The news is littered with scandalous accounts of fallen heroes from all walks of life. Recent deposed champions include Tiger Woods, Lance Armstrong and Arnold Schwarzenegger. Public downfalls of heroic leaders are not isolated to men only. In fact now that women are in prominent leadership roles, they too engage in unethical practices that often tempt an individual in a position of power. Martha Stewart and Twilight Saga star Kristen Stewart (no relation) are examples of two such women that experienced public shame from their poor choices. Scandals that emerge however within the corporate frame like those of Enron and AEI may have far greater impact on the public. The effects of unethical practices from corporate leaders can reach beyond the scope of their employees and influence the well-being and safety of the populace as well as the environment. A Fortune 500 Company CEO that illustrates ethical behavior is bound to lead that corporation to success.
When a corporate leader of great magnitude illustrates unethical competence the damage can be irreparable to the company as well. In addition, it can have a negative effect on that company’s productivity and public image. It is in their best interest to respond quickly when a scandal emerges to keep damage to a minimum. For example, former Yahoo CEO Scott Thompson showed ethical behavior when he stepped down from his position as CEO shortly after sources revealed his resume contained false information.
The headlines at CNN Money read, “Yahoo confirms CEO is out after resume scandal!” (Pepitone, 2012). Fox Business news reported, “It’s tough to regulate honesty among individuals; it often falls on the company to make sure the information presented to employers by potential hires is accurate – from mailroom staffers to chief executives” (Booton, 2012, para. 2). The scandal created media frenzy.
A resolution that displays integrity is necessary to protect a corporation’s trustworthy image. Yahoo was desperate to find a solution. Once an industry giant, they began to feel a shift in their market share and hired Thompson to turn the company around. Their future was in question after competitors Google and Facebook joined the cyber scene and Co-Founder Jerry Yang resigned. Yahoo tried to revive the troubled brand announcing a major shake-up replacing nearly half of the board members. They were banking heavily on the former EBay CEO to bring them back to the forefront:
Yahoo lost significant market share, reduced its staff multiple times, and its market cap continues to dive. But chief executive Scott Thompson tried to re-hydrate what was his raisin of a company by killing off unnecessary products and restructuring the organization. (Kelly, 2012, para. 1). In his defense, Thompson alleged a lower level manager at a different firm created the resume. He professed his error was not reviewing the document before it went public.
Regardless of the claims, reaction from the public was stern because patrons want to conduct business with an ethical company. Concerned about their global image, Yahoo handled the scandal quickly to limit damages. The brand stood behind their CEO during the investigation. Upon conclusion, Yahoo released a statement confirming Thompson had left the company (Pepitone, 2012). The decision for the CEO to step down illustrated ethical competence. Thompson was ousted after four months in his new position. Speculation was he departed due to the resume scandal; however sources revealed he was diagnosed with cancer and stepped down to focus on his health.
After enduring months of scrutiny from the scandalous uproar Yahoo seems to have weathered the storm. In October 2012, with replacement CEO Marissa Mayer at the helm, Yahoo reported a slight rise in their third quarter net revenue. Yahoo standing behind their executive during the impending investigation followed by Thompson’s resignation sent a clear message: Yahoo is an organization that practices good business ethics. In conclusion, without ethical competence from corporate giants, these institutions, the public and the environment may face irreparable consequences. A CEO from a Fortune 500 Company who displays ethical behavior illustrates noble character; an important leadership trait that is fundamental for corporate success.
Booton, J. (2012, May 08). Business Leaders. Retrieved October 21, 2012, from Fox Business News: http://www.foxbusiness.com/business-leaders/2012/05/08/is-ceo-vetting-tough-enough-yahoo-scandal-fuels-doubt/#ixzz2ALT0udW7
Kelly, M. (2012, April 25). Yahoo Needs Help: Market Cap Down, Stocks Down, Employee Count Down. Retrieved October 21, 2012, from Venturebeat.com: http://venturebeat.com/2012/04/25/yahoo-infographic/#DVooLSrEHerAEXyZ.99
Pepitone, J. (2012, May 14). Yahoo confirms CEO is out after resume scandal. Retrieved October 20, 2012, from CNN Money: http://money.cnn.com/2012/05/13/technology/yahoo-ceo-out/index.htm