Question Loeb, CEO of Third Point who
Question 1 – What triggered the controversy?
entire controversy was triggered by Dan Loeb, CEO of Third Point who also owned
5.8% Yahoo. Dan sent a letter to Yahoo’s Board of Directors which he then made
the contents public. The letter detailed how Thompson’s resume included false
claim that he holds a degree in computer science from Stonehill College, when
in actual fact Thompson’s degree was in Accounting only. Loeb sites that
Stonehill College only warded computer science degrees four years after
Thompson graduated. Loeb questioned whether if Thompson embellished his
credentials and if the Board of Directors of Yahoo failed to exercise due diligence in the
hiring of a Chief Executive.
Question 2 – Outline the timeline of the main events of the case.
May 3: Yahoo
confirms that CEO Scott Thompson has only an accounting degree from Stonehill
College near Boston, and no degree in computer science. Activist shareholder
and hedge fund leader Daniel Loeb at Third Point LLC had revealed the inaccuracies
in both bios.
May 7: Thompson
apologizes for the error about his degree, without explanation. He says in an
email to employees that he won’t resign.
May 8: Yahoo
says Hart will step down at the company’s annual shareholder meeting, which
May 10: Thompson
assures his colleagues at Yahoo that he didn’t supply the incorrect
May 13: Yahoo
says Thompson has left the company and Ross Levinsohn, an executive in charge
of its media operations, will be interim CEO.
announces new board chairman, Fred Amoroso. The company says Hart, current
chairman Roy Bostock and two other board members are leaving and three new
board members, including Loeb, will join Wednesday.
May 14: The Wall
Street Journal reports that Thompson had told the board last week that he has
thyroid cancer. The diagnosis contributed to his decision to step down.
Question 3 – What was the repercussion of the issue on Thompson?
It’s been clearly established that Thompson’ act of
falsifying his qualification was deliberate. As an immediate repercussion of
this, Patti Hart plus two other Board members resigned. Chairman of the board at the time, Roy
Bostock resigned and was replaced by Fred Amoroso. Thompson was reported to
have resigned on medical grounds and was replaced by Ross Levisohn.
Question 4 – Explain the integrity
aspect of the case.
simplest form of integrity explained, in my opinion, is that one needs to have
to be true to oneself and to do nothing that would dishonour you. Having
personal integrity is to have moral principles, uprightness and taking that
moral high ground at all times. Integrity at the workplace is the crucial value
that an employer looks for in the person that they hire
only character in this case that had a faint or perceived to have some form of
integrity was Roy Bostock, then Chairman of Yahoo and the two other board
members that stepped down along with him. He stepped down as Chairman and seen
by others as taking full responsibility of the entire conundrum. Scott
Thompson, and Patti Hart to a certain degree are examples of integrity meltdown
at the onset. As a leader, a CEO, integrity is not an option. Scott Thompson lost his integrity. His support (whether active or
tacit) for the spurious claim was a really big problem. This represents two
approaches (playing victim and trying to “spin” the issue) that
validated the original issue of lack of integrity.
Earned Individually, but Granted Publicly. In other words, a person can be of high integrity, but if
everyone thinks he’s not, his actions don’t matter. The flip side is
perhaps more common. A person could be of low integrity, but if everyone
thinks he has integrity, then he’s golden. However, once the truth comes
out, he is done with, because all control is lost.