Drip, drip, drip.
New revelations of bad, if not illegal, behavior by HP have been coming daily, and it’s finally starting to affect the computer and printer giant’s stock price, which fell 5 percent on Thursday.
Friday is D-Day for HP in the growing boardroom leak scandal.
After the markets close, HP CEO Mark Hurd is scheduled to lead a press conference to address the case, which so far has grabbed the attention of Congress, the California and U.S. Attorney General’s offices, and the Securities and Exchange Commission.
Until yesterday, Hurd had remained relatively unscathed in the scandal.
Outside agents working for HP used pretexting to gain reporters’ phone records and also suggested a scheme to infiltrate news rooms with spies posing as clerical or custodial staffs (indications are the latter was never carried out).
But e-mails between senior HP officials indicate Hurd was told, in some level of detail that’s not clear, of the progress of HP’s investigation of its board members and snooping on the press.
A story yesterday in the Washington Post quotes e-mails between senior HP officials the paper said it obtained.
Hurd was not a sender or recipient of any of the e-mails, according the paper, but there are references to the CEO approving various actions taken by the outside investigators.
HP has consistently said it was not aware the investigators engaged in pretexting and would not have approved it if it knew ahead of time.
Which brings us to Friday. What will Hurd, an operations wizard known for avoiding the spotlight, say at the press conference?
There’s plenty he could say, but I’m not expecting much. A notice about the press event sent to internetnews.com said there will a presentation by the law firm of Morgan, Lewis & Bockius, hired by HP, to provide information of its investigation of the leak.
It’s not quite the fox guarding the hen house, but I’d rather hear what an entity not hired by HP has to say.
I expect the firm will provide cover for Hurd who will defer going into much detail about what he knew and when, pending the completion of the law firm’s “investigation.”
For now, it’s not clear just how much HP officials got their own hands dirty. Still, it’s mind-boggling that such a large, established, well-respected firm would hire others to act so irresponsibly on its behalf.
“An effective risk management program starts with an appropriate tone at the top, but there’s evidence here [at HP] that that was not the case,” said Kirk Jordan, vice president and founder of compliance and ethics tools vendor Integrity Interactive.
“Companies have an obligation to train employees and members of the board,” Jordan told internetnews.com.
“Ultimately, the company is responsible for its acts and those of its agents, and whoever was specifically overseeing the investigation had a duty to make sure they were aware of and complied with ethics policies.”
Also, let’s get a little perspective here.
One of the things that reportedly infuriated Hurd was a news leak that HP planned to stop reselling Apple’s iPod under the HP brand, a short-lived program initiated by his predecessor Carly Fiorina.
Analysts questioned the move because it didn’t play to HP’s strength, leveraging its own technology to control production and design and maintain healthy profit margins.
Why go ballistic over a leak related to a not-long-for-this-world product line contributing little to the bottom line when there are more important issues facing the company’s turnaround strategy?
Listen up, HP. State and restate the company’s policy on talking to the press. Question those people whose actions you suspect are hurting the company. Discipline, suspend and fire as you see fit.
But don’t hire cowboy investigators with free reign to act any way they see fit. It didn’t work for the Nixon administration, and it didn’t work here.
David Needle is the San Francisco Bureau Chief for Internetnews.com.
