Stephen Foley: HP board acquitted itself well in scandal
Saturday 14 August 2010
US Outlook: What a feast! Mark Hurd's ousting as chief executive of Hewlett-Packard is providing rich pickings for public relations folk.
Jodie Fisher, the actress-turned-corporate hostess whose affections Mr Hurd ill-advisedly pursued, has one of Hollywood's most powerful attorneys touting her résumé. Mr Hurd himself has hired a crisis PR firm to downplay the sex-and-expenses scandal that felled him.
And now – inevitably – enter the lawyers. From the minute Mr Hurd's resignation crashed into the public domain, sending HP shares spiralling 10 per cent downward, the only question was: will the first lawsuit argue that the HP board was wrong to fire him, or wrong not to fire him sooner?
The law firm Scott+Scott, which appears to have been first to find a plaintiff, takes a scattergun tack, accusing the board first of letting Mr Hurd run a private fiefdom where hiring "a former reality TV contestant [with] no background in the hi-tech industry" went unchallenged, and then of misleading investors by failing to reveal the investigation into her claims of sexual harassment sooner.
Piffle, all of it. The HP board provided a model of good governance, properly investigating serious allegations, finding no violation of its harassment policy but picking up other misdemeanours. It rightly decided a chief executive cannot be seen to get away with something for which lowlier employees would be disciplined. Frankly, HP's only error was in allowing the market to believe, even for a few moments, that Mr Hurd personally accounts for 10 per cent of its value. Good managers are valuable – but not irreplaceable.
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