Leadership change and stakeholder analysis in Yahoo's CEO departure

¶ … stakeholders for Yahoo?

The key stakeholders for Yahoo include the shareholders of its stock, major executives within the company, its thousands of employees around the world, and the millions of individuals and companies that rely on Yahoo's internet technology services. It is the responsibility of management to ensure than Yahoo is operated to the best of the company's collective ability, both to generate wealth for its shareholders and to assure quality products are delivered to clients and users (Salvatore, 2006). One of the most active stakeholders influencing Yahoo's business decisions in the past few years has been Daniel Loeb, the founder of one Third Point LLC and one of Yahoo's most outspoken investors.

Why did Thompson have to leave Yahoo?

In May of 2012 a number of falsified credentials in Thompson's published resume were revealed, forcing the company's third Chief Executive Officer in a the last three years to resign in disgrace from the formerly industry-leading search engine provider. According to a series of reports published by Bloomberg Businessweek, "Thompson's undoing stems from erroneous biographical references to him holding a bachelor's degree in computer science from Stonehill College" (Womack, 2012), when he actually earned a degree in accounting from the university. By intentionally misrepresenting his competency and qualification in computer science, a seemingly essential skill to attain the position of CEO for Yahoo, Thompson betrayed the trust of the company's key stakeholders, and his resignation was forced in part from external pressure applied by one of the company's major investors.

- What has been the role of investors and of the board?

One of the prominent player's in Thompson's recent resume scandal has been Loeb, who heads the investment fund Third Point LLC, one of Yahoo's more sizable investors and a key driver of its corporate policy. Loeb has been publically advocating for an overall of the company, claiming that Thompson has mismanaged Yahoo since becoming CEO, and according to the reporting of Bloomberg Businessweek Third Point LLC "has been locked in a dispute with the company over its direction and appointments to the board, calling it one of technology's 'most mismanaged companies" (Womack, 2012). Loeb's investment fund "which owns about 5.8% of Yahoo, stepped up pressure on Yahoo since flagging discrepancies in Thompson's resume on May 3" (Womack, 2012), eventually achieving an ostensible victory by forcing his resignation just two weeks later. Working in concert with members the media to apply pressure, Loeb also won another victory when Yahoo agreed to name three new independent directors to the board, one of whom was nominated directly by Loeb to represent Third Point LLC's interests. Board member Alfred Amoroso was also appointed to an investigative panel charged with ascertaining the details of Thompson's resignation, and his work ultimately concluded that Thompson's errors were inadvertent in nature.