May 8 (Bloomberg) -- Patti Hart, the Yahoo director responsible for the vetting process in the hiring of Chief Executive Officer Scott Thompson, will not stand for re-election to the board at the company's next annual meeting. Bloomberg's Cory Johnson reports on Bloomberg Television's "Money Moves." (Source: Bloomberg) 
 
 Yahoo! Inc. (YHOO) board members met yesterday to review the academic record of Chief Executive Officer Scott Thompson, a person briefed on the plans said, as investor Third Point LLC stepped up pressure for his ouster. 
 
 The company formed a committee of three recently appointed board members to explore discrepancies in Thompson’s resume, said the person, who asked to remain anonymous because the meetings are private. An outside law firm is working with the committee, this person said. 
 
 Third Point, which is trying to win seats on Yahoo’s board and has said the company is mismanaged, last week highlighted errors in Thompson’s resume and demanded that he be fired. The fallout marks a setback for Thompson, who had just embarked on efforts to revive growth and help the company do a better job coping with challenges in online advertising and social media from Google Inc. and Facebook Inc. Yahoo’s board fired former CEO Carol Bartz in September amid falling sales. 
 
 The biography for Thompson, who joined Yahoo from EBay Inc. (EBAY) in January, listed a bachelor’s degree in computer science from Stonehill College, a credential that wasn’t offered until four years after he graduated, Third Point CEO Daniel Loeb said. 
 
 Yahoo’s board said last week that it would review the matter and “make an appropriate disclosure to shareholders.” The company had earlier called the discrepancy an “inadvertent error” and said it “in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies.” 
 
 Thompson’s Apology 
 
 Thompson, in a memo to staff yesterday, apologized for the fallout from the disclosures and said he takes “full responsibility.” He said he’s cooperating with the review. 
 
 “I want you to know how deeply I regret how this issue has affected the company and all of you,” Thompson said. “We have all been working very hard to move the company forward, and this has had the opposite effect.” 
 
 Dana Lengkeek, spokeswoman for Sunnyvale, California-based Yahoo, declined to comment. 
 
 Yahoo shares slid 1.5 percent to $15.11 as of 10:57 a.m. in New York. They had lost 4.8 percent this year before today. 
 
 New York-based Third Point demanded yesterday that it be able to inspect records related to Thompson’s hiring, as well as the appointment of director Patti Hart, whose credentials it also questions. 
 
 “Yahoo shareholders and employees will be best served if the board accepts responsibility quickly for this latest debacle,” Third Point said in a letter. “If the directors are truly interested in ‘working in a constructive manner with Third Point,’ they should provide answers promptly.” 
 
 Thompson has cut 2,000 jobs and overhauled management. The company’s shares had their biggest rally in almost four months on April 18 after Yahoo reported first-quarter sales that topped estimates, fueling optimism that turnaround efforts may take hold. A day earlier, Yahoo reported its first revenue gain in more than three years. 
 
 The appointment of the special committee and work with a legal firm was reported yesterday by the Wall Street Journal. 
 
 To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net 
 
 To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net. ||||| Article Excerpt 
 
 Yahoo Inc.'s board is moving forward with an investigation into how its chief executive's academic credentials were misstated in company regulatory filings. 
 
 The board, which met on Sunday and Monday, has created a special three-person committee to investigate the matter and is hiring an outside law firm to help oversee it, said people familiar with the situation. The committee's trio are all newcomers to the board. 
 
 The board is struggling with the question of how CEO Scott Thompson didn't notice the mistaken information in his publicly-available biography for so long, said the people familiar with the matter. 
 
 Yahoo's filing in ... ||||| Exclusive: Yahoo Director in Charge of Botched CEO Vetting to Step Down From Board 
 
 CSLie has claimed its first victim, although the mystery is still unsolved. 
 
 Patti Hart — the Yahoo director in charge of the search that resulted in the hiring of Scott Thompson as its CEO, making her directly responsible for a clearly botched vetting of his academic record — will not stand for re-election to the board at the next annual meeting, according to sources close to the situation. 
 
 Hart — who is CEO of International Game Technology, which makes electronic gaming equipment and systems products — is resigning. Apparently, said sources, her own board asked her to remove herself from the Yahoo mess to better focus on the company she actually runs. 
 
 But she is perhaps just a few steps ahead of being pushed, given her key role in the hiring of Thompson, who was president of eBay’s PayPal payments unit when he cold-emailed Yahoo director and Intuit CEO Brad Smith seeking the job. 
 
 A Yahoo spokesman declined to comment. 
 
 [UPDATE: Yahoo confirmed the inevitable departure later in the day and said the Yahoo board would have nine members going forward. Hart also released a statement, confirming the move.] 
 
 Hart, who came to the Yahoo board in 2010, has been head of its corporate governance and nominating committee. 
 
