dolution

Mark Hurd was CEO of Hewlett Packard from 2005 to late 2010. He resigned unexpectedly after it was revealed that he falsified expense reports in order to hide a personal relationship with Jodie Fisher, who had worked with HP as a marketing consultant. Fisher accused Hurd of sexual harassment, of which he was cleared after an investigation by the HP board. Fisher denied having a sexual relationship with Hurd. However, they were frequent companions at CEO executive summit meetings at resort areas where HP executives met to connect with the company’s top customers and woo potential ones. They regularly enjoyed long dinners together to wind down after a day of meetings. The board was reported to have terminated Hurd due to lapses in judgment that resulted from hiding the personal relationship with Fisher and falsifying the expense reports of company money spent on entertaining her. Hurd has promised to repay the expenses that were falsified. Some suggest that HP overreacted. Larry Ellison, CEO of Oracle, called the decision to fire Hurd “the worst personnel decision since the Apple board fired Steve Jobs many years ago.” Ellison later hired Hurd to be co-president of Oracle.

About the time Hurd was initially hired at HP, Boeing CEO Harry Stonecipher, who had come out of retirement to assume CEO duties, resigned after his affair with a female executive came to light. The woman did not report directly to Stonecipher, and the relationship was entirely consensual and had no impact on the woman’s career path. Though the code of conduct does not specifically prohibit relationships within the company, the board said that the relationship had violated the section of the code that addressed hurting the reputation of the company. The board held that the affair reflected poorly on Stonecipher’s judgment and “would impair his ability to lead the company going forward.”

Questions

1. What do you think is the connection between a person’s character in private life and his or her ability to lead an organization?
2. Do you think the departure of Mark Hurd from HP was justified? Why or why not?
3. Is Harry Stonecipher’s affair with a woman in the company enough of a reason to force his resignation? Defend your answer.