Yahoo CEO apologizes — for being a distraction

Scott Thompson has apologized to his fellow Yahoos — but it’s not the kind of apologia that closes the books. No explanation (yet) of how the Yahoo (s yhoo) CEO wound up in a situation where his educational credentials are distracting folks inside and out, though, only a mea culpa for causing a fuss.

In a staff e-mail Monday posted by AllThingsD, Thompson stressed that a board investigation is ongoing, said he was cooperating and added:

In the meantime, I want you to know how deeply I regret how this issue has affected the company and all of you. We have all been working very hard to move the company forward, and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you.

There was no explanation of how he wound up credited with a computer science degree from Stonehill College when it didn’t offer the program until after he graduated. Or why he didn’t correct an interviewer in 2009 when she mentioned the degree.

Thompson’s e-mail went out a few hours after Daniel Loeb, the head of hedge fund Third Point, issued his latest broadside: a demand for Yahoo to turn over documents related to Thompson’s hiring, the appointment of Patti Hart to the board, and the vetting of the director candidates Yahoo chose over Loeb and most of his slate. Hart was the head of the search committee; she also has been accused of misrepresenting her own undergraduate degree.

This came after the board — as expected — ignored Loeb’s Monday deadline for firing Thompson and having Hart resign. Issuing that kind of ultimatum was like double-dog-daring the board not to do anything by then. No doubt, they would prefer not to do anything that comes off as a response to a proxy battle but it’s too late for that now.

Meanwhile, the process has become the message. The longer the board takes to do or say anything concrete, the less there is to recover.

Not about the degree

Let’s get something straight. This isn’t about where Scott Thompson went to school or what degree he earned there. Those things mattered before Thompson had a track record of success and at various points they likely helped him get jobs. That isn’t what gets you a mid-career gig as CEO at a public company.

But a computer science degree provides a kind of street cred, especially when you’re dealing with engineers and developers.

And even if the kind of unearned degree being claimed doesn’t matter, claiming it and letting it stand does. The first e-mail I opened Monday was from a CEO bemused by Thompson’s failure to meet the problem head on. Demand Media CEO Richard Rosenblatt tweeted something similar over the weekend:

then followed Monday:

When the subject came up during Warren Buffett’s three-hour stint on CNBC, the oracle of Omaha said:

“If I thought as a director, if I thought that an officer had consistently misstated some fact to me, I think I would probably do something about it. We actually had that one time. If you can’t trust the people you’re working with, you’ve got a problem.”

And that’s the real issue.

What next?

If Thompson resigns, is fired for cause or takes a suspension, Yahoo doesn’t have to reach far for interim leadership. The safest bet: CFO Tim Morse has been part of Thompson’s re-org plans and was interim CEO after Carol Bartz was fired. He could step in again. The board, which is in its own state of transition as four members leave and up to five come on, would face the same question as Jeff Bewkes following the short reign of Jack Griffin as CEO of Time Inc. (s TWX) — go inside or try again with an outside candidate. Ross Levinsohn’s name has been raised a few times as a possible internal successor. Rich Riley, the EMEA head who Thompson picked to head the revenue side of the Americas in the new re-org could get a look.

Doing anything permanent before the new board is fully in place would be repeating a mistake. Lucy Marcus thought it was wrong for the outgoing board to pick a CEO.