Startups are built on speed. But speed without verification is usually where governance failures start, and when those failures show up, the cost is never small.
The trust deficit in Indian business isn’t really a perception problem. It’s a process problem, and it almost always starts with people.
The Senior Hire Blind Spot
When a company needs a CFO, a Chief Revenue Officer or an independent director, the process usually runs on referrals, polished CVs and a good interview. What it almost never turns up are directorships in struck off or shell companies, past regulatory action, litigation history, gaps between a candidate’s stated career and their actual one, or conflicts of interest with vendors and competitors.
We recently ran a Senior Management Due Diligence engagement for one of the most recognisable names in global consulting, which was fast tracking a CXO hire. The initial checks came back clean, and the firm was ready to send the offer letter. A deeper Level 2 investigation told a different story: a web of vendor kickbacks, payments routed through hidden accounts, luxury gifts used as liquid assets, and a PAN linked address quietly transferred to a politically influential figure just a year earlier. None of it had shown up in the standard checks. The firm withdrew the offer.
In a separate engagement, a manufacturing MNC asked us to run SMDD on several C-suite candidates before finalising its decisions. Our platform flagged all three within minutes, each carrying allegations of bribing government officials that had never surfaced in the standard shortlisting process. One hire that had looked like a formality did not go through.
We see this often enough that it stops feeling like an anomaly. It is simply what turns up when someone actually looks properly.
It’s worth saying what a rigorous SMDD report actually looks like. A good one documents verified findings across litigation, adverse media, regulatory exposure and conflict of interest indicators, but it also records what could not be independently confirmed. In one recent engagement, sources raised concerns about a candidate’s management style. The report set out the allegations clearly, but also noted that no formal disciplinary action or documentary evidence existed to back them up. That line between a verified risk and an unverified allegation is what turns intelligence into something a client can actually act on, rather than just rumour.
Automated due diligence, drawing on MCA and ROC databases, court records across thousands of tribunals, sanctions lists, adverse media and professional history checks, puts this kind of scrutiny within reach even for early stage companies. Work that used to take weeks now takes minutes.
The Moonlighting Problem Nobody Fully Solved
When moonlighting became a public talking point after the pandemic, most of the conversation was about productivity. That was the wrong thing to focus on.
The real risk with undisclosed parallel employment isn’t divided hours. It’s divided loyalty, and often, IP leakage, conflicts of interest and regulatory exposure alongside it.
We ran a post exit investigation for a Singapore based technology firm whose senior IT manager had abruptly disappeared. The standard checks looked normal at first. A UAN verification showed he had been moonlighting at another firm on night shifts while still drawing a salary from his employer. Further digging identified the company he had joined, the branch and the HR contact. He had also kept the company laptop and drawn a salary advance running into seven figures. Armed with this, the client contacted his new employer, who let him go immediately.
A UAN cross-check and a DIN linked directorship check at the point of onboarding would have caught this before it became a crisis. Periodic verification audits, run as a routine process rather than triggered by an HR investigation, let companies pick up new conflicts as they emerge without turning the workplace into one of constant surveillance.
That distinction matters. Verification isn’t suspicion. It’s what genuine trust is actually built on.
Transparency as Competitive Advantage
The companies that earn institutional trust fastest aren’t always the ones moving fastest. They’re the ones that build verification into how they work, in hiring, in partnerships, in governance.
SEBI’s October 2024 circular on diligence requirements for AIF investors is a sign of where regulatory expectations are heading. Automated due diligence isn’t optional infrastructure any more for businesses that want to build something that lasts.
The question isn’t whether to verify. It’s whether you do it before the problem shows up, or after.
Authored by Karan Bhatty, Founder & CEO, Millow