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Yahoo’s failure to confirm new CEO’s references lands company in trouble

Image: Teerapun | FreeDigitalPhotos.net

Everyone exaggerates their accomplishments on their résumé, right? You say, “Executive Assistant,” when you really mean “Assistant to the Executive Assistant.” You say you graduated university with honours, when you mean you were on the honour roll one year in high school. You say you were involved with a hugely successful project that increased profits, improved worker productivity and reduced injuries, when you mean you were accidentally invited to a meeting where the project was discussed. You say you got a university degree that you did not.

I can’t say for sure whether all of those situations have happened, but I know that last one did, and it is big news. In its search for a new chief executive officer, Yahoo recently found out that no matter how big the company or how high the position, an organization that fails to conduct a thorough background check can find itself in a very difficult situation.

Scott Thompson took on the role of CEO at Yahoo in January, but some time between then and the beginning of May, the company discovered that his résumé didn’t accurately reflect his experience. A number of online sources—including Yahoo itself—indicated that Thompson had degrees in accounting and computer science, but the company found he did not have a degree in computer science, only accounting. Besides the ethical dilemma of how to discipline an employee who falsifies his credentials, there are other issues.

The board of directors questioned his ability to lead the company, to direct strategy and to recommend new board members. Some shareholders used the situation to push their own agendas, asking the board to fire Thompson and install their preferred candidates for CEO and the board of directors.

Upon learning of the discrepancy, Yahoo’s board immediately formed a committee to look into it, and Thompson is no longer with the company. He stepped down voluntarily, in part due to a diagnosis of cancer, but surely the pressure from all sides aided his decision.

I don’t often hear of applicants lying on résumés, so Yahoo’s case serves as a good reminder that no company—and no seniority—is safe when its practices don’t match its policies. Somewhere along the hiring line, someone failed to clarify Thompson’s education history, and Yahoo has to continue waiting to get started rebuilding the company. The company has to replace two now that the director who headed the committee that hired Thompson has stated she won’t stand for re-election.

On the other hand, the board acted quickly once it became aware of the falsehood. It formed an investigation committee, and retained lawyers specialized in internal investigations. Thompson resigned before the investigation was complete, but the board responded well to the situation, by asking questions first and firing later. Indeed, Yahoo didn’t even have to fire Thompson.

That’s probably cold comfort to a company that can’t seem to gather any momentum, but with all its troubles, Yahoo doesn’t need a big employment lawsuit.

Adam Gorley
First Reference Human Resources and Compliance Editor

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Adam Gorley

Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more. Read more
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