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The ends do not always justify the means. It makes sense that HP wanted to put an end to press leaks that risked undermining the board’s ability to discuss sensitive information freely. But the methods used were unacceptable.
“Pretexting” – in this case accessing personal phone records under false pretences – is of dubious legality. But even if HP’s investigators skated within the laws of the time, allowing such underhand methods to be used was a colossal error of judgment.
Arguably, the investigation itself could do more to undermine boardroom trust than the original leaks. It sends a worrying message to any manager wishing to discuss a matter confidentially with a board member – that such contacts could face secret scrutiny. And it certainly does nothing for HP’s reputation.
The latest revelations come as HP is doing well as a business. But they highlight a history of board dysfunctionality. The board has lurched from the messy Compaq merger to the poorly handled firing of chief executive Carly Fiorina, through systematic board leaks to covert investigations of board members to a possible failure to release the correct filing when Tom Perkins resigned as a director. This time, the buck must stop with the chairman, Patricia Dunn. She has overseen Mark Hurd’s installation as chief executive. Her investigation, at a huge cost, should plug a leak. And she no doubt sought all the right assurances that the investigation was legal.
But she should have been extra careful about every step. What happened raises serious questions about her judgment. If she knew that such underhand investigative methods were being used, she should resign. If not, she needs a watertight explanation of why, given the sensitivity of the subject, she did not make it her business to know.
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