When former finance director Sharon Bridgewater was sentenced to five years in jail in October for stealing £2m from her employers, one of the biggest shocks was that she had managed to cover up her criminal past to get the job.

Her employers may have been kicking themselves for failing to check her background thoroughly enough before appointing her, but at such a senior level, how deep do companies need to delve?

Toby Starr, partner at City law firm Starr & Partners, says: "They certainly have to be aware of the possibility that the person they are considering may not be everything they say they are. In the last few years alone, we have seen eight or nine cases where employees, either working by themselves or with someone on the outside, have stolen from the company."

His advice to recruiters, even when appointing at senior level, is to thoroughly check backgrounds.
"You can pay for CV and reference checking services," he adds. "But there is a lot that a company can do itself, for example, searching Companies House for details of previous directorships, failed businesses, or director disqualifications. The information is quite readily available."

In the event that an undesirable recruit does slip under the radar, Starr also advocates the inclusion of an opt-out clause, enabling an employer to terminate the contract should it become apparent that they have lied or misled the company to get the job.

Frances Wilson, human resources adviser at the Chartered Institute of Personnel and Development, says employers are aware of the need to be more vigilant, but at senior level there is still a strong element of trust. "Headhunters operating in senior circles spend a lot of time talking to people in the industry, and are ideally placed to uncover anything untoward," she says. "At the highest level, any skeletons are likely to be out of the cupboard."

The proliferation of social networks such as Facebook and MySpace has given employers greater scope to explore individuals' backgrounds. According to Starr, one recruiter, hiring for a specific and highly lucrative business deal, Googled a candidate to reveal a string of fraudulent activities.

But this is hardly scientific, and Malcolm Webb, sales and marketing director at Bristol-based mailing company DSTi Output, believes that companies should not be taking any chances when hiring staff.
He says: "The costs and the impact on the business, when it goes wrong, are immense. Our policy is to check all references, going back to the last employer and even the employer before that, to ensure that everything tallies with what appears on the CV."

But he agrees that employers do need to be mindful of eroding a much-needed sense of trust between themselves and their staff.
"As long as you are consistent with your checking and make it clear from the outset that it is company policy, you are less likely to attract dishonest people in the first place," he says.