If you’re going to fire a high-profile CEO, you couldn’t pick a better time than late on a Friday afternoon in mid-August. Wait until the market is closed, most journalists are at the beach, etc… a good plan, in theory. But the fallout will still find its way to HP’s front door, probably starting with Monday’s opening bell on the NY Stock Exchange.
By now I’m sure you’ve heard that Hewlett Packard asked CEO Mark Hurd to resign in the wake of fraudelant expense reports he filed, related to a somewhat fuzzy relationship he had with a marketing contractor. Sunday brought news that Hurd has reached a settlement with the contractor that will likely prevent any civil suits or harassment claims. No doubt, more details will surface soon, and this type of story will keep the business presses running for at least a week or so – until the next high level business scandal comes along.
What continues to baffle me is how these things get this far down the path. By most accounts, Hurd had done a great job of shaping HP for the future – he seemed to be in the top echelon of consistent “in for the long haul” CEOs who could be counted on by shareholders to oversee a great and enduring company. So why this small (but significant) speed bump? And why throw it down in front of your own smooth-running car? Why incur and submit fraudulent expense reports? Was this a crime of passion, or merely poor judgment? And if it truly was the latter (seems hard to believe) – where were the guardrails (chief of staff, administrative support, auditors) that could have called him on it early? Imagine someone pushing back or questioning the expenses the first time he submitted them – that might have been the time to say: “you’re right, let’s not have the company pay for that” – maybe that stops the whole sorted affair right there.
Look, I get that we all make mistakes… everyone’s human. Sometimes it really is ignorance of policies or rules, but often times it’s just plain poor judgment (blinded by another passion) hubris (no one will find out), or ego (I’m entitled). I don’t know which of these caused Mark Hurd to submit those expense reports, but I do know that it will cost him dearly (at least in reputation – I suppose the $28 million exit package will allow him to maintain most of his current lifestyle – but that’s an entirely different column).
Maybe the lesson for the rest of us is this – if you’re not sure about something related to work, ask your audit or compliance department to weigh in. Get a second opinion, man. Or, you know, maybe don’t do it in the first place, if it seems like it might be out of bounds. All of this leaves me wondering if Hurd is channeling George Castanza right now, who when caught in one of his countless schemes would say: “was that wrong? Because if someone had told me that kind of thing was frowned upon…”