Monday, August 09, 2010

HP boss pays for an indiscretion

HP boss Mark Hurd's ouster as CEO is a case of a board setting unusually high standards. In an earlier era, these standards may even have been regarded as puritanical.

Hurd was ousted by the board for what appears to be a minor indiscretion, according to an FT report. Hurd was accused of sexual harassment by a woman contractor. To his credit, Hurd promptly handed over the letter to the company's general counsel who took it to the board. The board's investigation found no evidence of sexual harassment but believed that Hurd had fiddled with expense statements to conceal his meetings with the contractor.

The amount involved was $20,000 over a two year period. This was considered a sufficiently serious ethical lapse to fire one of America's best-performing CEOs. Of course, it is possible that the board also believed that if it dug deeper, it might uncover worse.

Hats off to the board of HP- not many boards would have taken such a tough line. Partly, the tough line shows the extent to which boards themselves are under close scrutiny in the US.

4 comments:

kmohan said...

Then what happened to Warren Anderson.Did the board fire him on Bhopal...Dont publish such rubbish and justify it

Anonymous said...

well said, K Mohan.

Raju

Anonymous said...

There are reasons and there are reasons. More recent reports suggest that firing Hurd may have more than just fudging expense report.
E.g.
http://www.nytimes.com/2010/08/14/business/14nocera.html?pagewanted=1&ref=business&src=me

Indeed it seems laughable that a CEO of a >$100 billion company would be fired for fudging expense reports of $20000 and then letting him go with a huge severance pay ! Some of the severance pay might have been in the contract, but surely a well written contract would protect the company's interest in the case of ethics violations, not the CEOs.

As the article says, "
The world is full of imperfect people; if everyone who ever fudged an expense report or flirted with an outside contractor were fired, there wouldn’t be many people left in the American work force. "
http://www.nytimes.com/2010/08/10/technology/10hp.html?partner=rss&emc=rss

It looks like a typical boardroom coup.

Sridhar

Stela James said...

ya you are right this seems me not fair.
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