With Yahoo’s board meeting to discuss the latest in a seemingly endless series of crises to overtake its top leadership, CEO Scott Thompson has issued an apology.

Not for the “inadvertent error” that led to his qualification-inflation. And not even for Yahoo’s overly casual use of that phrase last week, which was denounced by dissident investor Third Point as “insulting to shareholders.”

Instead, Mr Thompson’s apology was for letting down Yahoo’s own employees. As he rightly senses, another source of distraction at a time like this is the last thing the company needs. In an internal memo, supplied by Yahoo, he had this to say:

As I told you on Friday, the board is reviewing the issue and I will provide whatever they need from me. 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.

The apology is overdue, but it doesn’t make the board’s decision any easier. As Hewlett-Packard’s directors discovered after dispensing with the services of CEO Mark Hurd after they concluded that he had not been direct with them during an investigation into allegations of sexual harassment, losing an effective CEO can be very bad for the share price.

Should the board decide that Mr Thompson was responsible for – or knew of – the overstatement of his qualifications, it might be tempting to downplay the shortcoming as a youthful indiscretion or momentary lapse in judgement.

Most experts in corporate ethics, however, take a clear line on matters like this: once a CEO has been shown to be untrustworthy, there is no going back. Add to that the fact that Yahoo’s directors were already operating under the glare of public scrutiny (as the directors of HP were before them), and a strong response seems unavoidable.

It is now up to Yahoo’s directors to decide how far they need to go.

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