Hewlett-Packard created trust problems by spying on board members, journalists to track media leaks

Thursday, September 14, 2006
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Computer maker Hewlett-Packard Co. and Patricia Dunn, chairwoman of its board of directors, are facing state of California and federal investigations after Dunn had data brokers obtain telephone records of board members and journalists to look for media leaks. Earlier this week, Dunn said that she would step down from her post in January, but will remain on the board of directors.

A professor of management at the University of North Texas says the spying sends a bad message to employees and creates a liability issue for H-P.

Dr. Vicki Goodwin says that while companies should investigate possible leaks to the media, it was not fine to conduct an investigation in the manner that Dunn did.

"She has created trust and legal problems by doing what she did the way she did it. It will be hard for her to continue functioning as a company executive," Goodwin says.

Dunn claims, however, that several H-P board members want her to stay on the job.

A member of H-P's board of directors quit after discovering that his phone records had been improperly obtained. At least nine reporters also had their phone records accessed by the investigators hired by H-P, leading to state and federal probes.

Goodwin says management needs to have a "proportionate response" to any given problem to have effective change.

"When you have people doing unethical, if not illegal things, it takes away from the focus on the problem," she says.

Goodwin adds that Dunn's response to the media leaks was excessive. Combined with the secretive nature of the company's investigation, the response has likely generated ill will between Dunn and the remaining board members.

"There is nothing wrong with doing things in the open," Goodwin says. "You have to be upfront with what you want to do. Ultimately, the buck stops with (Dunn), and ethics start at the top."

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