Reputational Due Diligence with Lyndee Fletcher

This is Risky Women Radio, a show that connects, celebrates and champions women in risk regulation and compliance. We’re here to share the insights on the biggest issues in our industry and hear inspiring journeys from our global members. Sign up to our newsletter at riskywomen.org. I’m Kimberley Cole, your Chief Risky Woman. Welcome to Risky Women Radio. Today's risky woman is Lyndee

Fletcher, the CEO of Vcheck. And before I jump in and introduce Lyndee, first I'd like to have you all do a couple of things for Risky Women. So can you all sign up for and follow Risky Women on all of our social channels, so Instagram, X, join the LinkedIn group. And also make sure you go to the risky women website riskywomen.org and sign up for the ROA newsletter so that you don't miss anything that's going on, including when

the latest risky women radio podcast is released. We've been really busy at Risky Women as well with added Rev-up sessions to our repertoire. So we aim to have at least one Rev-up session per month. And for members these sessions are part of your membership. So risky women has many different elements from live events to podcasts and our Rev-up sessions are aimed to build on your already amazing superpowers. So far, we've had rev up sessions that have included media training by Chris

Dobson. We've had voice and gravitas with the amazing David Pope, storytelling with Sundari Mukherjee. We then covered how to write a book with the fabulous Jennifer Geary and negotiating for more by Black Isle dynamo Heather Lindhardt and there's plenty more to come. So watch out for all of those on the way. But without further ado, let's get into our hot topic for the day on the future of reputational due diligence.

So we have Lyndee Fletcher joining us who has over eight years of experience in the public record and reputational due diligence industry. Since joining Vcheck in 2016, as the sixth employee, she has been integral to Vcheck' operations and technology evolution enabling Vcheck to grow, wait for it, 2,500%. I had to check that thinking is that an error

there? Lyndee is passionate about transforming the speed, quality and process in which companies mitigate risks by embracing a human led technology enabled approach to diligence. So I'm super excited to get into the future of reputational due diligence. But before we do that, I want to hear more about your career journey Lyndee, so tell us your story and how you got to where you are now. Absolutely. Thanks, Kimberley, for having me. I'm excited to be

here. So I was actually a production and journalism major. I started my career at a production company in LA. But I took a really hard left after a year in the production space, and joined Vcheck. And I joined as a Marketing Associate. As you mentioned, I was the sixth hire, and I was assisting the head of sales at the time because we didn't really have a marketing team. But shortly after I joined, we started to grow quite rapidly. And we were really old school doing everything on

paper. And it became obvious that we needed to digitize our processes, because we're having issues with clients and our operations. So less than a year at Vcheck, I put together this proposal of streamlining our workflows, and they said fabulous, but we don't have anyone to run that. So that is

now your job. So that was my segue way into operations. I started getting really involved with our investigations teams, how they worked, what they were doing, and a lot of the redundancies and inefficiencies not just to Vcheck, but the industry as a whole and started to get this vision of what this could really become. And then you know, as we continued to grow as a company, I was eventually promoted to COO and then last January, I was promoted to President.

That's amazing. And just shows how if you can identify how to improve and change things and transform the opportunities that leads to. So now your CEO, so tell us more. What are your key responsibilities in that role? Yeah. So you know, I think really the core thing in a president or CEO role is you're setting the strategic vision,

but you're really enabling your people. We have such a talented team at Vcheck and I fully subscribe to the philosophy that a leader doesn't build a business, a leader builds a team that builds a business. That's really what you have to do and a CEO or president title. And I'm, I'm lucky to have such an amazing team to be able to do it with.

That's really interesting. I remember reading a great article on the lady that runs the Rosewood Hotels, and she did not have a hotel background at all, she had no history in that space or no experience. But her entire plan was bring in all of those fabulous people around you who do know how to do that. And she's been incredibly successful. Absolutely, you have to bring in people who are going to make up for your weaknesses and be able to capitalize on your strengths.

