Much Ado About the HP Board

The business press loves a sexy story that it can milk indefinitely, and I guess the HP board of directors provided just the right fodder. Without rehashing the gory details, the bottom line is that a few board denizens, including now-ousted Chairman Patricia Dunn and current CEO Mark Hurd—approved some questionable, stupid, and probably illegal tactics in order to figure out which board member was leaking private board information to the press.

Okay, so it was a bit sleazy to hire private investigators to pretend to be board members calling the phone company in order to get copies of the (real) board members’ phone histories. But a “scandal”? Come on. This isn’t Enron with its off-balance sheet partnerships and fraudulent pronouncements to the investment community. It’s not the tobacco chiefs insisting under oath that their products were safe even as their own in-house data showed otherwise. This was a clumsy, Inspector Clouseau-type attempt to achieve a (legitimate) goal of plugging up leaks of (legitimately) private board conversations. Patricia Dunn is a very earnest person who was charged with finding out where the leaks were coming from, and she took her charge to an unfortunate extreme.

I suppose it makes sense that Dunn was dumped as Chairman, though the fact that she was so quickly tossed off the board altogether makes me wonder if she’s being unfairly targeted as the one and only scapegoat. (Remember, she refuses to take full and sole responsibility for this sordid little case).

But at the end of the day, who cares? It’s not like consumers, investors, and the capital markets were damaged. Some bigwigs on the board were embarrassed, and the company got some well-deserved egg on its face. But when a New York Times headline asks “As Scandal Unfolds, Will Customers Care?”, the answer is obviously, and rightly, no. The company’s product lines remain solid, customers see no reason to defect, and Mark Hurd—who admittedly doesn’t come out spotless in this somewhat seedy little tale—still deserves a lot of credit for cleaning up Carly Fiorina’s mess and raising HP’s stock price 72%--a level that’s held steady since the story broke.

Here’s my prediction: after some more posturing by bloviating politicians, the story will fade into oblivion, the small civil suits will be quietly settled, the HP board will become squeaky clean, and the press will move on to the next big non-thing.