September 10, 2006 3:50 PM PDT

HP board mum on Dunn's fate

Hewlett-Packard's board of directors met for several hours Sunday but adjourned without announcing a decision on the fate of Chairman Patricia Dunn, who is facing calls to resign in the wake of a probe of board members and journalists that involved access to personal phone records.

The company said it would reconvene Monday and would issue no further statements regarding the probe until that time.

Dunn has been at the center of a controversy involving the ordinarily secret activities of HP's boardroom. After leaks to the press beginning in 2005, Dunn ordered an investigation of board members that led one to resign and put the post of another in jeopardy.

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HP said in a U.S. Securities and Exchange Commission filing that it hired an investigation company to try to track down board leaks to the media. The investigators in turn hired a contractor that used pretexting to scrutinize board members, HP said. Pretexting is the practice of one person masquerading as another to obtain private information such as phone records.

The technology giant acknowledged on Thursday that investigators accessed the phone records of nine reporters, including three from News.com.

Dunn has said she did not know private investigators hired by the computer maker had used questionable tactics to access private phone records of board directors and journalists. The office of California's attorney general has issued subpoenas to determine whether the used of pretexting broke any laws.

Silicon Valley venture capitalist Thomas Perkins, who quit HP's board in May over how the board conducted the probe, said Saturday that Dunn should resign her position.

"I acted not from any ill will toward Ms. Dunn but to protect the best interests of HP," Perkins said in a statement. "I think the past months and days have shown that those interests are best served if Ms. Dunn would resign from the board."

Dunn has said she has no plans to step down. "If the board wants me to resign, I will absolutely accept their judgment on this," Dunn said. "I have full confidence that if they ask me to, it'll be the right thing to do for shareholders."

HP's privacy policy says the company obtains personal information by "lawful and fair means." The company's official Standards of Business Conduct (click for PDF) says HP conducts business "fairly, legally and with integrity," and lists theft and records falsification as misconduct that can result in termination of employment.

The probe has sparked an inquiry by California's attorney general that could result in criminal liability for identity theft and illegally accessing database information.

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9 comments

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Fingers Crossed
Here is hoping the Board does the right thing and ousts Dunn. My
fear is they will do what other boards do and just cover-up for her.
They will send a message to both the stockholders and other
companies by their action whichever way it goes.
Posted by georgiarat (254 comments )
Reply Link Flag
Dumb Dunn Done
<.>
Posted by maxo3 (22 comments )
Reply Link Flag
Yeah but!
Yeah but!, in any corporate board meeting, the final determinate on any real contentious issue is always based on who has the most shares under control/registered share proxies cast at the time of the vote!

It's all about the numbers of shares under direct or indirect control by each appointed director at the meeting!

Oh well, to elect a new chairman, an extraordinary shareholders meeting must be convened if she goes!

Looks like HP, is now currently stuck in an endless circle the wagons exercise, with no exit in sight, whilst she remains at the helm!

What a tragic contentious conundrum, for both the shareholders and all employees at HP!
Posted by heystoopid (691 comments )
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Leadership
True leaders do what's best for their organization, not for themselves. The fact that she hasn't resigned yet shows what kind of leader she is. She knows the board lifestyle is over for her, and yet she's still hanging on. Sorry, no more six figure salary for twelve meetings a year my dear.
Posted by solrosenberg (124 comments )
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True Leaders
I remember when CEOs, CFOs, and prominent VCs actually inspired their employees and worked hard to better the entire company, not just board memebers, stock holders, and their billionaire boy's club buddies.

Those days are sadly long gone...
Posted by dymilehigh (3 comments )
Link Flag
The Guilty will cover for the Guilty...
Don't expect much as this already involves a conspiracy much wider than Ms. Dunn. It is not in the interest of the rest of the board or Mark Hurd to replace Ms. Dunn as she could give info on them.
This is the "HP Way"
Posted by fred dunn (793 comments )
Reply Link Flag
Nothing Will Happen To Her
Nothing will happen to her. Corporations, like members of the Media, like member in the Gov., cover for "their own".

A slap on the wrist, a bit of PR eye wash with some showing of contrition and back to business as usual. Maybe a bit of legal problems, but those will be paid off with out of court settlements.

Ho hum. More of the same. The media making a huge story out of what will end as little or nothing.

Wash, rinse, repeat.
Posted by Mousefinger (34 comments )
Reply Link Flag
change in companyies privacy policy
This kind of spying on employees and customers does so much to undermine company brand and confidence. Hopefully, this case will do much to deter this kind of practice. People want to know there email and calls are private, regardless of whether they're doing something wrong or not.
See email encryption product, Taceo: <a class="jive-link-external" href="http://www.essentialsecurity.com/products.htm" target="_newWindow">http://www.essentialsecurity.com/products.htm</a>
Posted by nanarita (6 comments )
Reply Link Flag
lol, she must of thunk she was president
I think Ms. Dunn was just trying this out to see if it worked in case she ran for president, lol.
Posted by asaone1 (1 comment )
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