Warren Buffett Says Integrity Is the Most Important Trait to Hire For. Ask These 12 Questions to Find It

12 questions to ask when interviewing and hiring for integrity.

Practically speaking, assessing integrity is really about asking the right questions that will get to the core of a person's character (in addition to standard tests/assessments, "job auditions," and role-play exercises). But first, whomever is on the interviewer's seat must be skilled in the science of behavioral interviewing. Here are twelve questions I have used in the past:

1. Tell me about a time when you experienced a loss for doing what is right. How did you
react? 

2. Tell about a time when your trustworthiness was challenged.  How did you react/respond?

3. Tell about a specific time when you had to handle a tough problem which challenged fairness or ethnical issues. 

4. When was the last time you "broke the rules"? What was the situation and what did you do?

5. What would you do if you suspected that an employee was stealing?

6. Describe a situation where you saw an employee or co‐worker do something you thought was inappropriate. What did you do?

7. Think of a situation where you distrusted a co-worker/supervisor, resulting in tension between you. What steps did you take to improve the relationship. 

8. When working with people, in general, describe your preferred relationship with them. (this question is used to assess honesty and the capacity for open communication.)

9. What values do you appreciate the most in a team environment? [you're looking for things like honesty, fairness, openness, transparency, and inclusiveness in your answers.)

10. If we ever got into a bind with a client, would you be willing to tell a little white lie to help us out?

11. What would your current/past manager say makes you most valuable to them? (Besides intelligence, energy or technical and hard skills, listen for clues that point to integrity.)

12. What are the characteristics exhibited by the best boss you have ever had, or wished that you have had? (A person of integrity will mirror those they follow or look up to, so listen for clues.]

Remember: No integrity = no trust. Your hiring team must ensure that, no matter how talented, experienced, and smart job candidates are, they will protect your company, your employees, and your customers by hiring people every person can trust.

Integrity, intelligence, and energy = a great hire.

VOLATILITY at Work

The stock market as measured by the Dow Jones Industrial Average fell 1,175 points on Monday, 5 Feb 2018. That was the largest one-day point drop in history.

Still, the decline was relatively tame when measured in percentage terms. The Dow Jones fell 4.6% on the day, a significant loss, but far from the 22% one-day drop on Oct. 19, 1987, and the 24% two-day drop on Oct. 28-29, 1929.

Monday was a bad day for stock investors, but the market bounced back on Tuesday to some extent. It was not the end of the world.

Yet, investors should not take too much comfort from the single-digit percentage drop on Monday and the bounce-back on Tuesday. Markets came much closer to a catastrophic meltdown than many investors realize.

The reason for the near catastrophe was the same as the reason for actual catastrophic losses in 1987, 1998 and 2008 – derivatives, leverage and opaque financial structures.

While stocks were down 4.6% on Monday, the leading measure of volatility, the CBOE Volatility Index (VIX) rose 116% on the trading day. And, an even more obscure exchange traded note (ETN) called the “Daily Inverse Vix” (XIV) fell almost 80% in the two hours after trading ended.

VIX does not necessarily trade in a linear way relative to underlying stocks. While stocks fell 4.6% on Monday, VIX rose 116%. This was indicative of the fact that traders see the stock market fall as the end of an extraordinarily long period of low volatility.

The VIX was trading on an historically low baseline. The rise in VIX reflected not only Monday’s volatility, but also an expectation that higher volatility is here to stay at least for a while.

XIV is an even stranger animal. It is a note that pays the holder a return based on the inverse of VIX. If VIX drops, the XIV note holder earns a higher return. If VIX rises, the XIV note holder suffers a loss. That much is clear. What is not as clear is why a 116% rise in VIX led to an 80% drop in XIV.