HP’s board had a history of turmoil and turnover. It began in 2002 when Carly Fiorina-CEO since 1999-initiated a merger with Compaq. Most of the board supported the move. However, Walter Hewlett-a son of company founder Bill Hewlett and a longtime director-opposed it saying the merger would destroy the egalitarian culture that was a core element of his father’s legacy. In a close vote, stockholders ultimately approved the merger and Hewlett subsequently left the board. Thomas Perkins, who initially served on the board, rejoined the board shortly after the merger.
One of his first actions as a director was to help organize a new technology committee to make recommendations to the board as to the scope, direction, quality, investment levels, and execution of HP’s technology strategies. With the focus on strategy, members of the technology committee may have differed from other directors who were concerned with governance processes. Twenty months before Patricia Dunn had become chairman of the board, there had been a leak of confidential board deliberations. On January 21, 2005, Fiorina got an urgent e-mail from HP’s press office, stating that the Wall Street Journal was planning to run a story about an off-site strategic planning meeting of the board that happened several days earlier. Apparently, the reporter had talked with several directors about the board’s discussions. Fiorina took action and informed all board members of the leak. The board agreed to ask outside counsel to conduct an investigation of possible leaks. A short time after, Fiorina was fired from the company. 2)
We do not think that the actions taken by HP’s chairman, legal department, and investigators to find the source of the unauthorized disclosures were ethically justifiable. One theory of ethical reasoning that we think relates to this case is the theory of utilitarianism. Utilitarianism is defined as a normative ethical theory that places the locus of right and wrong...
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