HP case likely to spur corporate change
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California's criminal charges against former Hewlett-Packard Co. chairwoman Patricia Dunn and four associates have put the spotlight on privacy in the business world and could spark internal corporate reforms or even legislation to counter privacy abuses.
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The Hewlett-Packard surveillance campaign ranged from internal monitoring of e-mail and instant messages to physical surveillance of an HP board member and at least one journalist, according to one of the lawyers at the firm recently retained by the company to investigate its conduct in the matter.
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Revelations that HP supervised an extensive investigation of some of its directors, journalists and a few employees have blemished its reputation. The New York Times
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By Michelle Kessler  SAN FRANCISCO -- Hewlett-Packard's snooping scandal has besmirched the company's reputation -- but many other things are going great for the computer giant, tech analysts say.
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(InfoWorld) - Hewlett-Packard Co.'s board of directors has leapt out of the mainstream with the recently disclosed scandal that's set members against each other, but changes over the past several years have made conflict on boards more likely. Boards have evolved from clubby groups of company executives and tight partners to more independent bodies, management experts said Friday. HP's messy fight, in which investigators hired by the board used possibly illegal techniques to uncover apparent leaks of confidential information by some directors, is a spectacle unto itself, they said. But directors are now more likely to call companies to account. "Boards have changed very dramatically in the last 20 years, and especially in the last 4 years," said Nell Minow, editor at The Corporate Library, a research company in Portland, Maine, that specializes in corporate governance. "There isn't a board in America that isn't much more active, much more vital, much more independent." Many boards used to be heavily laden with investment bankers and lawyers who worked for the company, and often had four or five company executives, said Harvard Business School professor Joseph Bower. That hasn't been true since at least the 1980s, as the percentage of independent members grew, he said. "I think boards are much more diligent ... than they were 15 to 20 years ago," said David Larcker, a professor at Stanford University's Graduate School of Business. "In the process, there are controversies that didn't crop up back then." The probe of HP's board, though embarrassing, was probably necessary, The Corporate Library's Minow said. "They have not been a functional board," Minow said, criticizing the handling of former Chairman, President and Chief Executive Officer Carly Fiorina's hiring and dismissal. Some of the leaks from the HP board involved discussions about Fiorina. It's hard for boards to work if there are leaks and directors don't trust each other, Minow said. Yet to find out who was leaking information, they unfortunately had to give the investigators a lot of independence. "I think they made the best of a very bad situation." The trend toward truly independent boards has accelerated with recent scandals and stepped-up regulation, Minow said. A key factor was out-of-court settlements of suits against Enron and WorldCom in recent years, in which directors who weren't involved in wrongdoing accepted some liability. "Those settlements shivered the timbers of every director in America," Minow said. Also in the past few years, companies that sell "director and officer" liability insurance have raised premiums on companies they thought didn't have enough oversight to prevent Enron-style legal meltdowns. In addition, the Sarbanes-Oxley regulations made boards more diligent by forcing companies to ensure proper oversight of accounting, cybersecurity and other issues, she said. However read, a drama like HP's is not unprecedented, according to Harvard's Bower. About 20 years ago, there was a succession battle at American Express that included leaks to the media, he said. He sees the latest board fight as another aberrant event rather than an outcome of boards becoming more independent. "Every once in a while, there are battles and people disagree strongly. And when people disagree strongly, sometimes they do silly things," Bower said.
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HP exec Mark Hurd reaches out to employees as the company decides how to react to this week's boardroom pretexting scandal.
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By Kimberly Pierceall, The Press-Enterprise, Riverside, Calif.  Feb. 10--Two years ago, as its chief executive officer and chairwoman,  Carly Fiorina led Hewlett-Packard through the controversial merger that would  fuse her company and Compaq.
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After some key changes, the company may be poised for growth.
