Posted: Friday, 4 January 2019 @ 13:43
Over the weekend, the Telegraph writes
"Mr Hurd, chairman and chief executive of the world's largest personal computer manufacturer since April 2005, agreed to step down with immediate effect after he was found to have violated the company's own business conduct standards.
The HP probe was sparked following allegations from a former contractor, with whom Mr Hurd admitted he had a "close personal relationship". The company also said that Mr Hurd submitted false expense reports in an effort to conceal the relationship.
Michael Holston, HP's general counsel, admitted to Bloomberg that Mr Hurd had "demonstrated a profound lack of judgment", but the investigation, conducted by external lawyers and Mr Holston, found that he had not breached the company's sexual harassment policy.
Mr Hurd said: "As the investigation progressed, I realised there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP."
He is to be replaced as chief executive on an interim basis by Cathie Lesjak, HP's chief financial officer. A board committee, which includes Marc Andreessen, the founder of Netscape, and Larry Babbio, former president of Verizon, has been set up to find a permanent replacement, after Ms Lesjak ruled herself out.
Mr Hurd is believed to have come to a severance agreement ahead of his resignation, with speculation that he may receive as much as $40m. "
This fairly succint piece illustrates the dilemmas that I have repeatedly come across within corporate organisations.
1 The organisation has put themselves in a vulnerable position by allowing one individual to have too much power. e.g giving him the post of CEO and Chairman. Fine if it works in a business setting, but clearly this decison was a failure. Now HP has massive rebuliding work too do. It is possible that this crentralisation of power gave added impetus to the ego over Holston, and set him for his indiscretions.
2 Lack of Confidentialty. Let us be quite clear. This is not the first and will not be the last incident of a senior CEO/Chairman having an innappopriate sexual relationship with someone. It is perhaps a shame for all parties that lack of confidentality is a hallmark of this matter. Most firms are able to get some form of gagging order in place, but this is not the case here.
3 The two key parties win finanacially. The actress who made the allegations said that they had settled the sexual harassment lawsuit ,and it looks as though the CEO will get a nice golden goodbye.
Justin Patten, Solicitor