Corporate governance experts backed Hewlett-Packard’s decision to oust its chief executive as questions emerged about the extent of the ethical lapses that led to Mark Hurd’s departure.
Cathie Lesjak, the computer maker’s interim chief executive, claimed on Sunday that investors and customers had been “extremely supportive” of the way HP’s board had handled the matter.
The departure wiped $10bn off the group’s share price on Friday as investors reacted to the loss of an executive credited with turning HP round and to uncertainty over its leadership.
Although the probe that led to Friday’s forced resignation was prompted by an allegation of sexual harassment, Mr Hurd was cleared of the claim after an investigation by HP. A lawyer for the woman, Jodie Fisher – a former actress who revealed her identity on Sunday via a statement from her lawyer – and another person close to the situation also said there had been no sexual relationship.
Different accounts have emerged of the extent of the expense violations and other alleged lapses that led the board to act.
HP said Mr Hurd’s departure was precipitated by “numerous” expense violations as well as his “close personal relationship” with the woman, who had acted as a marketing contractor to the group. It also alleged misuse of other corporate assets.
One person familiar with Mr Hurd’s position said he had had no more than “half a dozen” dinners with the contractor, and denied that the relationship had been inappropriate. This person put any expense violations down to mistakes, and said Mr Hurd had made no attempt to hide expense claims that involved the contractor.
HP’s handling of an earlier scandal involving “pretexting”, in which it accessed journalists’ personal phone records, has been criticised by experts in corporate governance. By contrast, the unfolding of its latest boardroom upheaval drew support.
“They handled it exactly as they should,” Charles Elson, director of the corporate governance centre at the University of Delaware, said. “Once trust is broken between a CEO and a board, it makes it harder to have confidence in anything he says in future. He had to go.”
Jeffrey Sonnenberg, a professor at the Yale school of management, said: “This board has shown the perfect balance of due process to investigate the case and then acting with speed and decisiveness.”
In an effort to put the disputed circumstances of Mr Hurd’s departure behind the company, Mike Holston, general counsel, said at the weekend that HP would make no further comment on the case.
Meanwhile, Ms Lesjak, who was elevated to chief financial officer by Mr Hurd, on Sunday sought to shift attention to the senior management team he had put in place. She acknowledged Mr Hurd’s track record at HP but said: “He doesn’t do everything – he was one person.”