So it's always a team effort. And so when you're thinking about your role, how do you create impact, you've said, obviously, by building the right team, but other elements in the role as well? I do think a lot of it is team building and talent recognition and promotion. I think another thing that I've really learned over the course of the last few years is making sure that you're painting a clear vision for where you are trying to go.

There are so many teams that have misalignment, because if you asked everyone what we're trying to be next year or three years, there might be a different answer. So I think that consistent communication, and course correction of setting the vision of what we are trying to accomplish is really what you

have to do as a leader. And you know, recognize when people need help recognize the strengths and others try to emphasize them, capitalize them on when you see someone struggling, not shame them, but to give them better support to compensate for those weaknesses, because we all have them. Yeah, very true. And so when you thinking about, I guess the business or even more broadly, what are you most passionate about?

So I'm most passionate about creating efficiencies. And I say that a little bit of a giggle, because it might sound simplistic or not super exciting to be passionate about. But if you look at the majority of successful companies that have been created over the past few decades, they often did not create an entirely new invention, but an easier way to accomplish something right? So like Uber, ____, Airbnb, Amazon,

etc. They all made an existing processes better. And that is something that I found really great passion for when I moved into operations. Yeah, that's so true. I do think it's often the smallest thing that can create a really big difference. So that's really interesting. And obviously, you've had a really interesting career, and maybe you've covered this, but what would you say is the biggest risk that you've taken in your career? And did it

pay off? And maybe it is that first when you said, I was studying this, but then I did a big leftward step or left turn, as you said! Yeah, yeah. I think you're right. I think probably my biggest risk was joining Vcheck, I felt really silly at the time of running away from what I majored in, just switch industries so quickly. And I think there's a lot of pressure when people are graduating to stick to that thing, even if you

get in it and realize you don't like it. So I think that was a huge debate for me, especially joining a company that was so small, here's five people, you know, at this company, but the owners of Vcheck at the time, were these four entrepreneurs, they had been successful in financial services before, and kind of sold me the moon of Yeah, will promote you based on what you've accomplished, not your tenure, if you want to grow is the place for you. So I was like, You know what, let's,

let's take a chance on it. And it's been the best decision I've made. Yeah, I was gonna say it looks like it's definitely paid off. And they were true to their word in terms of you had that vision. You had those ideas, and you've been empowered to execute on those. Absolutely. And what do you think has been the best piece of advice that you've ever received? I think, I think to bet on yourself. You know, it's human nature to avoid risk and to a certain degree, that's always a

good thing. But it's very easy, I think, especially as women, to let imposter syndrome keep us from ever stepping up to the plate. And if you're gonna bet on anything bet on yourself, and I remember someone told me that very early on in my career, and I was like, You know what, that is great advice because you can control the course of what you do and your actions you can't control anyone else.

I love that. That's yeah, that's really good. And so who are some of the role models that you've been inspired by? Sara Blakely is a big one, the founder of Spanx. She was a perfect example of betting on yourself. She has an incredible story. Highly recommend anyone that has not looked into her to do so she's amazing. Another one that pops up to my head is Claire Hughes Johnson who was the former COO of stripe. She joined Stripe when they were 200 employees led them until there

were like 8000. But she is just such a brilliant tactical leader that has really wonderful, organized operational framework that she implements across organizations. I really love her book Scaling People, it's probably my number one business book I would give to someone that was in operations. So I think those are the two that I kind of keep coming back to and admire. Oh, that's always one of the questions that we ask in our

wrap up is for a book, so maybe we get an extra bonus one. And then another one of my favorite questions is if you were ruler of the world for the day, what would you change? Oh, I feel like there's a bit too much to change right now. Gosh, how long is this podcast? I have a list of quite a few

things. To keep something that's relatively on topic, I think that there needs to be more organizations that are trying to have a positive impact on the world or their passion or their project where government spends money incredibly inefficiently. Nonprofits can only be funded to a certain extent. And I think the more for profit organizations can lean into causes they care about and implement positive change, the better society will become because there's so much cash

flow coming through them. So I think something around that I think would be be a really great thing to change about the way our worlds works. Yeah, profit with purpose. Exactly. Yeah, absolutely. I think that's a great call out. Okay, let's take a quick break. And we'll come back to the future of reputational due diligence. This episode was brought to you by Vcheck. Established in 2012.

