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In congressional testimony almost four years ago, Mark Hurd, the CEO of computer and printer maker HP, told the House Energy and Commerce Committee that "if [company founders] Bill Hewlett and Dave Packard were alive today, they'd be appalled, they'd be embarrassed." At the time, HP was under fire for spying on journalists and board members in order to determine the sources of leaks to the press. The embarrassing incident had forced Patricia Dunn, the company's then chairwoman, to step down. She faced felony charges that were later dismissed.
If an espionage scandal would have shamed H and P then, how appalled would they be today? While Hurd escaped relatively unscathed from the spying affair -- he claimed no knowledge of the seedier aspects of the company's tactics -- he's causing consternation over a new issue. Hurd resigned on Aug. 6 as HP's chairman and CEO amid charges that he sexually harassed Jodie Fisher, a former actress and reality-television personality who worked for HP as a marketing consultant. Hurd settled the sexual-harassment claim with Fisher for an undisclosed sum, and Fisher has denied having an "affair or intimate sexual relationship" with Hurd, who is married. Though HP says Hurd did not violate the company's sexual-harassment policies, the company found that Hurd submitted inaccurate expense reports that concealed his personal relationship with Foster. These expenses totaled about $20,000, according to reports. HP also says Foster was at times paid for nonexistent work.
Hurd's abrupt departure stunned Silicon Valley. He took control of HP in April 2005, coming in as the staid, efficient antidote to ex-CEO Carly Fiorina, whose love of the limelight had worn thin on shareholders. (She engineered HP's tumultuous $24 billion merger with former rival Compaq and is now running for a Senate seat in California.) The hiring of Hurd, a relatively obscure CEO of a Midwestern ATM manufacturer, failed to inspire many analysts and shareholders. But he quickly exceeded expectations by shedding expenses -- he cut 15,200 jobs early in his tenure -- and stabilizing the company. Under Hurd's leadership, HP surpassed IBM as the world's largest technology company. "It's sad," says Bruce Kogut, professor of leadership and ethics at Columbia Business School. "One of the best CEOs in the country lost his job."
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