RadioShack Board Stands Behind CEO
By George Anderson
RadioShack’s board doesn’t seem to care that its CEO lied about college degrees he said he received but did not.
On Tuesday, the board issued a statement saying it “reaffirms its support for David Edmondson in fulfilling his role as chief executive officer.”
Last week, Mr. Edmondson told the Fort Worth Star-Telegram he had finished a degree in theology by taking correspondence courses from Pacific Coast Baptist Bible College. When Mr. Edmondson joined RadioShack in 1994, reports the paper, his resume said he had received a Bachelor of Science degree from the institution.
The pastor who Mr. Edmondson said served as his advisor, Ron Hoover, said he had “good memories about David” but no recollection of Mr. Edmondson finishing the degree program.
In the interview with the Star-Telegram, Mr. Edmondson had said he spent five hours a day working on correspondence courses towards the degree while serving as associate pastor and youth director at Security Baptist Temple. Mr. Hoover was the pastor at the church.
Moderator’s Comment: Does any employee’s strong performance on the job outweigh having misrepresented themselves when they applied to join a company?
Can retailers afford to do the extensive background checks required to verify all the information contained in a potential employee’s resume and/or work application?
RadioShack board member Thomas Plaskett, who chairs the company’s corporate governance committee, said the board has not wavered on its support for Mr.
Edmondson.
“I know what the board’s responsibility is,” he told the Star-Telegram. “I stand by the statement.” –
George Anderson – Moderator
Race’s generous exposure of the issues he believes to be at stake notwithstanding, I reckon this guy has paid his money and taken his chances. He got caught. How does this qualify him to be a CEO or hold any other position of responsibility or leadership?
The signal given to RadioShack employees, franchisees, stockholders and suppliers is: it’s OK if the boss may be a liar. Compounding the issue: the boss doesn’t have to prove the truth. BTW, the board and the boss aren’t doing such a hot job lately, regardless, if you look at the company’s profitability.
I agree! Also, as stated, this is definitely a black and white issue. If a CEO doesn’t tell the truth, what does that portend down the road with all the other employees? This is easy, particularly in this day of Adelphia, Enron’s etc of the world – and this is a PUBLIC company! He should be let go.
Personally, when we hire, we could care less about a person’s educational background. I won’t, but I could go on about the many college graduates I’ve been around who I wouldn’t let run my simplest job.
This is simply about trust and doing the right thing.
A lie is a lie. I don’t get it. We all know the rules of engagement in business. This is a blatant violation of the rules and what’s right. No doubt, if he isn’t sacked, we will see more ‘fudging’ from RadioShack in the future.
How can we not agree that unethical misrepresentation by a corporate leader is not acceptable? After Enron, Adelphia, MCI and the other cases which prompted Sarbanes Oxley, all of us should concur that ethical corporate governance starts at the top. Lying in the corporate world, regardless of intent, is unethical and reflects upon a person’s character, intent and judgment. In the military they call it honor. In the boardroom it should be called criminal. We cannot forget that Dave Edmondson probably signed a statement on his application saying that all of the information he gave was correct. Not having a degree, and saying that you did is a breech of confidence and inappropriate for a CEO.
If a lower level employee would lose their job for the same infraction, then Mr. Edmundson needs to go.
This situation does raise the question, however, as to why companies in and out of retailing are requiring college degrees for many jobs that could be ably handled by intelligent people without a degree.
Bear with me in this long reply. There are some very important issues at stake, and I want to expose them.
We have seen this problem for years, and have studied it as well. Notice how organizations actually create this very problem:
– In most organizations we have studied, the resume is basically the ONLY entry point; they won’t even look at you unless you have an astounding resume. An “average” resume won’t even get a second glance.
– This means, in actual fact, that the resume is the only way to get the job. Yes, you have to have great interviews, etc. But without a great, REALLY great resume, you are “dead in the water.” You could be Einstein or Bill Gates, and if your resume is “flat” or on brown-tinted paper or is too long or doesn’t have “words with punch,” etc., no go.
– And remember the obvious here: having a job is not a luxury! So what do you do? You format and fine-tune and re-word and buff your resume.
– But then the organization creates this legalistic standard, “misrepresentation,” which now has come to have a life all its own — we don’t even ask anymore what the misrepresentation is really about or what we are really trying to do here (which is get good people into the organization and have them stay). It has come to the point that misrepresentation is a black-and-white issue: it doesn’t matter whether or not you have done a wonderful job, all that matters is whether you “misrepresented” yourself or not. Even ten years ago. Misrepresent yourself, and you’re outa here, man!
– So the organization creates the “need” to misrepresent, and then punishes harshly anyone caught doing it.
