Ethical Leadership: Yahoo Inc. A good leader possesses a range of characteristics and skills that portray a positive outward image of his organization. Such a leader leads by example, and displays strong willpower in "making decisions, dealing with people, developing relationships, and enhancing careers" (Cantrell & Lucas, 2007). These characteristics are crucial to the growth, performance, and sustainability of any corporation. Recent years have seen numerous scandals, most involving Fortune 500 Company CEOs, which have had detrimental effects on the respective companies' financial performance. Experts attribute the inverse relationship between the two to the fact that the public is significantly responsive to unethical leader behavior (Cantrell & Lucas, 2007). Therefore, a CEO who attaches importance to, and practices ethical behavior would more often than not steer the corporation to success.

Scott Thompson, the former Yahoo boss, is a perfect example of a Fortune 500 Company CEO who displayed utmost ethical behavior. Thompson resigned from his position shortly after a piece of untrue information was discovered in his resume, in what came to be known as the 'resume scandal'. The unfolding event drove the media into a frenzy, and the company was accused of failing to properly scrutinize the information presented by job...

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Ethics and Productivity

Ethical leadership has a significant impact on a company's productivity, simply because character "is destiny, for organizations as well as individuals" (Cantrell & Lucas, 2004). During the period 2010-11, Yahoo experienced significant financial turmoil, which almost led to its collapse. The situation had been made worse by the entry of Face Book and Google into the cyber scene. The company had lost a significant portion of its market share during that period, and it was widely expected that Thompson's appointment, in January 2012, would change the situation. He resigned just four months later. Most people considered Thompson's resignation an ethical act. The company realized an end-year net profit of $3.9 million, an improvement of approximately $3 million from the previous year (Yahoo Finance, 2013). I am of the opinion that this improvement can partially be attributed to Thompson's resignation.

Crucial Decisions Made and their Effect on Profitability

With the discovery of the anomaly, Yahoo had to act fast in order to prevent further damage. The company appreciated the fact that people would naturally opt to do business with a company that observed ethics.…