Is HP Board Partly to Blame for Hurd's 'Lack of Judgment'?

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HP CEO Mark Hurd's sudden resignation last weekend marks the first time the company has been the focus of a really big scandal since 2006, when the Patricia Dunn-led board of directors was raked over the coals -- and Dunn indicted -- for lax oversight of private investigators hired to discover the source of a boardroom leak.


Shortly after Dunn stepped down and Hurd took on board chairman duties in addition to his job as CEO, HP execs said they were glad for the mess because it gave them the opportunity to get the house in order in terms of ethics and oversight. At the time, CNET News reported Dunn's ouster resulted in "a host of tighter controls and processes."


Apparently those "controls and processes" weren't as tight as the board would have liked us to believe - at least where Hurd was concerned. The CEO who marshaled the company's return to the top after Carly Fiorina's exit was forced out after board members discovered he had falsified expense reports and showed "a profound lack of judgment" in hiding a relationship with a female marketing contractor.


Corporate governance expert Nell Minow told SiliconValley.com the HP board needs to take more responsibility for the situation. She said:

They obviously did not make it clear enough to him what their expectations were, or this would not have happened They did not evaluate the risk, and that's their No. 1 job.

At the same time, she does not agree with Oracle CEO Larry Ellison that Hurd should not have been ousted. She said:

If the board can't trust the CEO, he can't stay in the job.