The LA Times had an article yesterday in the Business section concerning Mark Hurd’s departure from HP. The reporters bemoaned the decision and wondered whether the directors acted rashly and just a little too hasty. HP is now “rudderless.” Its stock plunged almost 10% in late trading on Friday and didn’t regain much of that on Monday. For a large corporation, this would make investors and employees alike uncertain of HP’s future. Investors and analysts apparently questioned whether his departure was necessary at all. I can see how this would be a conundrum for their board of directors.
Mark Hurd was much respected in the business world and many business leaders and analysts think his leaving was a vast mistake. He took a company 5 years ago, after Carly Fiorina’s departure, and nearly doubled its market value. From a purely financial viewpoint, throwing Hurd out the door because of a sexual harassment suit that didn’t violate HP’s own sexual harassment policy, in light of all that he had done for HP, was not a wise business move. The article stressed this angle of the story but didn’t really explore the falsified expense reports, mentioning them in fact only once.
I know that I am not very business savvy but isn’t this lying and cheating? Is this not a firing offense? Forget the girl. If any other employee cheated on expense reports for thousands of dollars, they would be canned and rightfully so. This was money that should have been used to benefit lots of employees in the company, not just one person. When part of employee benefits includes a bonus, this is also stealing from every employee who got one or should’ve gotten one.
Look at the ethics of the man leading this large corporation. Regardless of his personal relationship with this woman, he violated HP’s own Standards of Business Conduct. Every year, every employee is required to take a course on this subject so it’s not like he could claim ignorance. He chose to lie and cheat. If he would do so on this, what else would he lie about and how else would he cheat? He broke a trust with every employee if he thought the SBC is for the masses but not for him.
So what were the directors to do? Should they overlook what Mark Hurd did and also lose the trust of every HP employee? Should they retain him so HP doesn’t lose its market value, not to mention the PR nightmare? Should they fire him and prove to the world that they are a stand-up, ethical company, even though it might be financially detrimental? What should the HP Board of Directors do? I can see how this would be a conundrum for them. Did they make the right decision? Time will tell, but it is refreshing to see ethics win out occasionally over money.