This is madness. Our studies of organizations’ hiring and retention practices shows terrible ineffectiveness. One study we did was to find out how much more effective organizations’ hiring practices are than just drawing a random sample of people to work for you. I seem to recall there were around 150 companies in that study. We found there was no difference: it appears that the standard hiring practices are no better at producing an effective workforce than SIMPLY DRAWING A RANDOM SAMPLE of people to work for you. Of course, we have come under much fire for that study from the HR world.
The basic problem with the standard focus on resumes and all the rest is this: they shut out those who have no formal experience in something but have an extremely high aptitude for it and passion for it and are really, really good at it. We believe that focusing on someone’s experience, their resume, their credentials, etc., focuses on the wrong thing and creates many problems. We have studied literally thousands of executives. Every single one of them has a resume that is just magnificent. And yet somewhere around 78% of them are rated as “fair” or “poor” in job effectiveness.
If I criticize so much, is there a better way? You bet. Let me toot the horn (again!) of our consulting firm (what kind of consultants would we be if we see all these problems in OTHER companies but did nothing differently ourselves?). Our consulting firm’s single hiring and retention Principle is as follows:
A person’s attitude and approach determines everything else.
This means: We do not care what someone has done or not done in the past. We care about what they can do now, and how they do it.
We do not care about resumes. We care about what someone is passionate about and what they WANT to do, whether or not they have done it in the past.
We do not care about background checks. We never do them. We feel they are invasive. We feel they create antagonism. We feel that doing them comes from a stance of “we the partners” and “they our staff,” and we reject this division. We feel they also often come from a place of suspicion. We feel that unless an organization MUST use them for some reason, background checks are a sign that there are deeper problems in the organization.
We do not care about references. If we have to rely on references to try to understand how well someone will work or what they can do, we aren’t doing our job. Our job, at hiring, is to try to really get to know someone, and we have many ways we do this that most organizations do not do.
We do not care about personality tests, skill tests, job-preference assessments, etc. Our research shows these are not only not all that useful, they also promote an us-them power difference between “partners” and “staff,” and we reject this.
We do not believe in probing microscopically for a person’s morality. What did someone do ten years ago? We don’t care. Did one of us run a red light yesterday and allege we didn’t run that light? We don’t care.
We do not care about educational degrees or certifications. We care, again, about what someone can do and their passion.
How well does this work for us? If anyone cares, I’ll share the statistics we have.
Let’s find a better way to do this.
For me this one is black and white. Leadership/management establishes the standard for any enterprise. If a senior executive lies about his or her history then they cannot be trusted. This sends a message to every associate that it is OK to lie. You will not be punished or lose your job, in fact, you may be promoted. After Enron and other well documented ethics issues by senior executives, the Board of Directors has only one decision, that is to find a new executive.
On one hand, the education he got or didn’t get happened 25+ years ago, so his performance in the interim should outweigh that. On the other hand, the misrepresentation occurred only 12 years ago and obviously was a factor in him getting hired by RadioShack. So, the board needs to lean heavily on what kind of job they think he is doing now, but if they are unsure of anything, they’ll have to factor in the misrepresentation. And, in today’s environment of mistrust of large institutions and corporations, they can’t afford to leave him in place if they don’t trust him.
Truthfulness has never been a qualification to become a CEO so why should it start now? This would be a good excuse to get rid of him if the board wanted to but apparently they don’t. It does make you wonder what else he might have a “convenient memory” on though.
This story brings to light a couple of interesting perspectives. On the one hand, if someone is unethical about their background, credentials, and education – what else are they willing to “fudge, stretch, or exaggerate”? In the current environment of corporate malfeasance, it just does not “smell right” to have this occur under the RadioShack’s board’s watch.
Another element is “who did the fact checking on the hire and how was this missed?” Is the board merely a “rubber stamp” for the organization, and if so, that speaks volumes for their utility, ethics, and seriousness of intent of their responsibilities.
Lastly, (and this is not clear) is the job one that REQUIRES a college degree to begin with? Without seeing a job description, it is difficult to comment on whether the board mandated that the applicants be college educated (it appears the CEO is doing a fine job without the benefit of the degree, so what does that portend for importance of “higher education” as a requirement for executive positions?).
In this situation, job performance and resumes probably have nothing to do with who the CEO is. Board members and CEOs in publicly held companies are often close allies who protect each other for their own self interests. Obviously, the Board of Directors finds what has happened acceptable. There really isn’t much the small shareholder can do about it.
When it comes to CEOs, the Board of Directors is looking for someone who will “play ball” and be on their team. They don’t want to hire a stranger that requires a background check.
