Saturday, August 14, 2010

Hewlett-Packard's board vs. Mark Hurd: The right decision?

Hewlett-Packard's board vs. Mark Hurd: The right decision?

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From my vantage point, the board has performed its governance role admirably. Its action was particularly important because it expressed the character of the company and showed it is living up to the espoused values the leaders are legally and ethically bound to uphold. In this tragedy, the chief executive permitted his self-interest to override the greater interests of HP. The board made its decision based not on his personal failings but on his betrayal of corporate values.

The board's response sent a clear message that dishonesty and deceit will not be accepted at HP. Its decision to allow Hurd to resign and to keep his contracted severance package was humane. It acknowledged his record of excellence in his professional performance while conveying the unacceptability of misuse of funds.
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In announcing his resignation as chief executive of Hewlett-Packard, Mark Hurd said: "There were instances in which I did not live up to the standards and principles of trust, respect, and integrity that I have espoused at HP and which have guided me throughout my career." I have no way of knowing who wrote and approved that statement, nor whether the last phrase is true. But as an observer of how difficult situations are discussed publicly, I can say that Mark Hurd's statement is an impressive model.
There is no attempt to wriggle out of the accusations, nor to spread blame ( for example, on the media). And, importantly, Hurd praises a company that, even after the death of its founders and the unhappy tenure of Carly Fiorina, still occupies a privileged niche among major international corporations. In the past, when someone said that he or she worked for HP, it meant something special. The speed and manner of Hurd's resignation increases the likelihood that working for HP will continue to mean something special. Redeeming that likelihood is the challenge for the next leadership, thousands of supporting employees and, especially, the board.


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