A Trojan Horse: Why the Yahoo! CEO Debacle is Important

In early May, 2012, the public learned that the CEO hired to lead Yahoo! and its $18 billion enterprise was  using a resume that  apparently misrepresented his education credentials.    The incident launched the predictable finger pointing, e.g. an  accusation that somebody else may have changed the resume;  that the resume misstatement was not material; that the untruth  was mitigated by the candidate's prior business experience....    The fact is that the Yahoo! Board and the responsible search  firm seem to have fallen asleep at the switch.  There's no question that the underlying problem here is integrity. However, scan the landscape of any industry or profession and  this issue periodically surfaces.  The best run businesses require  a third party background check on every executive hired, including the details of their employment, credit history, driving  and criminal records, address tracking - and oh yes, their  education credentials.  There are occasional discrepancies that  are resolved by a further review of the information, or by  discontinuing the candidacy of an otherwise impressive  prospect. Should this potential lack of integrity be a concern when looking for an executive who otherwise brings a professional track record, and impressive references? Absolutely!  It may be the lack of a credential, but it's also a matter of integrity.  Like a Trojan horse, once inside  a business an executive's susceptibility to compromise one  small truth can morph into a habit of compromising more  and larger truths.  It's a disease that can (and has)  jeopardized businesses - Enron, Tyco, MF Global,  JP Morgan, and others come quickly to mind.  It impacts  investors, employees, and other stakeholders.  As for  reputable customers and suppliers, they won't sustain a  relationship with a company they can't trust, or with  whom an association may taint their own brand. Yahoo!, its Board members (some who have now left), and shareholders (whose investments were jeopardized) have  been burned or tarnished.  Time will finally establish the  degree to which this single incident will further affect  reputations, and the enterprise. Shaded resumes that are deployed to gain entry into a business are not an executive phenomenon, or even a large  company anomaly.  Take one smaller New England company  that recently filled an operations role with a candidate  recommended to them.  He was a good, reliable worker.  When some reports of inappropriate behavior toward his  female co-workers began to surface, the management  wondered if they should look into his background, which  they hadn't during the recruiting process.  They did, and  discovered that they had engaged a convicted sex offender. Why do people misrepresent their backgrounds?  How do they avoid being detected?  How is it that their hiring is  recommended by credible people?  Why do some  otherwise smart leaders continue to gloss over the entire  history of a candidate when investing in a new executive,  or employee?      Whether a search firm is engaged to recruit an executive, or the company's staff is assigned to fill a junior level position,  the completion of a disciplined third party background check  is essential.  Somewhere, this Trojan horse is positioned outside or already within the walls of yet another company.