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(InfoWorld) - It happens every year: as the calendar gets ready to turn over, we get an itch to pause, to be quiet, to reflect. Thatâs probably why âyear in reviewâ stories are so popular at this time of year: they channel a seasonal compunction among editors and readers alike. But what to make of 2006? Itâs a year in which some enterprises and IT firms made bold moves to set themselves on a new course, while others failed, in spectacular fashion, to learn the lessons of the past. For this penultimate Tech Watch, we review the year with the aid of some pithy quotes. âIf I knew then what I know now, Iâd have done things differently.â -- Patricia Dunn, former Hewlett-Packard chairwoman Sometimes you come across a product or corporate initiative -- letâs take Sonyâs recent DRM spyware as an example -- that is so patently wrongheaded you canât imagine how it ever came to see the light of day. When you dig into the history of those decisions, you often find that they were made by people who were trying, earnestly, to solve a very specific problem without seeing how their âsolutionâ might affect the company as a whole. Thatâs what makes the scandal that led to the resignation of HP Chairman Patricia Dunn and the criminal charges against her, HP legal counsel Kevin Hunsaker, and three outside investigators all the more exceptional. These were the folks at the top of the totem pole. The dispute arose over the handling of an investigation by HP to see which members of its board of directors leaked information, including arguments about the ouster of former CEO Carly Fiorina, to the press. Hurd and other board members, it seems, became distracted by a âplumbingâ expedition, as it was called in the Nixon White House, and contracted with a company to use âpretexting,â a controversial technique where investigators pretend to be the people being investigated in order to access private information. Despite intense media and legal scrutiny, though, the squabble has not fazed HP shareholders or customers. Under Mark Hurd, CEO and newly appointed chairman, the company is fulfilling the promise of the controversial HP-Compaq merger engineered by Fiorina: It has overtaken Dell as the leading PC maker and IBM as the biggest IT company. The spy scandal has broad implications, however. Congress is now considering federal laws against pretexting, and increased oversight of corporate governance is becoming a shareholder rallying cry. --Marc Ferranti, IDG News Service ââFree has to have a price?â Thatâs nonsense.â -- Sun CEO Jonathan Schwartz After years of staving off open source proponents, Sun Microsystems in November 2006 bit the bullet and made Java available via open source, and doubled down on that by offering up Java to the GNU General Public License, ensuring that revisions to Java are submitted back to the community at large. Naturally, the move raised as many questions as it answered. Chief among them: Can Sunâs Java gurus adapt to the new paradigm and relinquish some degree of control? Looking at the evidence, it seems likely that Sun can. Java already has spawned a whole industryâs worth of open source projects such as the popular Spring Framework. Sunâs Solaris OS has thrived under open source. Inside Sun, however, not everyone shared Schwartzâs optimism. Graham Hamilton, a Sun Fellow for the Java team, departed the company over the momentous announcement, according to one insider. Outside Sun, IBM protested that it wanted Java placed under the jurisdiction of the Apache Software Foundation. Schwartzâs decision regarding Java will be remembered as a high point of 2006, and further proof that commercial vendors must find a way to ride, not fight the open source wave. -- Paul Krill âI am having personal difficulty looking veterans in the eye.â -- VA CISO Pedro Cadenas With mega blow-ups like the hack of CardSystems, many labeled 2005 the âYear of the Data Breach.â But that year seemed to extend, seamlessly, into 2006, as well. No incident epitomized the bumbling of sensitive data than the U.S. Department of Veterans Affairsâ loss of a laptop containing personal data of more than 26 million vets. The device in question was stolen from the home of a VA analyst, and was later recovered. Stories like the VAâs were sadly common this year. Chevron, GE, AT&T, Starbucks, and Wells Fargo all reported losing customer or employee data. One of the common themes in many cases was that data was being carried around, unencrypted, on portable PCs stolen from or lost by employees of third-party companies. That troubling trend bears out in a study that Vontu and the Ponemon Institute conducted this year, which found that 81 percent of the 500 companies surveyed âreported the loss of one or more laptops containing sensitive information during the past 12 months.