Resume Fraud In The Corner Office

Resume Fraud In The Corner Office

Judy Olian

(Judy Olian is Dean of Penn State's Smeal College of Business and a leading expert in strategic human resources management.)

Over the last couple of years, several high profile professionals have fallen due to resume fraud. In higher education the case of Notre Dame football coach George O'Leary grabbed headlines. He was forced to resign five days after being hired, admitting he lied about his academic credentials. O'Leary's resume noted that he received a masters degree from New York University, and that he earned three letters playing football at the University of New Hampshire. In fact, he had done neither.

A spate of cases have involved executives. In 1999 Lotus Corporation's then CEO, Jeff Papows, was exposed by the Wall Street Journal alleging that he had exaggerated his military record, misrepresented his education, and claimed he was an orphan when he was not. After the episode continued to draw attention, Papows finally resigned though landed well, heading another company today.

Veritas Software CFO Ken Lonchar was forced to resign last month after making false claims that he was a Stanford MBA graduate. That day Veritas' stock price fell about 16 percent. Last week, Bausch & Lomb, the eye care company, announced that Chairman and Chief Executive Ronald Zarrella would forfeit $1.1 million (a bonus that could have reached $1.65 million) because his resume falsely noted an MBA from New York University. The claim on the resume had remained unchecked by prior employers, including General Motors that had hired him as Executive Vice President. And this week, MSG Capital Chairman and CEO Brian Mitchell admitted fabricating an undergraduate degree from Syracuse University. Though he resigned as chairman and forfeited his 2001 and 2002 bonuses, the company announced he would continue as CEO. The day the fabrication was announced, the stock price fell 37 percent, hitting a 52-week low.

What about the rest of the population? Resume lies are not unique to the executive suite. A May 2001 study conducted by Avert, Inc., a company specializing in background checks, found that 24 percent of the 1.8 million job applicants whose credentials were checked misrepresented their qualifications. The most common inaccuracies were misrepresentation of employment experience, job titles, or education. An online poll on the Monster.com website shows that over 27 percent of 555 online voters indicate that they committed "little lies" on their resumes such as claiming exaggerated job responsibilities, and almost 5 percent admitted to committing "big lies" such as inflating their grade point average or fabricating a job.

In today's wired world, individuals' track records are transparent and readily searchable. The errors of our youth are an indelible blot on our digital lives should someone choose to search the database that is our past. The executives caught with resume lies committed the infractions much earlier in their careers, and these fibs and lies became part of their record, migrating on their own. These executives had long ago lost control of the edit or delete keys.

The problem is compounded by our shifting tolerances. The public is less tolerant today of ethical transgressions that were overlooked in the past. Some corporations - mindful of the devastating market consequences of a breach of the public trust -- are willing to act decisively and aggressively to stem any hint of ethical impropriety.

But how decisively? What drove the board of MSG to remove the title of chairman from Brian Mitchell, but still retain him as CEO? The Bausch & Lomb board announced that the value Zarrella brought to the company and its shareholders was too great to summarily fire him, and therefore opted for a public slap on the wrist. True, the penalty to Zarrella was very expensive. But is that enough? Will Chairman and CEO Zarrella stand as a credible role model to his employees, and as a company ambassador respected by the outside world?

But back to resumes. First, never lie or inflate the details. Get it right, every time, because resumes will be accessed and remembered for the length of your life. Second, an executive's resume is not just a personal document. As part of the top management team, the executive and his representations will affect the integrity of the leadership team, an important component of the intangible assets of the firm. The market values intangible assets. Imagine - share prices tumbling just because an executive fibbed on a resume.