RadioShack's CEO Sacked Amidst Integrity Questions

RadioShack's CEO Dave Edmondson resigned on Monday after the press discovered false statements on his resume regarding his educational background. The company has hired executive search firm Spencer Stuart to find a replacement for Mr. Edmondson. Meanwhile, the board has appointed COO Claire Babrowski as acting CEO. Ms. Babrowski spent 30 years at McDonald's Corp., where she was senior executive vice president, chief restaurant operations officer and the highest ranking woman officer there.

The Texan paper Star-Telegram broke the news of Mr. Edmondson's inaccuracies last week Tuesday. And it quotes him today as saying:

"At this time, the board and I have agreed that it is in the best interest of the company for new leadership to step forward so that our turnaround plan has the best possible chance to succeed, as I know it will."

 

Mr. Edmondson did not quickly take responsibility for the errors on his resume posted on RadioShack's website. When caught, he continued to leave the impression that he may have fallen slightly short of his degrees in Theology and Psychology, even though his school declared that he only attended two semesters and didn't offer a psychology degree.

If one is going to be deceptive of one's educational background, it seems that throwing in a degree in theology adds credibility to being pure as the driven snow.

The Star-Telegram today quotes RadioShack's Chairman Len Roberts:

"This situation is especially painful, because Dave is a talented and dedicated individual who has made many contributions to the company," Roberts said in a statement, citing Edmondson's push to incorporate wireless products into its retail mix.

However, it was the same CEO who had great difficulty leading the company from Verizon cell phone carrier to Cingular and the complexities of operational implementation, which burdened RadioShack further with excess inventory and lower margins. It was also the same CEO who had three busts of driving while intoxicated.

After nearly a week delay, RadioShack has pulled Mr. Edmondson's bio today as well the biographies of its other officers -- no doubt to make sure there were not inaccuracies in either Mr. Edmondson's bio or the other corporate officers found that would create even more of a public relations nightmare.

RadioShack's franchised units are more profitable on average than the corporate stores. Hopefully, the company will listen carefully to its franchise leadership on strategic steps to pull its units to higher margins since they seem to have a better grasp on the business.