CTPartners Says Preventable Errors Brought Down Yahoo! CEO And Directors

In light of the explosive changes at Yahoo! this week – CEO Scott Thompson and four Directors out, and interim CEO and new Chairman in – CTPartners (AMEX: CTP), the sixth largest retained executive search firm in the world, today offered five steps to help Boards and senior management teams avoid making the kinds of mistakes haunting Yahoo! today.

According to CTPartners CEO Brian Sullivan, “Yahoo!’s Board made a series of decisions that led to its current crisis, starting with its relationship with Heidrick & Struggles, its executive search firm that first brought in failed CEO Carol Bartz, who was then replaced with Scott Thompson. While Boards may think that hiding behind a big brand search firm makes them bulletproof, just the opposite happens. The largest search firms have grown to the extent that they are limited in the number of companies from which they can recruit executive talent – they can’t steal from clients and won’t steal from Board relationships. Heidrick’s conflicts restricted them from casting a wide enough net to find the best CEO for Yahoo!”

Sullivan says this must stop. “Banks are considered too big to fail, and search firms have become too big to succeed. Heidrick also failed to properly vet the false claim on Thompson’s bio that he had a computer science degree, credential checking 101. In the end, the bio mistake toppled Scott Thompson, and Heidrick and Yahoo!’s Board share responsibility for a sadly preventable calamity.”

Sullivan offers five steps, part of CTPartners’ Six Sigma™ search methodology that could have prevented a simple thing like a bio from seriously damaging Yahoo!’s reputation and, in the process, exposing poor performance of Board members who mistakenly relied on a too- conflicted search firm.
  1. Round 1 due diligence – initial referencing of prospects prior to their inclusion on a long list and discussion with the Board to spot any areas of concern
  2. Round 2 due diligence – includes prior business results and additional referencing of short-listed candidates, as well as education verification—always—prior to the Search Committee’s first meeting with the candidate
  3. Rigorous competency-based interviews of each candidate designed to draw out specific gaps and potential risks related to the candidate’s background, prior track record, leadership style, etc.
  4. Direct candidate questioning of potential due diligence areas of concern – education credentials, as well as specific accomplishment claims as measured against outside sourcing to validate the claims
  5. Final 360-degree candidate referencing – additional sourcing of individuals with direct knowledge of the candidate and their prior performance, buttressed by an independent background check by the search firm and/or a trusted third-party investigative firm.

Sullivan concluded, “Search firms have to commit to proper due diligence to prevent making Yahoo!’s mistakes. Boards have to partner with the search firms that can access rock star CEOs. Together they can work together to build world-class executive teams and Boards.”

About CTPartnersCTPartners is a leading performance-driven executive search firm serving clients across the globe. Committed to a philosophy of partnering with its clients, CTPartners offers a proven record in C-Suite, senior executive, and board searches, as well as expertise serving private equity and venture capital firms.

With origins dating back to 1980, CTPartners serves clients with a global organization of more than 400 professionals and employees, offering expertise in board advisory services and executive recruiting services in the financial services, life sciences, industrial, professional services, retail and consumer, and technology, media and telecom industries. Headquartered in New York, CTPartners has 24 offices in 16 countries.

www.ctnet.com

Copyright Business Wire 2010

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