Abstract: This case study helps in analyzing if the HP Board acted in right way by ousting one of the

most successful CEO’s that America has seen in the recent history – Mark Hurd. This case also helps in
understanding the importance that companies place (or should place) on their code of conduct and how
important it is for the employees, at all levels, to follow ethics. This case also puts forth the importance of
public image of a corporation. 

Mark Hurd was appointed as CEO by the HP Board, to restore the investors' faith in the company and
arrest perpetual slide of fortunes during the tenure of Carly Fiorina. He did restore investors’ faith by
delivering superior financial performance even in the face of acute recession during 2008-2010. It was
under his tenure that the HP had regained the top position in the PC market overtaking Dell and the shre
price had almost doubled. 

When a former marketing consultant to HP, Jodie Fisher (Fisher), charged Hurd with sexual harassment
none of his achievements could save him his job. Though, the company's investigators found no evidence
for Fisher's charges, they revealed that Hurd had submitted inaccurate expense accounts. HP's Board
sought Hurd’s resignation in August 2010 stating that he had not lived up to HP’s code of ethics and had
lost the necessary judgment to be at the helm of affairs.

Pedagogical Objectives:
Understand the importance of code of conduct.
Analyze if the Board was justified in seeking resignation of Hurd.
Debate if the situation really warranted losing a successful CEO over such an issue.
Understand the prominence of public image of a corporation.

Keywords : Ethics, Corporate Governance, Mark Hurd, Hewlett Packard, Public Image, Carly
Fiorian, Board of Directors

Contents :
» HP Under Carleton Fiorina
» Mark Hurd at HP: Beginning a new Era
» The Controversy: Beginning of the End of the Era
» The Resignation

Introduction: Mark Hurd (Hurd) as Hewlett Packard's (HP) CEO and Chairman, had come in for
plenty of praise, from both Wall Street and corporate America for turning around a company of
HP's size and keeping it on the growth track in the face of acute recession during 2008-2010. In
2010, though, Hurd was ousted from HP on the charges of fudging the expense accounts.
Analysts expressed surprised that none of his achievements had helped save his job at HP.

During Hurd's reign, HP had regained the top position in the PC market overtaking Dell ;
reaffirmed its leadership in the printers market; made strong progress in the hardware market;
and almost doubled its share price while adding several new gadgets to its product portfolio to
emerge as a leading technology company. HP also had the enviable record of becoming the first
technology company to gross $100 billion in sales, overtaking IBM in the process, during this
period. Hurd had accomplished all this while containing costs penny by penny...
Excerpts
HP Under Carleton Fiorina Hurd was appointed as CEO of HP in 2005. He succeeded Carleton S.
Fiorina (Fiorina). On assuming the job, Hurd declared, "To make HP a great company once
again, we need more than competitive costs and operational efficiency. We're in the process of
assessing and refining our growth strategy, and the same concepts that were behind our
operational changes will be at work here: simplicity, focus, alignment, and execution."
Observers felt that he had succeeded in bringing back simplicity and focus into HP by deviating
completely from Fiorina’s management style....

Mark Hurd at HP: Beginning a new Era To arrest both – falling stock prices and the exodus of
executives – HP called in Mark Hurd, CEO of the little known NCR Corp , to head HP, replacing
Fiorina. Before taking up HP’s offer, Hurd had been an unknown entity outside NCR with hardly
any experience in managing big corporations. However, at NCR, Hurd had led a turnaround by
integrating the company’s hardware business with the acquired Teradata Corp's software
business. He was reputed to be a tough numbers guy with a penchant for ruthless execution
and for being media shy. Analysts stated that he was a far cry from Fiorina with her ground-
wrenching strategies and highflying celebrity aura...

The Controversy: Beginning of the End of the Era Hurd and Fisher's relationship began in 2007,
when he hired her as a marketing consultant for CEO summit meetings. Fisher would introduce
him to customers and keep him company. HP held CEO executive summit meetings, at which
top executives from HP’s best customers were invited. Fisher was interviewed by Hurd ¬though
a CEO interviewing any candidate for such a small position was unusual, according to the trade
press. Fisher was a 50-year-old former actress with a few R-rated movies and TV reality shows
to her credit...

The Resignation The sudden announcement of Hurd's resignation on August 6, 2010, by HP's
Board of directors attracted just the kind of media scrutiny they had hoped to avoid. The New
York Times summed up, "H.P.'s board stunned Silicon Valley and Wall Street late Friday by
announcing Mr. Hurd's resignation as chairman and chief executive of the computing and
printing giant, involving what it said was a "close personal relationship" with a contractor who
helped with the company's marketing"...