Transparency Scandal: Lessons Learned from Yahoo

A recent article, from Talent contributor Deanna Hartley, provides insight into the lessons learned from the Yahoo CEO scandal. Yahoo’s Scott Thompson’s indiscretions make us wonder what the larger repercussions will be for recruitment practices around the globe.

Thompson was hired at Yahoo in January of this year and announced his resignation mid-May of 2012. The ordeal addressed his claim to false credentials, including a false computer science degree. Many individuals called for him to resign, as well as Patti Hart, the director of Thompson’s hiring. This turn of events doesn’t help Yahoo gain footing in the ruthless Internet business. What it does do, however, is highlight how ethics and integrity have become deeply entwined in business practices today.

The pervasiveness of the Internet and social media plays a significant role in keeping companies and executives accountable, said Kevin Krumm, managing partner at Objective Paradigm Inc. These days, resumes can be made available for public consumption via sites LinkedIn and professionals run the risk of shared connections exposing any discrepancy or fib, Krumm said.

The Internet and social media has required the work environment to be more transparent. With just about anyone being able to find out just about anything, it’s important that information is correct. Ethics needs to be one of the utmost important things within your organization. Be sure hiring managers are diligent and meticulous during the hiring processes for employees at lower-, mid- and upper-level positions. Be sure new hires at any level understand that transparency and ethics are central to your organization’s core culture.

Why did Thompson lie about his background anyway? Is that academic background the reason he was hired as CEO at Yahoo? Some say that the degree wouldn’t have made much of a difference in Yahoo hiring Thompson. For many executive level jobs, the college degree from 30 years ago isn’t as relevant as other accomplishments from the past five to 10 years. Why lie about a degree then? And why didn’t Thompson just come clean? Now we’re left to question his motives.

Some say that unethical behavior like sexual harassment and resume fraud are less noticed in lower- and mid-level positions. This doesn’t make it acceptable. Executives are the stars of an organization, and people are more interested in hearing about what a star has done wrong versus hearing that Joe Smith in the next cubicle lied about his education. Shareholders and the American public have recently demanded higher levels of corporate transparency. Reality TV shows and social media sites are fueling the need for organizations to maintain high standards of transparency and ethics.

As for Thompson, he left Yahoo without a severance package. He doesn’t get the once potential stock awards, the bonus or his annual salary. What he is still entitled to is stock and cash worth $6.5 million, which is notable but nowhere near what he would have received had be been fired “without cause”. Ethics and transparency have been motivated by monetary rewards in many situations, and Thompson won’t be reaping any of those benefits.

What Thompson walked away with monetarily will never un-tarnish his reputation. Nor will Thompson’s resignation cleanse Yahoo of the scandal. Yahoo will have to do a lot of cleanup in order to restore the public’s confidence in the organization. The best policy for all organizations, as well as Yahoo, is to remain transparent. Ethics within the structure of the organization will keep the employees and the organization away from questions of transparency and honesty. To read more about Thompson’s ethical issues and lessons from Yahoo on transparency, click here to read the full article.

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