In August, Joe Nocera of the New York Times tossed out quite a few negative assessments of the HP boardâ€™s firing/resignation of former CEO, Mark Hurd, to wit:
When pressed, H.P. said that Mr. Hurd had fudged some expense reports. (It also said that his relationship with the woman, a small-time H.P. contractor, was a conflict, even if no sex was involved.)
H.P. says its board should be applauded for not letting Mr. Hurd off the hook. But this is just after-the-fact spin. In fact, the directors should be called out for acting like the cowards they are. Mr. Hurdâ€™s supposed peccadilloes were a smoke screen for the real reason they got rid of an executive they didnâ€™t trust and employees didnâ€™t like.
Â So instead, it ginned up a tabloid-ready scandal that only serves to bring shame, once again, on the H.P. board.
However, a Wall Street Journal investigation brought out information that would have backed any board into the â€œhe has to goâ€ corner.Â A November 6, 2010 article in the Journal (â€œAccuser Said Hurd Leaked an H-P Deal,â€ (Robert A. Guth, Ben Worthen, and Justin Sheck) reveals the following:
- Jodie Fisher, the vendor who came calling at H-P headquarters with attorney Gloria Allred, alleged that Mr. Hurd disclosed that H-P planned to buy EDS;
- Mr. Hurd told investigators for the company that he did not know Ms. Fisher acted in adult movies, but said investigators found that Mr. Hurd had visited Web sites that featured Ms. Fisherâ€™s pornographic scenes: â€œerotic4u.comâ€ was one the gumshoes found on his computer.;
- Mr. Hurdâ€™s expense claims listed his dinner guest as his security guard, Denis Lynch, when his dinner guest was Ms. Fisher, and Mr. Lynch told investigators he was nowhere near the claimed dining sites;
- Mr. Hurd told the investigators at one point that he did not know Ms. Fisher well, but then later indicated that the two had a â€œvery close personal relationship.â€; and, well, it is too painful to disclose more.
One can understand why the HP board would utter a collective, â€œYikes.â€ Some insights all around:
- Pundits andÂ Larry EllisonÂ sometimes donâ€™t have all the info — The HP boardÂ was gracious enough to help Mr. Hurd save face with the expense account explanation and few details on what truly was conduct unbecoming a leader.Â Joe Nocera and Larry Ellison jumped on the board without full information. Â Mr. Ellison wrote in an e-mail, “The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.” Â One big distinction is that Mr. Jobsâ€™s departure was over strategic disagreements â€“ those happen and they are under the business judgment rule. Reasonable minds can differ and be wrong. Reasonable minds should not differ on issue of trust and HPâ€™s board faced an issue of trust (see below). How interesting that some folks got it right from the get-go, even without the November revelations about the details of the Hurd investigation.Â With their wisdom about human nature, their business experience, and their understanding of the components and characteristics of long-term survival, the Barometer, leadership professor A. Allan Lind of Duke, David Costanza, OB professor at George Washington, and Paul Hodgson of Â Corporate Library all understood that the HP board knew more that was not being disclosed and also realized that what was disclosed by that board was sufficient in and of itself for resignation/termination because of the impact of the indiscreet conduct on the company culture ;
- Trust, once lost, is difficult to regain and a queasy board canâ€™t work with a CEO who has lost the boardâ€™s trust;
- This stuff comes out â€“ despite the debate among board members of â€œTo disclose or not to disclose,â€ it was not their call to make.Â Natural forces are in charge of information, particularly juicy stuff.Â Remember the Hellâ€™s Angelsâ€™ motto, â€œThree people can keep a secret if two are dead.â€ And if Gloria Allred is involved, the secrets are coming out sooner. Their aborted explanation resulted in the Nocera assessment and too many unanswered questions. Take your pain now or take it later, but bad news will percolate to the surface;
- Mr. Hurdâ€™s assistant should have thrown down the penalty flag on the dinners that she set up in order to save her boss.Â Her e-mails to Ms. Fisher demonstrated her knowledge of the arrangements and served to provide the set-up for questioning expenses that listed Mr. Lynch as the dinner companion.Â She knew otherwise. Employees donâ€™t want to â€œsnitch,â€ but they may be saving their bosses from themselves;
- The cover-up is always worse than the misstep.Â We are an enormously forgiving nation.Â If you say you have made a mistake, who wouldnâ€™t help you through a misstep?; and
- The same observation the Barometer makes for all of these leaders who have activities on the side:Â How do they have the time for this?Â You shouldnâ€™t have time to run a company, have a family, and date someone who is not part of that family! Imagine if an employee had visited the â€œerotic4u.comâ€ site and landed on 30 different pages there?Â Sack city for using work time to surf the net.