Vcheck is a global leader in due diligence and background investigations, providing accurate, timely and insightful information to clients worldwide. Through a combination of human led research and advanced technology, Vcheck offers customized solutions that meet the unique needs of each client, mitigating risk and protecting their financial and reputational interests.

Okay, Lyndee, now to your key specialist area here we have the future of reputational due diligence. So maybe let's just start with what is reputational due diligence?

Reputational due diligence consists of two core components, one being open source intelligence, which is also known as public record due diligence, which means what's publicly available, whether that's in the news, social media, court records, etc. And the second piece is human intelligence, meaning nonpublic information from sources like interviews, reference checks, etc. So those are kind of the

two core components. Those are mixed in various ways to create scopes based on the end use case of what you're trying to accomplish, look into and also where you're conducting diligence around the world. Right. That's a good little summary for everybody on the podcast. And what's commonly misunderstood about the space? People often confuse reputational due diligence or public record due diligence with basic pre employment screening checks. And they are not the same thing. Pre employment

background checks are exactly what they sound like. And they're usually very top of the waves, national criminal checks, a very check the box, cheap report. Reputational due diligence goes much deeper, they also can be performed on companies as well. So an example would be, we just did research on an oil and gas company in Libya to determine if it was owned or actively managed by the government. So that was obviously heavily human intelligence base because of

Libya, they lacked a lot of public records. And it was very interesting, because when we got into it, all of the public documentation did show that it was owned and the officers were not affiliated with the government. But once we started conducting interviews, it became clear, they were just figureheads. And they would have never won the contracts they had won without their affiliations and relationships to the

government. So there's a big difference between the two. The other two things that I think are commonly misunderstood about the space is that especially in the US, there is no way to centrally locate records. So there's not this like one database where it's like, I'm gonna do this one, check and see if anyone has any litigation outstanding or any criminal records or etc. There are over 3000 counties in the US, they all like to do things a little bit differently. And 30% of

those are not available online. So you've got to use a court runner to go get information from them. So it's quite a process to actually figure out where you need to search to be comprehensive on a person or company that you're researching. So there's a lot of process that goes into it and why companies like Vcheck exist. And then I think the last thing that's misunderstood is that it's the same process, regardless of the

use case or country. So we work with a lot of different use cases, we do a lot of m&a, supply chain diligence, board member executive placement, you know, every different use case, you have a different mix that you are focusing on between the public records due diligence and human intelligence. And it also is highly dependent on the country that you're doing

research in. And if you're in a place that has more data scarcity, you're going to have to rely more heavily on human intelligence than you could in other jurisdictions.

Very interesting. And obviously, the scope is very broad, which, as you said, maybe that's part of the misunderstanding why you would even use the services or why reputational due diligence is required. So when you think about a customers etc, you're dealing with what have been some of the key challenges recently, and the reputational due diligence space that you've had to step in, or that people are thinking about? Yeah, a really interesting one that's been popping up more and

more is identity verification and identity fraud. So we had a major tech company and the US come to us with a really interesting issue, essentially, foreign intelligence agencies had individuals that were stealing the identities of people in the US posing as them getting hired by this major company, and then hacking their systems from the inside. And they were passing these basic background checks, because they were claiming to be someone that they weren't. So everything was

coming back clear, and they were not that person. So they came to us, because we, you know, have deeper dive ways of sorting through these things and said, How would you guys solve this problem? And so we were able to implement a few things for them, which is pretty interesting. But one being actually able to verify the authenticity of an ID. So being able to scan the front and back of it, check for liveness. And then also determine where their IP addresses coming from

investigate that as well. So just last week, we had someone that scanned their driver's license, and it was claiming to be in Ohio, the photo on that license manipulated in their IP address was actually coming from China. So you know, you're seeing more and more digital fraud in the space, we also see it with our lending clients, we work with a lot of private

