The Week in Ethics: Yahoo’s Challenge to Rebuild Trust

Forbes.com use of Yahoo logo

Update: A May 18, 2012 New York Times article provides background on Yahoo board members’ deliberations and Thompson’s  ongoing failure to take responsibility for the resume lie.

Update: May 13, 2012: Yahoo announced today effective immediately CEO Scott Thompson is replaced by interim CEO Ross Levinsohn.  Yahoo also said it had reached an agreement with Three Points over its pending proxy contest. Daniel Loeb, of Three Points — who exposed the misstatement in Thompson’s resume — will join Yahoo’s board May 16 as part of board changes. Yahoo’s release didn’t discuss reasons for Thompson’s departure or reaffirm commitment to its corporate values or ethical behavior.

On May 7, 2012 Scott ThompsonYahoo CEO since January 2012, sent a letter to employees apologizing for the problems surrounding an error in his resume that indicates he has a computer science degree he doesn’t have.

The resume inaccuracy was discovered by Yahoo investor Daniel Loeb who has called on the board to fire Thompson.

Yahoo’s corporate values provide some guidance in the company’s current crisis. Yet another reminder that values, if followed and integrated into the culture of how a company does business, inhibit the potential for crises.

However, once a crisis unfolds, adhering to values can also mitigate a crisis — something Thompson hasn’t done, to the detriment of his rebuilding trust.

“Excellence” tops the list of Yahoo’s six core values and is defined as “winning with integrity.” In a list of What we don’t value, Yahoo’s website includes “head in the sand” and “missing the boat” — pretty apt descriptions for how Thompson has handled this so far.

Thompson’s bios have included the computer science degree, listed for years on websites where he has worked; although he indicated he never noticed the error. At Yahoo, he signed a regulatory filing that included the erroneous degree as part of his bio, raising questions at a minimum of how carefully he read the filing.

The fallout is substantial. Excellence wasn’t part of board due diligence; Thompson’s resume discrepancy wasn’t caught. Patti S. Harris, the search committee chair, won’t run for board re-election.  The controversy stirs up again the bad press Yahoo experienced in the exit of its last CEO, Carol Bartz.

Yahoo announced this week that a special three-person committee of the board is investigating  the resume discrepancy and will make the results public to shareholders.

If there is some mitigating factor that allows Thompson to keep his job, he and the board have a Herculean task ahead — how to re-establish trust especially if others have been fired at Yahoo for providing misstatements on critical documents.

Thompson failed to lead by example. As CEO, he is expected to foster employees’ commitment to excellence, one of the drivers to enable Yahoo to meet the business challenges ahead. He didn’t address the resume discrepancy head on in his employee letter this week; the apology was more about the distraction, not the issue itself.

One way Thompson can begin to rebuild trust is to start now — without knowing if he can keep his job– by putting the company ahead of himself.

What if he told the board he understood the very difficult position in which he’d inadvertently put Yahoo? What if he said that while he believed the investigation would exonerate him, his leadership was compromised until the investigation was completed. Therefore, in Yahoo’s best interest, he was volunteering to go on unpaid leave for the next few weeks until the investigation concluded.

It would require a different letter to employees: one in which what matters most is Yahoo’s pursuit of excellence from its leaders and employees.

Often in beleaguered companies we see the opposite; the leader toughing it out, people saving face, and the consequence to the company and its culture overridden.

Yahoo is facing a crucible — just how important is excellence and winning with integrity?

Gael O’Brien       May 10, 2012

The Week in Ethics

Gael O’Brien is also a columnist for Business Ethics Magazine. Her May column is about corporate culture and bullying.

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3 Comments on “The Week in Ethics: Yahoo’s Challenge to Rebuild Trust”

  1. Janey Roeder Says:

    Great article, Gael. I hope Scott Thompson reads it. He would take a giant step toward earning back the trust of his followers by following your excellent “what if” solutions.


  2. [...] Gael O’Brien The Week in Ethics: Columns on Ethics, Leadership and Life « The Week in Ethics: Yahoo’s Challenge to Rebuild Trust [...]


  3. Thats a shame, hope that they can straighten that out because I really enjoy using yahoo and a scandal like this isn’t good for any big company.

    Why dont they just send him to college to get the degree like they did with Billy in Billy Madison?


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