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Background Checks Not Always Standard Practice at Some Top Business Schools

The process top business schools use to screen candidates is coming under greater scrutiny in the wake of the revelation that an MBA student was admitted to Stanford Graduate School of Business (GSB) after having been expelled by Harvard Law School for falsifying his transcript. A Wall Street Journal article this week reveals that while thorough background checks have become more the norm at top business schools in the past decade, not all schools have a formal process in place.

This newfound focus on what protocols MBA admissions offices use to verify information on candidates’ applications comes amid the trial of Mathew Martoma for alleged insider trading at SAC Capital. Martoma, it turns out, was admitted to Stanford’s MBA program not long after being expelled from Harvard Law School for falsifying his transcript to try to obtain a judicial clerkship. He graduated from Stanford in 2003 and joined SAC in 2006.

Today, Martoma would have had a much more difficult time gaining admission to Stanford, according to the school’s current head of admissions. “Expulsion from another institution due to fraud, if it were disclosed or known, would create a serious impediment to admission,” Derrick Bolton, Stanford GSB assistant dean for admissions, told the Journal.

According to the Journal report, Stanford instituted rigorous background checks within the past decade, and all students now go through a series of verification tests before being admitted. The school works with investigation firms Kroll Inc. and Re Vera Services LLC and conducts in-house investigations to confirm elements of candidates’ applications, such as employment, education and even anecdotes from essays, Bolton told the Journal.

The hardest aspects of an application to deal with, though, are those elements that are omitted – as Martoma’s expulsion from Harvard was. But just last year, Stanford rescinded offers to two candidates precisely because they omitted details about prior graduate school studies.

Bolton told the Journal that both candidates had, in fact, graduated from their respective institutions with good grades, but on their Stanford applications they said they were working or otherwise occupied during the time they were actually enrolled. “There was no issue had it been disclosed. The issue was the deception,” Bolton said. He added that Stanford typically rescinds offers to between one and three students out of its class of 400 each year based in part on these application verification tests.

In surveying other schools, though, the Journal found that applicant screening was much less rigorous at some top MBA programs. Caroline Diarte Edwards, admissions director at INSEAD until April 2012, told the Journal that the school had no official policy for vetting applicants when she was there, though the admissions team might sometimes Google a candidate or verify that a reference letter was legit.

Pejay Belland, INSEAD’s current director of marketing and financial aid for degree programs, confirmed that the school doesn’t have a systematic process for verifying every element of candidates’ applications. She did tell the Journal that the school plans to incorporate more screening steps in coming months.

Columbia Business School (CBS), on the other hand, employs a comprehensive vetting process for every student who ultimately enrolls, Michael Malone, associate dean for MBA programs, told the Journal. CBS works with Re Vera, one of the same firms Stanford GSB uses, for this process.

The University of Pennsylvania’s Wharton School, for its part, contracted with ADP Screening & Selection Services in 2002 to vet applications and expelled a student in March 2002 when it discovered misleading information and forgery in an application, according to BusinessWeek reports at the time. Current Wharton representatives, when asked for comment by the Journal, would say only that its processes today are similar to those at peer institutions.

Read the complete Wall Street Journal article for more on current vetting processes at top MBA programs.