Thompson needs to go as Yahoo’s CEO

YahooYahoo CEO Scott Thompson’s latest explanations don’t cut it. He needs to go.

According to Business Insider, he told Yahoo employees that the errors on his bios were not his fault — he didn’t submit a resume to Yahoo, some underling cut and pasted his bio. Even if that were the case, he is still ultimately responsible. I’ve had recruiters puff up my resume. Sometimes they add things that aren’t true. I remove them as soon as I see it.

He also claimed that it would be awkward to correct an interviewer who was inaccurate. That’s ridiculous. I interview a lot of people. They correct me when they disagree with my assumptions in asking a question. I recently interviewed Albert Wenger of Union Square Ventures and asked a question about really bad ideas in the 1990s dot-com boom. He challenged my assertion that they were bad ideas (it’s around the 3:40 mark).

I am also frequently interviewed on television and radio. If an interviewer gave me credentials that I never had, I would correct it on the spot. Although, in a live interview, I do let small mistakes slip through. (In a 3-5 minute interview, it’s hard to get everything in.) And in a TV interview, the interviewee often doesn’t see the graphics being shown.

There’s also an important difference between live and recorded interviews. If you or the interviewer make a mistake in a recorded interview of this magnitude, you can get it fixed. In one case, as soon as an interview was over, I realized that some words had slipped out of my mouth that were unnecessarily incendiary; I asked the interviewer not to use that in the segment. It seems that the Tech Nation interview was recorded. Thompson or Yahoo PR could easily have fixed that error even after the fact.

But the biggest problem with the explanations is that they still don’t explain how Thompson’s fictitious credentials made it into Yahoo’s regulatory filings. In Yahoo’s amended annual report filed on April 27, it says, “Mr. Thompson holds a Bachelor’s degree in accounting and computer science from Stonehill College.”

The filing was certified by Scott Thompson himself, according to rules set forth under Sarbanes-Oxley.

Here’s the text of that certification:

I, Scott Thompson, certify that:

1. I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K of Yahoo! Inc. for the year ended December 31, 2011; and
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

Dated: April 27, 2012

So either he didn’t review the amendment as noted in bullet point 1 or he reviewed it and decided to ignore the “untrue statement” that he had a degree in computer science. Neither is a good scenario.

The purpose of this certification is to give investors trust in the documents they review and ensure accountability from a company’s leadership. That needs to happen here.

I’m not the only one who thinks he needs to go. A survey by WikiOrgCharts of 40 Yahoo employees found that 24 of them thought he should leave. (WikiOrgCharts is a startup that allows users to pool their LinkedIn connections to collaborate on building a company’s org chart. [Disclosure: the founder of WikiOrgCharts is a former work colleague of mine.] ) Although 40 is a very small sample, the open comments from employees were interesting:

“It’s extremely disappointing given his recent All Hands speech to Yahoos worldwide about the importance of integrity. A CS degree from Stonehill College in 1979 would do very little to make him a credible CEO, it was his TRACK RECORD OF SUCCESS that got him the job and that we believed in. Unfortunately, if this in fact turns out to be a resume embellishment, all integrity will be lost among his fellow Yahoo’s. This didn’t need to happen and unfortunately our Board is now being looked at with some serious questions as well. Just a very frustrating experience to be a part of, but I will be hanging in there because I BELIEVE IN WHAT THIS COMPANY COULD BE AGAIN.”

“What I don’t agree with, and do not feel good inside about is that this puny lie ever occurred. How did this slip through the cracks of our overall team even? How did this process even take place to miss something? It’s slightly embarrassing and I feel like the overall organization is kind of like … “doesn’t really surprise me.” As for Scott, I question his character and overall level of trust. Respecting someone who appears dishonest, is another thing to move past from. Yahoo! is a tough crowd, with a real low morale at this point in time. … I definitely will be a lifer with Yahoo! if they can undo what they have done, which is make coming to work no longer a joy, but rather a JOB … boo! We need to get our stuff figured out and get everyone excited to brag about Yahoo! I still do, but it’s not as sincere lately.”

“Fundamental quality of a Leader is “INTEGRITY”. Scott has proved that he has no Integrity and i don’t want to work for a person or company that has no ethics and principles. In Jan 2012 an employee was fired for faking his resume and i feel law should be equal for everyone.”

“I don’t think Scott should be fired. I think he should resign. I think that other than his lying on his resume, he (and the entire company) have handled this snafu terribly.”

“I’m appalled by the lack of integrity and honesty displayed by Scott Thompson who apparently isn’t even willing to apologize for his misrepresentations. All he apologized for was the disruption this whole affair has caused thus far but not for the fact that he lied in the first place. How do so-called leaders expect integrity and honesty from their employees, if they don’t even honor those values themselves? A senior executive is supposed to lead by example – clearly this is not happening here at Yahoo!. I also feel sorry for the 2000 people who lost their jobs courtesy of Scott Thompson, which could have been avoided had this blunder been exposed earlier and Mr Thompson either been removed from his post or, even better, never had obtained it in the first place.”

“I love Yahoo, but sadly this CV issue is not even in the top 5 of reasons why I lack confidence in our leadership. Those reasons would be the repeated cycles of layoffs and reorganizations, a narrow minded focus on short term profits, and Scott’s decisions to sue Facebook and dismantle the Products group.”

A common theme in the comments was that everyone should play by the same rules. Any other employee in Yahoo caught with such a lie in their credentials would be fired.

A few comments were supportive of Thompson. Here are a couple:

“These minor manipulations are common and we should only care about the caliber of the person not petty lies.”

“Who cares. Consider the source. Loeb wins [if] Thompson leaves. Go Scott!”

But the survey also pointed to low morale at Yahoo: Nearly half of those who responded said they were planning to leave Yahoo in the next year. Seven said they plan to leave in the next 30 days.