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Pharmaceutical industry

HP Chairman Patricia Dunn Steps Down Amid Boardroom Scandal

Strategic Insights

— 1 min read

Patricia Dunn, one of the most respected women in corporate America, will step down as chairman of Hewlett-Packard in January following a scandal over the company's use of underhand techniques to obtain the personal phone records of board members and journalists. The fallout has also led to the departure of HP's non-executive director, George Keyworth, and the chief executive of Bristol-Myers Squibb, Peter Dolan. The controversy centers on a leak inquiry that saw private investigators conceal their identities to track down the source of damaging leaks to the media. Dunn has taken the blame for the investigation, which she described as "inappropriate" and has apologized for the techniques used.

Key Takeaways:

  • Patricia Dunn is stepping down as HP chairman in January to address the issues raised by investigations into the company's conduct.
  • Dunn has taken the blame for hiring private investigators who concealed their identities in the hunt for the source of damaging leaks to the media.
  • The scandal also led to the departure of HP's non-executive director, George Keyworth, who quit and criticized the unauthorized use of his name and social security number to access his phone bills.
  • Journalists from the Wall Street Journal, the New York Times, Business Week, and CNET were among those whose phone records were accessed.
  • Bristol-Myers Squibb's chief executive, Peter Dolan, and general counsel, Richard Willard, also departed the company amid controversy over commercial tactics.
  • HP's chief executive, Mark Hurd, will add the role of chairman to his existing duties to allow Dunn to focus on addressing the issues raised by the investigations.

Statistics:

  • 9 journalists had their phone records accessed by HP's private investigators.
  • 1 retired geophysicist was also targeted in the inquiry.
  • HP's stock price has risen slightly, but the leak inquiry has barely affected the company's overall performance, which has been driven by successes in gaining market share for laptops, printers, and other computer equipment.
  • $2.5bn (pounds 1.3bn) is the amount charged by Bristol-Myers Squibb to wholesalers to meet quarterly targets artificially.

Sources:

  • "Andrew Clark, New York A boardroom spying furore at Hewlett-Packard has cost the computer company's chairman her job..." (Source: The Observer)

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