Case 5: Hewlett-Packard’s Secret Surveillance of Directors and Journalists Group Presentation Elvia Ortiz, Tabatha Thurman, and Justin Hysmith

Background Case on HP In 2006, Hewlett-Packard (HP) admitted it had hired outside investigators to spy on members of its board of directors and journalists to uncover the source of several leaks of confidential board deliberations. The investigators used methods, including "pretexting" (using an assumed identity in order to access others' telephone records), which were possibly illegal and almost certainly unethical. This case uses company s, internal reports, meeting minutes, and published memoirs and interviews to present various perspectives on HP's leak investigations, including those of its non-executive chairman, CEO, former CEO, board members, managers, and investigators.

Q & A’s

What was the problem or problems facing HP’s board of directors?

The number one problem that HP was faced with is that they were accused of pretexting. According to webster.com/dictionary/pretexting pretexting is the practice of presenting oneself as someone else in order to obtain private information. Newsweek published the initial scandal. Ten days after the story was released a hearing was called Subcommittee on Oversight and Investigations, and was held at the US House Committee on Energy and Commerce room. Our case study explains that HP and its board chairman, Patricia Dunn, had initially defended the company’s investigation of directors and journalist, saying aggressive efforts to ferret out the sources of leaks were fully justified. webster.com/dictionary/pretexting

What stakeholders were affected by the actions of HP’s board and chairman, and how were they affected?

David Packard and Bill Hewlett found HP in The company is broken down into four main units, focusing on information technology infrastructure, imaging and printing, business service, and personal computers and devices. The stakeholders in each unit were negatively impacted by the pretexting scandal. First off the embarrassment they felt for believing in such a well known trusted company, not to mention the sales by consumers drop tremendously by after the story was released. The leaks seemed to keep piling up against HP and many stakeholders, even the CEO, were brought into to speak out about the leaks.

Were the actions taken by HP’s chairman, legal department, and investigators to find the source of the leaks ethically justifiable, or not? What method or methods of ethical reasoning support your view?

At any given time unethical thoughts occur in everyone’s mind. Thinking about something and actually doing it are two very different things. People are constantly trying to justify their actions. Many often rate their actions on a scale of 1 to 10. For example one being taking home office supplies for personal use and ten could be as serious as embezzlement. As a group we have all made unethical decisions at our jobs. In the case study HP made a very poor choice thinking they would not get caught. As a group we commended them on justifying their faults, but what they did was still unethical. The decision to cut corners and get information caused harm to multiple people. Our group felt the HP broke the “golden rule” treat others the way you want to be treated. These investigators called other business lying to get information about people to us against other people. No one would want that information shared, especially against him or her.

How would you evaluate the actions of HP’s board of directors relative to accepted standards of good corporate governance? In your response, you may wish to consider the board’s structure, function, and process.

The function of a board of directors is to make the decisions based on the operation of the corporation. Having many directors help to add several opinions about the direction of the company and how to maximize its profits. Over the past several years, there have been many different types of people on the board at HP. With new board members come new ideas, sometime good and sometimes not so good. From 1999 to 2006, HP had 71 total directors. In evaluating their actions relative to their accepted standards of good corporate governance, I look at all aspects of the company. In my opinion, being employed by such a corporation, they have the right to gather numbers sent and received on company phones. With a court order, they can subpoena someone’s personal line for investigative measures if there is foul play suspected. I don’t think the actions of the investigator gathering information in the manner that he did is ethical. Lying to gather information under false pretense is not only unethical, but also illegal.

Put yourself in the role of Mark Hurd, as of the date of the congressional hearing of September 28, What actions would you take now, with respect to ethics, governance, and legal compliance.

Policies in corporations are in place similar to our nations laws of the land. Turmoil happens in every corporation that is in existence today to some extent, rather minor or major infractions, they can both determine the direction of the business that the corporation is headed. When things go terribly wrong and employees are terminated or are asked to resign, that aspect of the corporation has to be modified to prevent or hinder the same actions. After the hearing of September 28, 2006, with Hurd as CEO, his last statement in the preceding determined his future. The recognition of the problem in the corporation was evident to him. Gaining the respect, reliability, and trust from the employees will be the most difficult task that will present itself. I would concentrate on trying to prevent any more unethical behavior throughout the corporation. The board of directors has already made examples out of the parties involved with the unfortunate events that have unfolded. I would make appointments for committees to work on all compliance issues within the corporation. I would also make an attempt to implement training that would prevent these things from happening. As with every scandal or any unfortunate event within a corporation, things will move on, they will not forget, but they will move on.