â --Ted Samson âI wouldnât be surprised to see SaaS services (at) $5 per month, per user.â -- Josh Greenbaum, EAConsult 2006 didnât quite make it as âThe Year of SaaS,â but it came darn close. Spurred by the success of firms such as Salesforce.com, Microsoft, Oracle, and SAS created SaaS CRM products with integration to their on-premises software as a differentiator. Even more important: SaaS providers, led by Salesforce, laid down a solid foundation on which to build new services in 2007 and beyond. Take, for example, AppExchange, an online market of sorts that Salesforce launched in October. AppExchange allows third-party providers to post their wares, and gives users the ability to pick and choose from applications and features that enhance the Salesforce.com software. AppExchange implies a recognition by Salesforce and, we can now assume, other SaaS providers that if enterprise-level companies are to adopt SaaS, then SaaS solutions canât be siloed. Integration of CRM with ERP, business intelligence and product lifecycle management are a must for the enterprise. -- Ephraim Schwartz âthe best season to visit Italyâ -- search query by Thelma Arnold, aka AOL user No. 4417749 Connect users to the world of information â¦ then betray their trust. Itâs not exactly the long-term strategy AOL had in mind, nor one to stay on top in todayâs Web 2.0-influenced Internet. Yet AOLâs infamous search data leak in August, which resulted in the ousting of CTO Maureen Govern, was just one headline head-scratcher involving the online giant this year. AOL, with its huge user base, has a track record of developing innovative new services to keep users loyal. That should have put the company at the forefront of the Web 2.0 wave that gave birth to sites such as FaceBook. But AOL, like other âold lineâ dot-coms Yahoo and Microsoft, proved too slow on the uptake, as firms with bigger visions and faster feet cherry-picked hot properties and left them standing on the sidelines. AOL hurt itself, too, with news reports of horror stories from customers who tried to cancel accounts, and a âbadwareâ label for AOL 9.0. By the time The New York Timesâ triangulated Thelma Arnold, a 62-year-old widow from Lilburn, Ga., from the search record of AOL user No. 4417749, it was merely putting a face on AOLâs already eroding relationship with its expansive user base. By yearâs end, firms such as AOL and Yahoo were taking bolder steps to right their listing vessels: AOL dropped its subscription-services model and a quarter of its workforce, including CEO Jonathan Miller. Yahoo also shook up its boardroom, amid disappointing earnings and signs of discontent from senior management. Shortly before he lost his job, CEO Miller had observed in a keynote speech that âthe big companies will stay big companiesâ as the Internet evolves. Going into 2007, AOL isnât alone among big companies that are praying that adage rings true. -- Jason Snyder
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By MICHAEL LIEDTKE  SAN FRANCISCO - Battling to keep her job, Hewlett-Packard Co.
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As the Hewlett-Packard (HPQ) board prepares for
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Hewlett-Packard (HP) is hot about what it considers a consumer revolution in digital media, and on Friday the company&#39;s Chairman and Chief Executive Officer
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CEO Mark Hurd promised a major transformation of Hewlett-Packard's IT infrastructure to set an example to enterprise customers of how they can use HP hardware, software, and services to lower their own business IT costs.
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No matter who succeeds Carleton Fiorina as chief of Hewlett-Packard, the challenge will be the same: to shift the company towards businesses with more ample profits.
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By Henry J. Holcomb, The Philadelphia Inquirer  Feb. 10--The Philadelphia lawyer who helped Hewlett-Packard Co. navigate its boardroom spying scandal last year is moving to California to become the company's executive vice president and general counsel.   Michael J.
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By JORDAN ROBERTSON  SAN JOSE, Calif. - A congressional panel wants to question key figures in the scandal surrounding Hewlett-Packard Co.'s investigation of media leaks, while a shareholder lawsuit was filed in state court accusing the company's top brass of breaching their duties.
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CEO Mark Hurd took the stage in Las Vegas at the HP Technology Forum & Expo to reaffirm the company's plans to reshape its IT operations, cut operational costs and improve its alignment with the business.