I love HP
And you thought that HP breathed so slowly that it was almost dead. A bizarre story by Newsweek, reveals that HP chairperson, Patricia Dunn, hired investigators to find out which Board members had leaked a story to CNET. The consultants did as she asked, identifying the leaker, who admitted it at a subsequent board meeting when confronted by Dunn. The problem was the investigators fingered him by acquiring his phone records, proving that he had been in contact with reporters.
The records were gotten by a technique known as "pretexting." It's also known as lying.
In pretexting, the interested person contacts phone companies, credit card firms or even government agencies and misidentifies themselves as the subject . If they can successfully convince the bored, minimally paid customer service rep on the other end of the phone that they are actually who they are pretending that they are, then they usually get the information; in this case, they had phone records for HP board members shipped off via email to a Yahoo email address that appeared to not have any connection with the person who owned the account.
The board member has so far refused to resign, but another member, Tom Perkins, the co-founder of venerable and hoary Silicon Valley firm, Kleiner-Perkins did. Citing unethical behavior by Dunn, he resigned and is right now embroiled in a governance brouhaha about whether HP has to file his reasons for leaving with the SEC.
It's not completely clear whether or not this type of behavior is legal, but formore discussion, look at the Newsweek article.
What's most interesting to me is not the legality of the actions because that's for the courts to decide.
It's also not Dunn's motivation because I understand that. She was furious at the leaks and felt powerless to do anything about it. It's natural for type A predators that end up in power positions like that to reach outside the organization and hire someone goal-oriented to fix the problem.
What's interesting to me is the way that the people involved used a lifetime of exposure to ethics to react in the situation. The leaker may be a hero or may be a worm...it depends on his or her motivations. Dunn showed a remarkable lack of anything that I would normally call ethics, not realizing that her aggressive behavior tainted the company, making her future actions suspect. The other board members who meekly acquiesed to Dunn's actions, once they found out, are morally vaporous. They should have played the Ethics card instead of doing the but-is-it-legal-shuffle.
Kudos to Tom Perkins. I don't often hold up a VC's behavior as a shining example of nobility, but he gets the corporate governance medal of the year. By calling Dunn on her behavior and ignoring the legality and focusing on the real problem--ethics--he rose above the pack by doing the right thing. Sure he's a gazillionaire and could afford to walk off a few boards, but trust me, most VCs would have quietly nodded at the revelation and asked the Chairwoman for the investigator's name after the meeting.
Posted on September 06, 2006
