Much has been written about Hewlett Packard getting rid of its chief executive officer Mark Hurd for sexual harassment and putting in false expenses. When the story broke, I raised the question as to why Hurd hadn't been charged with fraud.
But Now Joe Nocera at the New York Times says the board had used the sexual harassment and expense claims as a pretext. They had other reasons for getting rid of him. Hurd, says Nocera, was such a vicious cost cutter that he had lost support of management, the board and everyone else at HP. In other words, Hewlett Packard directors are a bunch of cowards.
Nocera writes: "The consensus in Silicon Valley is that Mr. Hurd was despised at H.P., not just by the rank and file, but even by H.P.'s top executives…."He was a cost-cutter who indulged himself," was one description I heard. His combined compensation for just his last two years was more than $72 million – a number that absolutely outraged employees since their jobs were the ones being cut. Rob Enderle, a well-known technology consultant, noted that in recent internal surveys, nearly two-thirds of H.P. employees said they would leave if they got an offer from another company – a staggering number. "
Gordon Smith at the Conglomerate Blog puts it well when he says it amounts to a failure of corporate governance at HP. "This isn't the way the corporate governance system is supposed to work. The board is supposed to supervise the officers, make judgments about their performance, and act on those judgments. Traditionally, boards have not done this very well, often, we are told, because they are beholden to the CEO or because they just don't care enough. The HP directors didn't suffer from either of those shortcomings, and, to their credit, the directors acted. But if Nocera is right, their unwillingness to be forthright about the reasons for their action deprives us of an object lesson in good corporate governance and creates questions about their ability to lead the company in the future."
no comment untill now