H.P.’s Blundering Board

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The Hewlett-Packard board is back to doing what it does best: shooting itself in the foot. By filing an embarrassing lawsuit against the company’s former chief executive, Mark V. Hurd, this week — a suit that unwittingly highlights the mistakes it made in the way it let Mr. Hurd go — the H.P. board can now lay claim, officially, to the title of the Most Inept Board in America. 

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Mr. Hurd got his $12.2 million 30 days after leaving H.P. On Sept. 6 — which is to say, the 31st day — Oracle announced that Mr. Hurd was joining Oracle as co-president, reporting to its founder and chief executive, Lawrence J. Ellison, well known in Silicon Valley as a corporate mischief-maker.

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Let us acknowledge, before going any further, that Mr. Hurd does not appear to be a candidate for sainthood in this matter. This whole dustup began when Mr. Hurd was accused of sexual harassment by Jodie Fisher, the greeter in question. Although Mr. Hurd quickly paid to make the accusation go away — and although the two have denied having sex — it sure looks like something fishy was going on. You don’t keep someone off your expense account without a reason.

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Thus, the central contention in the H.P. lawsuit — that Mr. Hurd will inevitably use his inside knowledge of H.P.’s hardware business to help his new employer — strikes me as quite plausible. How can he not? He’s spent the last five years eating, drinking and sleeping H.P. (Well, except when he was eating and drinking with Ms. Fisher.) H.P. is in his bones.

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What I’ve been hearing this week is that the board felt it had no choice but to sue Mr. Hurd — both to put him on notice and to send a strong message to the rest of the company. But if this case gets laughed out of court, as I suspect it will, the message is going to be a bit different from what the board intends. The whole world will know Mr. Hurd walked away with $40 million of H.P. shareholders’ money, and joined a multibillion-dollar competitor with H.P. in its sights — and there wasn’t a thing H.P. could do to stop him. Confidence-inspiring, this ain’t.

http://www.nytimes.com/2010/09/11/business/11nocera.html?_r=1