Yahoo's Controversial Board Appointment Dominates Shareholder Meeting

 
 
By Michelle Maisto  |  Posted 2014-06-25 Email Print this article Print
 
 
 
 
 
 
 
Yahoo

Yahoo's 2013 successes were overshadowed during its shareholder meeting by the controversial appointment of former Walmart CEO H. Lee Scott to its board.

The intended focus of Yahoo's June 25 shareholders meeting was the company's successes in 2013. CEO Marissa Mayer called it a year of "tremendous progress."

What the company's vocal shareholders wanted to talk about, however, and what dominated the question periods, was the nomination—and election, during the meeting—of former Walmart CEO H. Lee Scott to Yahoo's board of directors.

More than two years ago, Walmart became the focus of a bribery scandal in Mexico, where it is reported to have paid more than $24 million to hustle the expansion of its chain in that country. In April 2012, The New York Times reported that a whistle was blown in 2005, when a former executive informed a senior Walmart lawyer that the company had "orchestrated a campaign of bribery to win market dominance."

After Walmart's lead investigator, a former FBI special agent, recommended expanding a preliminary investigation, Walmart leaders shut it down, the Times reported. It added that its reporters' investigations uncovered "a struggle that pitted the company's much publicized commitment to the highest moral and ethical standards against its relentless pursuit of growth."

The report noted that Scott, then Walmart's CEO, "rebuked internal investigators for being overly aggressive," and days later the investigators' files were shipped to Mexico and responsibility for the case was shifted to the general counsel of Walmart de Mexico. This was, said the Times, "a remarkable choice since the same general counsel was alleged to have authorized bribes."

One shareholder representative asked what Yahoo's vetting process was, and how Scott's integrity was assessed.

Maynard Webb, chairman of the Yahoo board, said that Yahoo wanted a board member with strong CEO experience, and so board members developed a list of potential candidates who were pursued by an outside recruiter.

"Lee's experience, having run one of the country's largest companies, was stellar," said Webb.

He added that the Walmart-related allegations were vetted by internal and external counsel, and Yahoo is "very pleased and supportive of welcoming Lee to the board."

When another shareholder asked whether there wasn't another candidate who also had retail experience, Webb answered, "We felt that his integrity was very high and the value he could bring to Yahoo … was very high. He's an avid Yahoo fan and user."

Mayer added, "His experience is something I'm excited to learn from."

 
 
 
 
 
 
 
 
 
 
 
 
 

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