Reports show HP was right to dump Hurd

commentary Mark Hurd's career skyrocketed after he turned HP around, but two new reports illustrate how his reckless behavior involving a former actress endangered his company's reputation.

commentary Mark Hurd is now a Silicon Valley symbol for self-destructive behavior.

On Friday, The Wall Street Journal and Fortune magazine published detailed reports on what prompted the HP board to ask then-CEO Hurd to resign in August . The stories paint a picture of a reckless man who was given the trust and support of HP's board only to repay that trust with betrayal.

According to a report in The Wall Street Journal, B-movie actress Jodie Fisher, who accused former HP CEO Mark Hurd of sexual harassment, also alleged Hurd touched her body in 'sexually suggestive ways.' The man whose face is obscured is not Mark Hurd. Jodie Fisher's Facebook page.

The reports should finally silence the critics who slammed HP's board after Hurd was forced out of HP, after five years as CEO. Up to now, we knew few details about what led up to Hurd's ouster, outside of the allegations that he lied on his expense report and was accused of sexually harassing Jodie Fisher, an HP contract employee and former actress. The Journal and Fortune stories flesh out many more details that seem to support the board's choice for firing Hurd. They really had no choice.

But make up your own mind. Read the Fortune and Journal stories and put yourself in the shoes of HP's directors. Imagine one day that Hurd, your CEO, tells you he's been accused of sexual harassment and that he's innocent of all wrongdoing. Then he tells you the accuser is a former soft-core porn actress hired by him to greet important clients at company mixers and that he has flown her all over the country for two years on the company's dime.

He has done all this even though she occupies a low-level public relations position at HP and has little prior experience.

Imagine that the woman, Fisher, who once appeared nude in Playboy and in several B-movies, has accused the CEO of touching her body in sexually suggestive ways. You learn that Fisher has hired attorney Gloria Allred, famous for her ability to stir public outrage against those her clients accuse of misconduct. Then imagine that with the threat of scandal looming, investigators find evidence that he lied about some of his contacts with Fisher and that he didn't know about her past in racy films. Do you believe him when he denies having sex with her despite knowing he has met her twice alone in her hotel room, and on several other occasions for reasons not related to work?

Mark Hurd denied any wrongdoing in his dealings with Jodie Fisher and later lashed out at the HP board. Stephen Shankland/CNET

Maybe you chuckle nervously when informed the former actress wasn't hired from among HP's legion of experienced PR reps or through an employment agency but was recruited by one of Hurd's underlings who saw her compete on a reality TV show. On the show, older women compete against younger women for the affections of a tennis pro. Is this a recruiting pool worthy of HP?

Maybe you start to get really nervous when you learn the actress has claimed the CEO told her about HP's plans to acquire Electronic Data Systems months before the deal was done. A question might flash into your mind as to whether the information was true and, if so, whether Fisher or someone connected to her traded stock as a result. Amid all this, you learn your CEO also filed false expense reports, some of them related to contacts with Fisher.

Sooner or later, your mind is likely to drift back to another incident where Hurd's flexible ethics helped drag HP into the most reputation-blackening scandal in company history.

In 2006, HP's chairwoman, Patricia Dunn, elected to plug news leaks coming from the company's boardroom by hiring detectives to ferret them out. She OKed the use of some dubious investigative practices, some of which are now illegal, to hunt down the leaks. Hurd acknowledged giving his approval to some of these practices as well as to the overall investigation. Dunn resigned and HP had to suffer through embarrassing public hearings on Capitol Hill.

This is where you might ask yourself some basic and reasonable questions: Wouldn't a guy with any kind of judgment or moral compass have steered HP away from the lamebrain spying activities? Shouldn't the CEO of the country's largest tech company have enough smarts to avoid the kind of relationship he had with Fisher? Even if it were innocent, he put himself and his company into a compromising position.

Then there are the expense reports, the tales about being unaware of Fisher's background, and the apparent attempts to cover up his relationship with her. Wouldn't you ask yourself, if this guy is capable of this kind of deceit, what else is he capable of doing?

In that situation, you might ask what would happen if you looked the other way and kept him on as CEO, and then he later committed some other, more harmful misdeed. You would know that this Fisher fiasco would come out and you'd be on the hook for not doing anything about him sooner.

Don't you think all the people who lost their shirts on Enron stock wish the board there had done something sooner about founder Ken Lay? In the late 1980s, years before the company collapsed, Lay prevented investors from learning about $100 million in losses. The board gave him another chance. Lay repaid them by leading Enron into one of the country's largest accounting frauds.

Does a board have to wait for an investigation by the Securities and Exchange Commission or for a CEO to be indicted before determining he's not morally fit to run a company? If so, isn't that the kind of inaction that boards have been criticized for in the past and the stuff that investor lawsuits are made of?

I hope HP's board is an example to others. A company shouldn't let some guy with a string of positive quarters under his belt ignore the rules--for his sake, as well as the sake of investors.

 

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