lenders and commercial real estate companies. And so that's kind of a really interesting one that is, I think, further emerging as you start getting into, like deep fakes, and AI, and all the things that you can now do online, that is really cool, but also enables a lot of fraudulent activity. Lots of things we can cover there. So I think we'll come on to sort of technology and AI and how that's kind of helping or

evolving the industry. So you mentioned there's several things there that are top of mind for customers just summarize a few of those for us in terms of what else, so deep fakes, you've got all of this identity fraud, are there other key themes? Yeah, I would say the other two big things that I think are really top of mind for customers right now is real time results, or is as real to real time as you can get, you know, the deal

market is moving faster and faster. Due Diligence, in general, is kind of an antiquated space, that usually takes a few weeks to accomplish. And so you're seeing that pressure for faster turnaround times, and being able to display results as they're clear, or as hits come back, which I think is really important, because they're spending money in all these other areas, you know, as they're conducting due diligence, and they need to know if there's a pencil down issue

that they they need to stop and look into further. So I think there's real time results, turnaround time is top of mind. The other thing is continuous monitoring. So historically, this has been an industry where we do point in time reports where as soon as you deliver it, the report starts aging and you don't know if the CEO that you've added for the company you're trying to acquire got a DUI the next day after you

conducted the diligence. So there's a lot of really interesting, emerging tech around continuous monitoring and thinking about ongoing risk. We are relaunching continuous monitoring product and the fall but a lot of other people have as well. And that's something that comes up more and more with our clients is how can I stay on top of this? How can I know about something as soon as that happens instead this one point in time report?

Yeah, really interesting. And can you share a few maybe use cases that might come to mind in that space? Yeah, absolutely. So I think a couple of things, the core use cases that Vcheck serves, of course, there's a lot of others and reputational risk is, we work with a lot of PE firms, when they're going to acquire a company, like a platform investment or an add on, we've got the management team, we've

got the entity. We also do a lot of commercial real estate and private lending transactions, so vetting the borrowers of a transaction to vet financial stability, and also is the collateral they're trying to put up actually clear. When we do supply chain diligence. So for crucial components of supply chain, especially overseas, you know, we come into play as part of vetting key suppliers there. And we also work with fund managers to vet funds of funds when they're considering fund

managers. And we also screen executives and board member placements as well. So there's a lot of various use cases, depending on what your end goal is. Yeah, so really broad. And how are you seeing obviously, you've transformed a lot of the way that certainly Vcheck is handling reputational due diligence. But how, how do you see it continuing to evolve and change? Yeah, I think AI is disrupting our space for sure. Like it's disrupting everything, some super positive and some

negative. And I do think the other core point is the continuous monitoring of like, there has to be this ongoing way to continually monitor the people and entities you have investment with. Yeah, you mentioned continuous monitoring being key. You know, you've touched on a couple of times AI, what do you see as the impact of technology overall, but certainly AI? Yeah, I think overall, it's definitely a positive. I think there's some startups in the space that are over indexing in

AI in a way that's cheapening the process. But on the other side, there's more traditional firms that are not enhancing their processes with AI and adding efficiencies to do a more thorough report. So I think it has to be a marrying of technology and the market with skilled investigators to create the most comprehensive solution, you really have to have both maybe five to 10 years now. But even then, I think that there still will always have to be a human component as part of the

work. But I've been really impressed with the progression of large language models and their improvement on news searches over the past year and a half, a year or two ago, there were many companies popping up, they were trying to do it and their products were just awful. But there have been some really interesting improvements that add value to the investigation process that have come up in the past year, which has been really exciting.

Excellent. Yeah, I think that keeping a human in the loop comes up and a lot of different industries in a lot of different areas, especially at the moment when we're still seeing the hallucinations of AI, that we need a check and balance there. Absolutely, absolutely. And so what excites you most about the industry? You know, I think the big thing is that there's so much room for innovation and improvement, our space is still quite antiquated.

