INDUSTRY
HP chairwoman to step down after spying scandal
Hewlett-Packard said on Tuesday its chairwoman Patricia Dunn was stepping down after the computer maker become embroiled in an espionage scandal that has sparked legal investigations. Dunn, who is to resign early next year, apologized after private detectives that she had hired to investigate boardroom leaks to the media "went beyond" their mandate.
HP said that its chief executive officer and president, Mark Hurd, would succeed Dunn as chairman at a board meeting on January 18. Dunn will continue to serve as a director. The California state attorney general's office and federal prosecutors are investigating whether the private eyes hired by HP broke the law by impersonating board members and journalists to get private telephone records. The company said it was "cooperating fully" with the inquiries but Dunn has denied authorizing illicit tactics. "Unfortunately, the investigation, which was conducted with third parties, included certain inappropriate techniques," she said in a statement announcing her departure. "These went beyond what we understood them to be, and I apologize that they were employed." The world's second-largest personal computer maker now faces a new period of top-level change after Dunn, 53, had steadied the ship following the stormy 2000-2005 chairmanship of Carly Fiorina. Unlike its bigger rival Dell, HP has posted strong earnings growth this year and its share price has climbed about 30 percent since Fiorina's departure. HP's board met over Sunday and Monday to decide Dunn's fate as the scandal escalated. She had hired the detectives to ferret out who had been leaking information from board meetings to the press. The private investigation identified a board member as the suspected leak, but did so by getting telephone records with a ruse known as "pretexting," calling the telecom company and posing as customers. While no law on the California books specifically outlawed "pretexting," state prosecutors believe the deception violated laws regarding identification theft and unauthorized access to computer data. Silicon Valley venture capitalist Thomas Perkins, who resigned from the HP board in protest at the deceptive leak probe tactics, had called for Dunn to resign. Dunn has claimed that Perkins advocated strong investigative techniques such as lie detector tests, and that his change of heart came only after the leaker was fingered as his friend, George Keyworth. Hurd promised a clampdown. "I am taking action to ensure that inappropriate investigative techniques will not be employed again. They have no place in HP," he said. "The company will work to put these matters behind us so that we fully resume our focus on the business and continue to earn the trust and support of our customers, employees and stockholders," Hurd said. Dunn insisted the investigation that she launched was merited, even if the subsequent tactics were not. "These leaks had the potential to affect not only the stock price of HP but also that of other publicly traded companies," she said. "I am very proud of the progress HP has made over the past 18 months," Dunn added, promising an orderly transition and "to improve our corporate governance standards" during the remainder of her term. California Attorney General Bill Lockyer has vowed to prosecute wrongdoers at HP at the end of his investigation. "We believe a crime has been committed and we are just trying to find out who did it," Lockyer spokesman Tom Dressler told AFP on Friday. "We are aggressively pursuing it."
HP said that its chief executive officer and president, Mark Hurd, would succeed Dunn as chairman at a board meeting on January 18. Dunn will continue to serve as a director. The California state attorney general's office and federal prosecutors are investigating whether the private eyes hired by HP broke the law by impersonating board members and journalists to get private telephone records. The company said it was "cooperating fully" with the inquiries but Dunn has denied authorizing illicit tactics. "Unfortunately, the investigation, which was conducted with third parties, included certain inappropriate techniques," she said in a statement announcing her departure. "These went beyond what we understood them to be, and I apologize that they were employed." The world's second-largest personal computer maker now faces a new period of top-level change after Dunn, 53, had steadied the ship following the stormy 2000-2005 chairmanship of Carly Fiorina. Unlike its bigger rival Dell, HP has posted strong earnings growth this year and its share price has climbed about 30 percent since Fiorina's departure. HP's board met over Sunday and Monday to decide Dunn's fate as the scandal escalated. She had hired the detectives to ferret out who had been leaking information from board meetings to the press. The private investigation identified a board member as the suspected leak, but did so by getting telephone records with a ruse known as "pretexting," calling the telecom company and posing as customers. While no law on the California books specifically outlawed "pretexting," state prosecutors believe the deception violated laws regarding identification theft and unauthorized access to computer data. Silicon Valley venture capitalist Thomas Perkins, who resigned from the HP board in protest at the deceptive leak probe tactics, had called for Dunn to resign. Dunn has claimed that Perkins advocated strong investigative techniques such as lie detector tests, and that his change of heart came only after the leaker was fingered as his friend, George Keyworth. Hurd promised a clampdown. "I am taking action to ensure that inappropriate investigative techniques will not be employed again. They have no place in HP," he said. "The company will work to put these matters behind us so that we fully resume our focus on the business and continue to earn the trust and support of our customers, employees and stockholders," Hurd said. Dunn insisted the investigation that she launched was merited, even if the subsequent tactics were not. "These leaks had the potential to affect not only the stock price of HP but also that of other publicly traded companies," she said. "I am very proud of the progress HP has made over the past 18 months," Dunn added, promising an orderly transition and "to improve our corporate governance standards" during the remainder of her term. California Attorney General Bill Lockyer has vowed to prosecute wrongdoers at HP at the end of his investigation. "We believe a crime has been committed and we are just trying to find out who did it," Lockyer spokesman Tom Dressler told AFP on Friday. "We are aggressively pursuing it."