"We will definitely contact references," including candidates' supervisors, peers, and subordinates, says Clayton. "And we will, if appropriate, also check public records for civil and criminal litigation [with the client's and the candidate's knowledge]."

Hofman notes that the Internet has made this easier, especially for smaller companies without any human resource personnel. "Companies are getting much more aggressive about doing a background check, checking the legal database, and seeing if the person has been involved in any big lawsuits," he says.

The best thing to do is compare the reference list against the résumé, looking for omissions, and whenever you speak to a listed reference, ask them if someone else at the company might be able to offer additional insight.

During the interview, use ethics-based and self-descriptive questions to get to the character issue. Adrian Gostic, head of marketing for O.C. Tanner, an employee recognition company that recently won a national award for its ethical practices, coauthored the book The Integrity Advantage. His favorite question is, "Tell us about a time when you were asked to compromise your ethics." This can yield very informative answers, and "if they have trouble answering," says Tanner, "it's a red flag, because at the very least it means they've never given any thought to the ethics issue."

Clayton recommends these self-descriptive questions:

Take me behind the decisions for your career moves.

Who is the best CEO you have ever worked for and why?

Describe yourself. With this one Clayton cautions, "If the candidate sprinkles the conversation with how honest they are, beware. Generally, people who are honest don't talk about it repeatedly."