And computer science were three words that Yahoo CEO Scott Thompson would come to regret. Thompson, the

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“And computer science” were three words that Yahoo CEO Scott Thompson would come to regret. Thompson, the former president of PayPal, had been at Yahoo for only four months when Third Point, an activist shareholder group seeking representation on the board, claimed that he had misrepresented his academic credentials in the Yahoo annual report filed with the U.S. Securities and Exchange Commission. The report, which CEOs must certify as true, stated that “Mr. Thompson holds a B.S. in accounting and computer science from Stonehill College.” In fact, Thompson held an accounting degree but not one in computer science. The press quickly ascertained that Thompson’s degree had in the past also been inaccurately stated on the PayPal website but that it was accurately described in formal SEC filings by PayPal parent eBay and another firm where Thompson was a board member. The degree scandal occurred against a backdrop of turmoil at Yahoo, which had been losing ground to web-based companies Google, Facebook, and YouTube. The previous CEO had been fired within a year, and there had been recent staff layoffs. Third Point was the largest shareholder in Yahoo and had launched a proxy war to place its founder Daniel Loeb and other Third Point nominees on the board to assert and protect its interests. Discrediting Scott Thompson was a step in this direction.


How serious of an ethical violation was Scott Thompson’s misstatement of academic qualifications in the Yahoo annual report? Who are the relevant stakeholders here? What might have motivated this misrepresentation?

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