Samsonite’s board fired CEO Ramesh Tainwala for a self-inflicted injury—trying to get away with lying in a big data world.
Tainwala isn’t the first CEO to be terminated for inflating his resume. In 2012, Scott Thompson, Yahoo’s former chief executive, resigned after a private equity firm dug into his background and found a computer science degree claim but no diploma. If you’re a computer science major, you should know resume fabrications are the software equivalent of buggy code. They are going to catch up with you.
The shocker about Tainwala’s indiscretion is you don’t need a Ph.D. to be a CEO. So why take the chance? He justified his embellishment as if it were a mere nickname, according to a Wall Street Journal: “friends and colleagues jokingly addressed him as ‘doctor’ after (I) enrolled in the Ph.D. program.” Right.
But when the board read activist hedge fund Blue Orca Capital’s report that claimed Tainwala was falsely billing himself as a doctor of business administration from the University of Cincinnati, and had even introduced himself as “Doctor” in a 2011 earnings call, it was a yellow flag.
In terminating “Dr. Tainwala,” the board acted expediently and appropriately for several reasons. The board appears to have been considering his removal under pressure from the activist. The resume fabrication was a ‘casus belli’ or cause for termination as it was morally repugnant. When it comes to that kind of indiscretion, you don’t unsee them once they happen and it would have damaged if not destroyed his ability to lead the company. The board’s report, as quoted by The Wall Street Journal, confirms: “the board also takes seriously the allegation that has been made about his academic credentials, (and) the board thoroughly reviewed the facts related to this allegation and has determined that accepting Ramesh’s resignation is in the best interests of the company.”
“if you are guilty of embellishing, whether it’s an academic degree, a combat veteran’s record, or a problem with marital fidelity, seek some counseling.”
What should you or your board do if you lied on your resume?
This is the advice I offer to boards or CEOs when they ask for help with a personal matter or internal board disputes. To start with, legacy fabrications are the hardest to unwind because half or more of the databases contain the lie. It means if you tell the truth it appears to be a lie, and if you continue to lie, of course, you are lying. Which is worse?
By far, continuing the ruse is the most disastrous. That only plays into the hands of enemies and they are out there waiting, whether it’s a hedge fund, a former employee, or a disgruntled ex-spouse.
The remedy is to come clean but do it in a managed way, a strategic retreat. This means if you are guilty of embellishing, whether it’s an academic degree, a combat veteran’s record, or a problem with marital fidelity, seek some counseling. Perhaps there are mitigating circumstances. It may turn out you have a problem with esteem or self-image stemming from an underprivileged youth, and the world might relate to that.
If it’s time to fix the problem, remember that crises cost billions, apologies millions. You’ll need to go down on your knees begging forgiveness and perhaps to keep your job, but with one eye on the media meter telling you whether it’s time to stand up or get prostrate altogether. One never knows how the public is going to react to mea culpas, and the board is going to take its cues from the public. If it turns out your story is the modern day equivalent of Horatio Alger, you’re in the soup, if not, you are heading for the exit, but you were moving in that direction the moment you lied on the resume.
This is no time for a solo journey. Get the best reputation advisors you can and discuss the matter in detail with them, your family, your colleagues, and anyone who is going to come into the story. Because anything you know, the media will soon know, and they’ll track down every lead. You may think some people from your past won’t care enough to comment, but that’s foolish. Just ask Bill Cosby or Harvey Weinstein about old memories. When you put a mic in someone’s face, they start speaking. There is an entire industry living off scandal. Try not to be a profit center.
Once a plan is set, you go forward by divulging certain items to friendly media and while withholding from others (it’s the only incentive the media understands) until the entire story is out and there is nothing more to disclose. And be sure there is nothing more or the strategy fails. As my friend Warren Buffett says, “get the facts fact, get the news out quickly, get the drama over.”
The resume falsehoods don’t always end badly. The most famous credential burnisher was David Geffen, the billionaire entrepreneur (the G of Stephen Spielberg’s SKG DreamWorks, now owned by Amblin Partners), whose resume revealed his degree from UCLA, which helped him get a coveted mailroom job at talent agency William Morris. Only it was a lie. He even compounded the lie when the agency asked for proof, and (now working in the mailroom) he intercepted the letter of denial from the admissions office and replaced it with a bogus note attesting that he was, in fact, a graduate. But unlike most CEOs, Geffen brushed it off in an interview with Fortune as “It’s idiotic that you have to be a college graduate to be an agent … Did I have a problem with lying to get the job? None whatsoever.”