And there are going to be huge advancements in the way that we access data and contextualize data over the next five to 10

years. And, you know, I think this is just like the start of the reputational space, I think there's so much expansion to do in the way that we evaluate risks, and put better indicators around the information we're gathering to help people make better business decisions by not just looking at that data set in the moment on those individuals you're checking, but what does it look like for the pattern of other entities and individuals

that have done similar things? And how did that turn out and really taking that kind of pre transaction information and analyzing it to post close performance. Fascinating. Okay, that sounds very, very interesting. And I guess you've sort of touched on this. But if we look forward, what do you see as the future for reputational due diligence? Yeah, absolutely. So I think like the contextualization and predictions off that data, like I just said, it's huge. There's

a lot of improvement that can be made there. And I think another area, like we talked about briefly, the identity verification is gonna be big, more and more spaces are going to start using that and incorporating it into their processes. But the thing I haven't touched on that I also think is going to be a big change in the space over the next five to 10 years is this idea of reusable credentials, or

a digital wallet on individuals. So there are consistent things that we verify over and over again, like education, employment, and income, people should be able to own their data in a verified credential that sits in the blockchain that is verified by the relevant party that they can use and share and all and with who they choose. The fact that we each time someone joins a new job or go somewhere different or applies for a new apartment, they have to recheck all of these things

is such an efficient process. That person needs to be able to own their data and firms like us can be a verifier of those credentials, which I think is where we're going to go long term. Yeah, that's very interesting with huge benefits for the individual, but also obviously, that would improve efficiencies across so many processes that we get involved in. Excellent. All right. Well, that's a really interesting journey through the future of reputational due diligence. So thank you very

much for that Lyndee before we go into our wrap up session. So let's take a quick break. I want to tell you all about our most recent initiative, which is Risky Women Write. It's our writing competition. At Risky Women we want to continue to amplify the voice of women in the industry and champion our thought leadership capability. So in partnership with Bovill Newgate, we are pleased to announce the risky women writing competition, Risky Women Write.

Given statistics from the recent women in media gender scorecard, we see that continually we are severely underrepresented in terms of media coverage as both sources and experts. Women only account for 43% of bylines written and men are generally featured disproportionately as 70% of quoted sources and 66% of experts. So we want to address this imbalance and showcase some hot topics and give you a chance to show your knowledge and the

risk and compliance arena. So go to Risky Women website at www.riskywomen.org To see all the details and get your entry in now.

Okay, so our final section here with you Lyndee is my rants and revelations. So just to wrap up the Risky Women Radio podcast. So what would you see as the top risk for the year ahead? Top risk? I do you think that the ID verification piece is going to be one of the largest changes in our space in the near future, I think that there's going to be a lot of evolution and a lot of probably legislation around it too, when we think about how we are conducting KYC on individuals

and then see and truly verifying their identity. It's such a basic process right now of lending people even for major loans, scanning their IDs on pieces of paper and like a PDF, and there's no verification of if this identity is a fraud or not. So I think that there's going to be more and more of that that comes up that's going to require a change in the space of the next year. Interesting. And are you optimistic, pessimistic or neutral in your outlook for the year ahead?

I'm optimistic, you know, at least from a business perspective, for sure. We're heavily tied to the markets. You know, it sounds like we're moving towards a cut in interest rates, which would really positively impact our lending clients. So I think we're gonna have a very strong second half, knock on wood. That's my that's my prediction. Excellent. You are on trend with other risky women in being optimistic, so that's great. And as I mentioned, we love to get

some recommendations from our risky women as well. So I'd love a book to read something to watch and or a podcast that you recommend. So you already gave us one book, which I really like any others that you want to recommend to us. Yeah, so I'll do a more fun book too as a recommendation but I just read Four Thousand Weeks: Time Management for Mortals by

Oliver Burkeman. It is a super cute book, but it's also an easy way to jumpstart you into an existential crisis so I give you that warning before you read it but I thought it was very good. It's fun quick read, so suggest that. Something to watch so I was late to the game on this, but I watched recently it's