September 5, 2006

wtf hp?

We've had some pretty amazing board-level dramas at my employer over the last several years, but this is baffling. Intrigue in High Places (Newsweek): "To catch a leaker, Hewlett-Packard's chairwoman spied on the home phone records of its board of directors".

The confrontation at Hewlett-Packard started innocently enough. Last January, the online technology site CNET published an article about the long-term strategy at HP, the company ranked No. 11 in the Fortune 500. While the piece was upbeat, it quoted an anonymous HP source and contained information that only could have come from a director. HP’s chairwoman, Patricia Dunn, told another director she wanted to know who it was; she was fed up with ongoing leaks to the media going back to CEO Carly Fiorina’s tumultuous tenure that ended in early 2005. According to an internal HP e-mail, Dunn then took the extraordinary step of authorizing a team of independent electronic-security experts to spy on the January 2006 communications of the other 10 directors-not the records of calls (or e-mails) from HP itself, but the records of phone calls made from personal accounts. That meant calls from the directors’ home and their private cell phones. (Link and emphasis added)

Wow. I guess our PR folks must be pulling an all-nighter in preparation for a lousy tomorrow. HP's going to be pilloried in the press and the blogs, that's for certain.

Update: The director who talked to CNet was George Keyworth, who has been on the HP board for the last 20 years.

More: From the SJ Merc article:

"Fundamentally, it is about accountabilty,'' said Ryan Donovan, a spokesman for the Palo Alto company. ``It doesn't matter whether you are a member of the board or a rank and file employee. We have standards of business conduct and if you violate those, there are consequences.''

Ironically, Donovan was speaking of Keyworth.

And yet more: The Smoking Gun has posted former director Thomas Perkins' letter to the board, and a letter from AT&T to Perkins detailing unauthorized accesses to his online billing records.

"I am hereby providing the Company notice that I consider the Company's Form 8-K filed on May 22, 2006, relating to my resignation to be defective because it did not describe my objection to and disagreement with the Company's operations, policies and practices as they relate to the chair's improper and likely unlawful investigation...

As the Company failed to make a full and accurate report (as required by federal law) and having given the Company several opportunities to correct the record, I am now legally obliged to disclose publicly the reasons for my resignation. This is a very sad duty. My history with the Hewlett-Packard Company is long and I have been privileged to count both founders as close friends. I consider HP to be an icon of Silicon Valley, and one of the great companies of the world. It now needs, urgently, to correct its course."

I find this situation extremely troubling. The very first paragraph of HP's Standards of Business Conduct states:

HP conducts its business with uncompromising integrity. Every member of the HP community—directors, executives, managers, employees and business partners—has a duty to comply with all applicable law and adhere to the highest standards of business ethics (emphasis added).

If Perkins' and Newsweek's allegations are true, then Patricia Dunn and any other members of the HP board or company that were responsible for these acts have done HP a grave disservice and they should stand down from the board. This is of course my own personal opinion and not that of HP. But I don't know how anyone could interpret this story as an example of "uncompromising integrity". Certainly, if I had done this to members of my team, there can be little doubt what the consequences would be.

Posted by Gene at September 5, 2006 11:17 PM | TrackBack