Mid-level managers probably have more extensive background checks done on them than would ever be done on a CEO.
The message this sends to the troops in the trenches is horrible. And, how can RadioShack now ever fire anybody for falsifications on the resume? I’m a fan of Race’s postings, because I think he brings a lot of terrific perspectives, but I can’t agree this time on no background checks, etc. I’m a bad judge of character. Over the years, I’ve been gullible, naive and way too trusting with job applicants, even if I’ve spent considerable time with them. I’ve hired more than my fair share of crazy people because I believed them when they lied to me. This unfortunate history has made me a big believer in detailed reference checking etc., and a staunch advocate of truth in resumes.
It certainly is an interesting point Race makes about a company making a need to misrepresent, and then punishing anyone doing it. I also believe this to be true, although I think many companies create a desire to misrepresent. It’s a Catch 22. I also believe people must be reprimanded for unethical behavior. Companies need to re-examine their hiring process and create a system where many elements, not just one, are weighed proportionately.
That said, if the company had erformed a background check, this all could have been avoided. Background checks are necessary for verification alone.
A strong job track record should not outweigh misrepresentation. Standards are set from the top of the company. If the facts stay the same, here is my prediction: the general public will not tolerate Mr. Edmondson’s behavior and this will strong arm the board into reacting harshly. His poor decision to act unethically will ultimately cost his job. He will resign his position or be forced out.
Race, I’m thrilled at the progressive hiring practices of your company. They sound amazing. Assuming you and anyone else involved in the process have received the training you need to be effective at it.
And, it has almost nothing to do with the situation at RadioShack. Your organization’s culture is what it is, and misrepresentation on a resume would not be a big deal. In the early days of Microsoft, I know for a fact that highly creative misrepresentation wasn’t a deselecting factor…on the contrary.
Now…RadioShack. This is, as has been stated, a no brainer. The guy goes. Period. Organizations must have integrity, and they have to have it around whatever the norms and standards currently in effect are. Race would change those standards and norms, and maybe I would too. But we deal with what IS, and what IS at RadioShack involves the use of resumes as integral to hiring decisions.
This is a public company! If I’m an analyst, I am immediately skeptical (ok, more than normal) of anything this guy says. Anything. He can do NOTHING to rehabilitate himself except wait for me to get a different job.
Gotta go. Sorry. See ya. Suck it up, members of the Board. You screwed up in your due diligence; the ends do not justify the means, and now it’s time to take one for the team.
Most recent studies of Fortune top 500 companies indicated that a big portion of CEOs have no higher degrees than bachelor (very few have Harvard or Stanford MBAs). In fact, some of the most successful ones have no degree. Look at Bill Gates and Larry Ellison–neither have degrees. However, I do agree with Race Cowgill that we created this problem ourselves. When jobs are advertised, how many do not require at least bachelor degrees?
Human resources departments are also all programmed to look at candidates who have certain credentials only. A few years ago, someone posted Bill Gates’ and Larry Ellison’s resumes on a job web site. Everything was identical except the names. Now, are we going to blame someone who polished his resume so he will at least pass the screening of the human resources department?
We, as a society, put too much on credentials, degrees, and the right kind of degrees. We created this mess and when someone falls into this trap, we want to kill him..? Who wants to cast the first stone?
I strongly believe that if ones job performance greatly exceeded his qualification, say 12 years ago, he should stay. His credentials 12 years ago has no relevance to his current job! Let’s get on with life, rather than looking back all the times!
The following statement was issued by David Edmondson today.
“I want to address issues raised about my academic record and the statements of fact in my public resumé.
“The contents of my resumé and the Company’s website were clearly incorrect. It is my belief that I received a ThG diploma, not a BS degree as I asserted. I clearly misstated my academic record, and the responsibility for these misstatements is mine alone. I understand that I cannot now document the ThG diploma.
“I apologize to the Board and the employees for the confusion I have created by carrying erroneous information on my resumé and mishandling my explanation of it. I will provide all information to the Board in order to clarify these issues.
“I love my work at RadioShack and am eager to increase shareholder value moving forward.”
As a result of Mr. Edmundson’s statement and the publicity surrounding this incident, RadioShack’s Board of Directors has decided to hire an independent counsel to investigate the matter.
The CEO obviously thought listing a degree he did not have was important. He schemed to get the job in the first place, so his performance later is irrelevant.
He has to set the pace. He has basically said by his actions, and now the board’s, you can lie on your application, you can lie about your resume…well who cares?
He signed an employment application, affirming it to be complete and truthful.
And, of all things, the guy was a preacher…or was he? A non-existent degree from an obscure bible college should have been easy enough to check.