As a former HP employee, I’ve always had a soft spot for the company, and having worked on a project with Walter Hewlett and, to a lesser extent, David Packard, I feel like I have a fairly good sense of the spirit of the company, a spirit that Carly Fiorina certainly never had in her time as head of the company. Back in January of 2005 I was writing about how the HP Board was ready to fire Ms. Fiorina and how less than two weeks later Fiorina “quit” her job as chairman of the company.
I expected that we in the industry wouldn’t be free of the volatile Ms. Fiorina quite that easily but I never expected that the poison she brought to the Boardroom at Hewlett-Packard would still be affecting the company negatively 18 months later.
But details are just starting to surface about how her replacement, Patricia Dunn, hired some unethical private investigators who lied to obtain phone records (a process called “pretexting”) so that she could finally pin down who had shared the details of the Board meetings that deprived Fiorina of her job. Two board members are involved: George Keyworth, Board member since 1986 who was identified as the probable source of the leaks, and Tom Perkins, who quit the board in disgust over the situation.
The blogosphere’s just starting buzz about the situation, attacking Dunn for her tacit approval of illegal information gathering methods, including Valleywag, Paul Kedrosky and Robert Scoble. Only Kedrosky indicates that he has any sense of the historical context of the situation, however. Better coverage can be found in the WSJ with its superb summary piece [sub required] published last evening.
Let’s call things as they are: If indeed Keyworth was sharing confidential information with journalists and violating the sanctum and requisite confidentiality of the Boardroom, he was deeply in the wrong, and as someone who has served on many corporate boards and is a sporadic member of the National Association of Corporate Directors, I can tell you that violation of that confidentiality should always be grounds for immediate dismissal from any Board.
The information unearthed is of obvious importance in this situation, but let’s not lose track of the fact that, just as with a legal investigation, the method by which it was identified is equally important.
The irony? When the press started to feature stories about the HP Board deliberations regarding Fiorina’s performance, she reputedly flew into a rage and insisted that identifying the source of the leak was more important than even evaluating her poor performance. She got so worked up trying to identify the source of the leak, she missed the forest for the trees.
Fast forward 18 months and it certainly appears to me that her successor, Patricia Dunn, has fallen into the very same mistake, being so eager to finally identify the source of leaks from the Board that she hired private investigators who apparently used illegal tactics to run down the culprit.
But it doesn’t end there, if you can believe it. The next bit really requires some understanding of standard board committees, so you can see how the process was violated: when Dunn received report back from the investigators, she went to the head of the Audit Committee to talk about the situation, bypassing the correct committee to have been involved with the situation, the Nominating and Governance Committee. No wonder Perkins, head of that committee, was furious when things transpired.
The Journal explains: “As it became clear the board was going to ask Mr. Keyworth to leave, Mr. Perkins got angry. Directors say he defended Mr. Keyworth as a valuable and longstanding director, and said a “good man” was being trashed by the process. He also attacked Ms. Dunn, saying, “Pattie, you betrayed me. You and I had an agreement we would handle this offline without disclosing the name of the leaker.”
Astonishingly, this is all from a company whose core theme has always been defined by the next bench design philosophy and management by walking around, an open and egalitarian corporate structure inspired by the two founders over fifty years ago. It’s fallen a long, long way from there, sorry to say.
It’s time for a real chairperson to pull together a real Board of professionals who can lead this company out of the darkness that’s engulfed it for years now. Even with its solid financial results, a company that’s rotten in the Boardroom isn’t a company that has good long-term prospects.
I believe that Patricia Dunn should be fired for her role and knowledge of this situation and also agree with the departure of Keyworth, even if the way that he was identified was shockingly inappropriate.
Or is it just another day in the ethically shaky world of corporate America?