What Were They Thinking at HP?
Tuesday, September 19, 2006
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My feelings are hurt.
I wrote about all the turmoil of Hewlett-Packard. I wrote that the company was having a hard time competing with Dell and IBM and Sun Microsystems. I wrote that morale had sunk when the HP board of directors decided to replace the popular Lou Platt and hired Carly Fiorina to be CEO. I wrote about the controversy surrounding Fiorina's decision to acquire Compaq Computer and the problem in integrating the two companies which led to rigid resignations of many key managers.
So, did Hewlett-Packard spy on me? Noooo! Nine other journalists' working for newspapers, like The Wall Street Journal and The New York Times and the tech website CNET, were spied on by investigators hired by HP. Other targets included members of the HP board, HP's director of corporate media relations, Michael Moeller, and possibly CEO Fiorina herself. Investigators obtained their telephone records and may have followed some of them. Attempts were apparently made to plant "sniffer" programs on some of their computers to track keystrokes. But I was ignored and my feelings are hurt.
What were they thinking at HP? A company spying on its own board of directors? A company spying on journalists? Perhaps the most shocking thing about the Hewlett-Packard story is that it really isn't all that shocking. We live in a culture where information about everyone is floating around in the electronic databases of business and government. Our laws have done little to protect us. Businesses view the information as essential for marketing and lobby heavily to block restrictions on its use.
Much has been made of the fact that a member of Hewlett-Packard's Board of Directors, identified by the company as George Keyworth, leaked information about board deliberations to news reporters. Certainly corporate boards review confidential information, and it is in the best interest of shareholders to keep that information private. But what happens when the board is in disagreement with management? One might argue that leaking the information for publication is actually in the best interest of shareholders. Can the chairman of the board fire a board member? Can the board, by majority vote, fire a board member who has been elected by the shareholders? The law is not clear.
The chairman of the Hewlett-Packard board, Patricia Dunn, is going to walk the plank over this scandal, stepping down after the first of the year. Mark Hurd, HP's CEO, will assume the chairman's position at that time. So far, little has been made public about what Mr. Hurd knew and when he knew it.
Many have been shocked with the ease with which investigators hired by HP were able to obtain the telephone records of board members and reporters, apparently by representing themselves as the board members and reporters themselves. The term being used for this is "pretexting," as in "using a pretext." I love it when fancy words are used to lessen the shock of something simpler. Instead of pretexting why not call it lying? I know a lie when I hear it, and my mother taught me at a very young age not to do it.
As for the spying itself, HP's corporate counsel, Ann Baskins, apparently had in-house responsibility for the leak investigation. The company in SEC filings says it received an outside counsel's opinion that the investigative techniques were legal, but it is not clear who that outside counsel is and whether he has any conflicts of interest.
The moral of this story is simple. Just because something is not illegal doesn't make it ethical. And doing something that is not ethical can taint the image of a great company. I don't know what they were thinking, but then again they didn't ask me.
I do wish they'd spied on me though. It would look great on my resume.
