It has been discovered that recently appointed Yahoo! CEO Scott Thompson lied about his educational background on his resume. The Yahoo! Board Member who vetted Thompson has since decided not to stand for re-election to the Board, while Thompson has refused to leave amid calls for his resignation. Thompson is arguing that this is a minor white lie. Legally, it borders on egregious fraud. Ethically, it goes against the values of the company he publically represents.
CEOs of publicly held companies are held to a higher standard than those in the private sector. As the CEO of a company that directly utilizes the money of the public-at-large, this “little white lie” is a possible SEC violation. The fact that Yahoo included Thompson’s false educational background in its recent filings with the SEC technically could be a violation of criminal law. While it is highly unlikely that the SEC will pursue action against Yahoo! for this false inclusion, it should cause doubts in the minds on investors and shareholders regarding Thompson’s ethics.
Wall Street is already sending a message to Yahoo!. Since the scandal began on May 3, Yahoo shares have fallen 3.4% since the resume scandal surfaced.
The big question at Yahoo’s headquarters is should the Board remove Thompson. If they keep Thompson on board, they’re essentially saying “Our CEO lied on his résumé, and we’re OK with that.” Yahoo’s own corporate code of ethics mandates that all public disclosures — whether to the SEC or not — “must be full, fair, accurate, timely, and understandable.” Several shareholders have publicly called for the removal of Thompson, which he is selfishly resisting.
Many Shareholders have been clear that they want Thompson out. What about the Stakeholders of Yahoo!, its employees? Chances are if any Yahoo! employee was caught lying on their resume, they would be terminated immediately. What message is the Board of Yahoo! sending to it’s rank and file employees, by not removing Thompson with the same swiftness they would face?
The real issue is the dishonesty and selfishness, two traits of terrible leadership, which rub against the values Yahoo! once lived by. If Thompson is seemingly willing to carry on an apparently insignificant fabrication about his undergraduate education for years, what else is he willing to be dishonest about?
The Yahoo! value statement reads “Our values shape the culture and define the character of our company. They are at the heart of who we are and what we do”. Values aren’t something to look toward when times are good, they should be a beacon, providing direction, when times are bad. Ultimately, will Yahoo! live by the values it wrote in its value statement or were they hyperbole written on a page?