 The departure makes her the first casualty — but definitely not the last — of the controversy over how a fake college degree managed to get in Yahoo’s regulatory filings via Thompson’s inaccurate bio. 
 
 The issues around how Thompson was hired — including how background checks on him failed to discover that he never got a CS degree from the Boston area’s Stonehill College, as his longtime bio on eBay had claimed — are part of a new investigation by the board. 
 
 That will be officially announced later today, along with the hiring of an outside law firm to conduct the probe, which will be headed by independent director Fred Amoroso. 
 
 [UPDATE: Yahoo officially said it was forming a special committee to look at Thompson’s bio snafu and the circumstances around his hiring. Along with Amoroso, the other members are John Hayes and Thomas McInerney, independent directors who joined the board in April. 
 
 “The special committee and the entire Board appreciate the urgency of the situation and the special committee will therefore conduct the review in an independent, thorough and expeditious manner,” a statement from Yahoo said. 
 
 Interestingly, the statement did not include a show of support for Thompson, which often happens in such circumstances.] 
 
 They will have a lot to investigate. Such as this mystery: Thompson’s correct bio appeared in filings eBay made with the Securities and Exchange Commission, while Yahoo’s similar documents were inaccurate about his educational credentials. 
 
 Also under scrutiny: How the falsehood was added to Thompson’s public resume, and who put it there; why Thompson never noticed the error, there since at least 2004; why he declined to correct it when asked directly about it; and who at Yahoo might have known about the problem before the hiring. 
 
 It’s a basic case of who, what, where, when and how. And, most of all, why anyone would make such a dumb mistake. 
 
 Hart would seem to have all the answers to that, along with a forensic firm that worked on the vetting. Key Yahoo staffers were also involved, said sources, although its headhunting firm on the CEO search, Heidrick & Struggles, was not used in relation to Thompson. 
 
 Presumably, there is a paper trail of some sort, which was the subject of a legal demand by activist shareholder Daniel Loeb of Third Point yesterday. He uncovered the bio error last week, in the middle of pressing a proxy fight to garner board seats. 
 
 Loeb’s allegations also nailed Hart in much-less-egregious padding of her own college record, making it appear as if she had economics and marketing degrees. She has one in business administration, with “specialties” (Yahoo’s ridonkulous word, not mine) in economics and marketing. 
 
 While Hart’s leaving might assuage some, providing a convenient scapegoat to the bizarre situation, this is by no means over for Yahoo or Thompson. 
 
 Another increasingly potent issue is the ever-declining morale at the Silicon Valley Internet giant over the company’s odd response — it initially called the bio problem an “inadvertent error,” without further explanation — and also Thompson’s lack of transparency on the issue. 
 
 He released an email to employees last night, apologizing for the “distraction” of the resume issue, but not for the error itself. 
 
 That, and other of Thompson’s actions — he has been described to me, by many close to the situation, as defiant over the issue, and as blaming Loeb for conducting a personal vendetta — did not sit well with many, both inside and outside Yahoo. 
 
 A Yahoo spokeswoman told me earlier this week that there is much support for Thompson internally and externally, but declined to provide specifics. 
 
 But message boards I read were mostly negative about him, as are a plethora of direct emails to me on the situation. One clever commenter on this site bemoaned that Thompson might get off “Scott-free.” 
 
 Ouch! Nonetheless, the atmosphere at Yahoo is indeed unsettled. 
 
 “Sentiment from employees is unanimous that he must go,” said a Yahoo employee, who has no personal agenda that I can grok, in a common refrain. “He clearly knew and lied for years; and his handling since exposed has been unacceptable.” 
 
 Unacceptable or not, though, Hart is the only one going for now. But stay tuned. 
 
 Until then, here’s an appearance I made today on WSJ.com to talk about Hart’s departure:
– Yahoo’s board is investigating the mess surrounding CEO Scott Thompson’s inflated résumé, and is hiring a law firm to oversee the matter, the Wall Street Journal reports. After shareholder Third Point LLC discovered Thompson has only an accounting degree, rather than a degree in computer science and accounting as his bio stated, the investor set yesterday as the deadline for Thompson’s ouster. When that deadline passed with Thompson's head still intact, Third Point demanded Yahoo allow it access to documents related to Thompson’s recruitment and vetting, the BBC reports. The committee investigating the matter will attempt to determine whether anyone at Yahoo knew about the errors in Thompson’s bio. While the same incorrect information was also available on his PayPal bio, regulatory filings by eBay and other companies where Thompson sat on the board did not include the misinformation and referenced only his accounting degree. Third Point also alleges that director Patti Hart (who was instrumental in getting Thompson hired) misrepresented her degree, and it called for her to resign from the board. She said today that she wouldn't stand for re-election at Yahoo's next annual meeting, notes the AllThingsD blog. Thompson, meanwhile, apologized to employees in a memo yesterday, taking “full responsibility” but not revealing how the error occurred, Bloomberg reports.