular individual has a record of multiple directorships for different companies. At Verification Street, the directorship verification process is easy and hassle-free with low cost, which is nothing in comparison to healthy compliance regulation practices.
India is a developing country where people find out different ways of earning money from various channels, which is the reason employees get caught working with different companies, but people who work as a director for their own organization, while still working as an employee for other companies, can have untold, uncanny intentions.
Why does employee directorship verification matter for the employer?
For the employer, it is not a big deal, but the problem arises when a person does unethical practices with the company’s data. If an organization hires a person for a vital role such as CXO, accountant, or managing director, then directorship verification is required. Hiring an experienced person in a trustworthy position is a big deal for any organization, and every organization wants to employ responsible employees. It is possible that the hired candidate is affiliated with the Ministry of Corporate Affairs and is working as a director for any organization by using their current employer’s data for personal use.
To protect business confidential data and process information from external threats, any organization needs to hire after proper directorship verification of upper-level employees, because it is possible that a candidate can use the employer’s data and information for personal use. Director background verification is sometimes an option employers avoid because they think it is unethical and a violation of professional privacy, but organizations can process directorship verification on their employees after obtaining consent from them, which is a mandatory process for any verification check.
How does Verification Street process directorship checks for safe hiring practices?
As a third-party verification company, Verification Street needs some mandatory details, such as name and DOB. There is no need for any directorship verification document, but some general information is enough to process this verification. There are multiple automated and AI-integrated portals for government official sites that Verification Street uses to verify directorship records.
Conclusion
Directorship check in India is the most vital background verification process for any business entity. Whether you are associated with vendors or higher-level employees, the organization needs to verify all the information related to that business entity to safeguard the company’s future.
FAQ
Why is a directorship check in an Indian corporation necessary??
Ans. To detect and filter harmful elements that can be a risk to the company. An applicant can be working as a director for one company as well as working as an employee for another organization by using your organizational data for others’ benefits, which can cause future risk for your organization.
How does any third-party verification company verify directorship??
Ans. Every third-party verification company has its own verification process to follow, but the general verification process involves collecting mandatory details (legal name, DOB, email ID, and phone number) and then passing all those details to the verification team.
Is directorship verification a time-consuming process?
Ans. No, this is the easiest and least time-consuming document verification process. Directorship check for legal compliance, which is vital because we don’t know if a person is working as a director or not, and for how many companies they are working as a director.
Is director background verification vital for all corporate positions?
Ans. No, it is only mandatory for those employees who are working in a liable position, such as Director, Senior Manager, Managing Director, HR Head, Financial Head, or a person who is handling confidential data of the organization. Employees who are working in junior positions, such as executive or associate, can avoid this verification process.
