HP to rebuild board and management team in wake of spying scandal

HP chief executive Mark Hurd said yesterday that the company would rebuild its board and management team in the wake of a boardroom-level spying scandal that has left its former chairwoman and chief lawyer under indictment in California. Karlin Lillington reports.

In his first public interview since the scandal broke in September and his consequent testimony before a Congressional subcommittee, Mr Hurd told The Irish Times that he had asked HP employees to "stay focused" as evidence emerged that HP investigators had obtained the private phone records of nine journalists, seven board members and two HP employees, as well as those of Hurd himself.

"HP deserves to have the best board of directors it could possibly have," said Mr Hurd, who was appointed to head the company as the scandal unwound.

"We'll go rebuild the board in the same way we've gone and rebuilt the company."

Hurd stressed that he believed the scandal did not affect the core business or strategy of the company, and should not be compared to financial wrongdoing at companies such as Enron and WorldCom.

The affair so far has done little damage to Hurd's reputation as the company's saviour, or to HP's strong financial performance.

Revenue for the past fiscal year totals $90 billion (€70.4 billion) and it is predicting over $24 billion in revenue for the current quarter.

In a sign of market confidence, its share price has continued to rise.

But the scandal deeply shocked many who admire HP's legacy of corporate integrity, ethics and responsibility, embodied in a distinct corporate culture dubbed "The HP Way" by founders Bill Hewlett and David Packard.

In his Congressional testimony, Hurd acknowledged that if Hewlett and Packard were alive today, they would be "appalled" and "embarrassed" by the scandal.

Mr Hurd told The Irish Times: "The values of the company are fairly timeless. I like them. They're ones we embrace.

"But make no doubt about it - when things weren't right at HP, they fixed them. Bill and David got things done. It's not that tough things don't get done but that they get done in the right way."

He also said HP was likely to add additional jobs in Ireland or to transform existing jobs, probably moving towards more high-value positions in research and development.

"Is there the possibility to add R&D jobs or transform the existing jobs in Ireland? Certainly, the capacity is there," he said.

"We're trying to grow our company and that could include adding additional capacity in Ireland.

"We're always looking to expand capacity, and innovative research and development is the lifeblood of the company."

He said Ireland was a central part of the HP organisation: "We do important things here in relation to the company and we think we can improve our position here."

Mr Hurd said Ireland's GDP (gross domestic product) growth remained strong and "it's very attractive for us to go where GDP growth is strong and market growth is strong".

"As a market, Ireland is attractive for us to do several things. And I can tell you, externally, Ireland is viewed very favourably," he added.