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Case 5: Hewlett-Packard’s Secret Surveillance of Directors and JournalistsTEACHING NOTE FOR:HEWLETT-PACKARD’S SECRET SURVEILLANCEOF DIRECTORS AND JOURNALISTSThis case illustrates the following themes and concepts discussed in the chapters listed:Theme/ConceptChapterStakeholder analysis1Ethical reasoning4Organizational ethics and the law5Corporate governance14Case Synopsis:In 2006, HP admitted it had hired outside investigators to spy on members of its board ofdirectors and journalists to uncover the source of several leaks of confidential boarddeliberations.The investigators used methods, including “pretexting” (using an assumedidentity in order to access others’ telephone records) which were possibly illegal andalmost certainly unethical. Newsweek summed up the situation: “Lying, spying, name-calling, finger-pointing—all of it is a tragicomedy that Shakespeare might have penned ifhe had gotten an MBA.”This case uses primary documents to present variousperspectives on HP’s leak investigations, including those of the non-executive chairman,CEO, former CEO, various board members, managers, and investigators. What problemwas HP attempting to address in its investigation? Did the company’s behavior conformto accepted standards of good corporate governance?Were its methods ethical? What, ifanything, should the company and its chairman, Patricia Dunn, have done differently?How could HP’s new CEO, Mark Hurd, best assure effective governance and ethicalbehavior in the future?TEACHING TIP: VIDEOSSeveral videotapes are available for use with this case.These are:“HP CEO, Chairman Testify at Hearing,” News Hour with Jim Lehrer (PBS),September 28, 2006 (9 minutes).In this segment, Kwame Holman reports on thecongressional hearing where HP CEO Mark Hurd and former chairwoman PatriciaDunn testified about HP’s use of pretexting and other possibly illegal and/or unethicalmethods to investigate boardroom leaks. The segment includes statements by severalmembers of Congress and by Dunn, Hurd, and outside counsel Larry Sonsini.It maybe used to introduce the case discussion.The segment is available through streamingvideo at .It is also included on the DVD that is packaged withthe instructor’s materials provided with the textbook, under the title, “Under Fire: HPHearings.”Case 5-1
Case 5: Hewlett-Packard’s Secret Surveillance of Directors and Journalists“Interview with Pattie Dunn,” 60 Minutes (CBS), first aired October 8, 2006 (12minutes).In an interview with Lesley Stahl shortly after her indictment on criminalcharges in connection with HP’s pretexting, Dunn makes the case for her innocence.She explains why she believed a leak investigation was necessary and the nature of herrole in it.She also describes the board meeting where the identity of the leaker wasexposed and charges former director Tom Perkins with a “campaign of deceit” that led