Is your boss a creep?

Scott Thompson, in November 2010.
AP Photo/Noah Berger

(MoneyWatch) COMMENTARY People are too polarized these days. We're all either left or right, pro or anti-business, and so on. There's a big problem with that kind of thinking. The real world isn't black and white. It's an infinite spectrum of shades of gray.

Just take CEOs or any senior executive, for that matter. If you assume that level of authority or achievement means they're something special, well, you know what they say about people who assume? You're in for a big surprise.

Some CEOs are super-talented managers who become highly successful leaders. They deserve every penny they earn. Others are completely incompetent end products of the Peter Principle or some other failure of organizational process. And then, there's everything in between.

To further complicate matters, there are loads of key factors by which to judge them and make that determination. One of those factors that's rarely explored or talked about is their behavior and its underlying psychology. It's quite revealing, if you know what to look for.

Some executives look sharp and sound slick. As a result, people accept them at face value. They judge the book by its cover, as it were. We're all susceptible to that sort of misjudgment, misdirection or wishful thinking -- especially if, for whatever reason, we want to believe in them.

But if you get beneath the surface, you may find all sorts of unsavory things that don't belong in the personality of a corporate officer or director. And more often than not, there were signs along the way, red flags that were missed. But once the facade starts to crack, it becomes a lot easier to see what lurks beneath.

Here's an example: Yahoo CEO Scott Thompson.

When Yahoo's board chose Thompson, my first reaction was "Who?" A Google search only turned up a redheaded comedian known as Carrot Top. Then I remembered that Yahoo -- a high-risk turnaround with a highly dysfunctional board -- had no chance of landing an A-list executive.

Sure enough, once Yahoo's VPs got to meet Thompson, the reports came in that he was a nice guy and competent, but probably not the game changer they needed. Pretty much everyone had a wait-and-see attitude. Sounded like a real yawner to me.

So, with expectations set pretty low to begin with, it's really hard to believe how fast things have gone downhill since Thompson showed up for work just a few months ago.

How to destroy your reputation in three months

First, he sued Facebook for patent infringement. That didn't sit well with anyone here in Silicon Valley.

Then, he conducted what I think was a pretty dysfunctional strategic processwith the help of Boston Consulting Group but without much of his senior management team. The first result of the process was a layoff of 2,000 employees. Then he rolled out a new organizational structure. Then he met with his VPs to discuss strategy. Kara Swisher at All Things D correctly called this bizarre process "Aim. Fire. Ready."

That was a month ago and he still hasn't articulated a credible turnaround strategy for the company. As I said at the time, reorganizing a company is not a strategy.

Not to mention that, so far, he's failed to come up with a way to monetize Yahoo's sizable stakes in Alibaba Group and Yahoo Japan. Which brings us to the coming proxy battle with activist shareholder Dan Loeb of Third Point Capital. Loeb did some research and found that Thompson didn't have the computer science degree listed in his bio.

That was the first crack in Thompson's nice guy facade. A lot has happened since then, and the more information that comes out, the more questions it raises about what kind of guy Thompson really is.

Yahoo's initial response to the news that Thompson may have lied on his CV was that it was an "inadvertent error." Really? I mean, did Thompson really think it would end there? Well, it didn't. That just made things worse both inside and outside the search company. Now everyone's digging for answers.

Turns out the fallacious degree, which was listed in Yahoo's SEC documents and on its website, was also on eBay's website when Thompson worked there, among other places. Who knows how far back this goes?

Then we learned Thompson wasn't sought out by Yahoo's executive search firm Heidrick & Struggles. While president of eBay's PayPal unit, Thompson cold-emailed a Yahoo director, Intuit CEO Brad Smith, expressing interest in the CEO job. That alone sort of rubs me the wrong way.

It then appears that he was fast tracked through the vetting process since some directors learned of Thompson's interview just hours before voting to hire him, according to the Wall Street Journal. And why was that? Was there something about Thompson that so charmed Yahoo director Patti Hart, who led the search?

A few days ago, we heard that Hart won't stand for reelection; clearly an empty sacrifice designed to take the pressure off Thompson and the rest of the board. It won't work.

Thompson's own behavior has been anything but professional and transparent since "Resumegate" broke. According to Swisher, who has apparently spoken with many people close to the situation, Thompson has been "defiant over the issue" and "blaming Loeb for conducting a personal vendetta."

Most troubling is an email Thompson sent to employees earlier this week where he apologized for the "distraction" all the hoopla has caused without saying a single thing about the phantom degree or how it came to be in his bio for at least the past five or six years.

It didn't have to go down that way

Had he been transparent and forthcoming, that would have put an end to the whole sordid story. Instead, he's lost credibility with employees and the management team. The board has formed a special committee to investigate his background and its own vetting process that was used to hire him. And the company has hired a crisis PR firm to help them deal with the whole mess.

All that distraction and cost to the company and its shareholders -- at a critical time when Yahoo desperately needs to reinvent itself -- rests squarely on Thompson's shoulders.

Now, you can think what you want about whether Thompson should be firedor not. But how can the board, shareholders, employees and customers trust a CEO who at the very least has not been forthcoming about something that's clearly material?

Personally, I think it demonstrates a lack of ethics, destroys their credibility and renders them ineffective. In any case, it's pretty clear to me that Scott Thompson's nice guy facade has cracked and his behavior has revealed someone who isn't fit to be an officer of a public company.

One more thing. Boards are allowed to make mistakes. They're human. But when they chronically hire the wrong people as CEOs, as Yahoo has, then it's time for a complete overhaul. Jerry Yang is gone and Roy Bostock is on his way out, but even that doesn't appear to be enough. I still think Yahoo has a chance to save itself, but not with leadership like this.