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September 07, 2006

Come Clean, HP

Peter Burrows

Having reported these past few days on the mess surrounding HP's investigation into board leaks to the press, I--like most others--am dissatisfied with the extent of HP's response. While the company has taken a leadership stance on many ethics-related topics over the years, this truly was a sad, damaging step in the wrong direction.

At this point, my reporting does not suggest Patty Dunn started out with some evil Nixonian scheme to consort with online scammers to illegally hack people's phone records. After all, said hackers probably checked her own phone records along with those of Tom Perkins. My reporting so far suggests she didn't know pre-texting had been done on HP's behalf until Perkins wrote to the board complaining about it in July.

Nevertheless, it happened, and HP can't wish it away or simply blame the private investigations firm that did the deed. And certainly, the argument that some insiders make that pre-texting was not technically illegal at the time just digs them a deeper hole. If HP really wants to regain the high-ground and protect its long-standing rep as an ethical company, it needs to come clean with as many details about what happened as possible. Who did the pre-texting, who knew they were doing it, and when did they know it.

No doubt, HP may not have that option at the moment, given that authorities such as the SEC to the California Attorney General are investigating the situation. But I hope at some point, that we hear an apology from HP. Personally, I think the board has become overly consumed with stopping press leaks in recent years, but that's not really the issue. If the board wants to investigate itself, I suppose its directors have that right; those not in favor have the right to resign.

Rather, if insiders are to be believed, the real mistake was one of reckless naivete. The company simply asked for guarantees that none of its hired investigators would engage in anything illegal or unethical--even though they'd been advised by counsel that there was no way of really assuring this.

Indeed, one director admitted that HP has learned a painful lesson. "We got representations from [investigators and their sub-contractors] that everything was legal, and they still tell us everything was legal. But what we should have done is find out specifically what methods they planned to use, and proscribe limits on what they could do. And not just related to what's legal, but what meets HP's own standards.”

The director said one more thing that made sense. "I would have liked to have seen everything come out [on this situation] all at once, so we could just move on."

That may not be possible now, but I couldn't agree more.

10:16 AM

Hewlett-Packard

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