HP Hires Ethics and Compliance Officer

Hewlett-Packard is hiring a chief ethics and compliance officer to make sure its business practices, sullied by a boardroom spying scandal, remain on the straight and narrow.

HP Thursday announced the appointment of Jon Hoak, a former legal counsel for NCR, to the ethics post, which is a vice presidency. Hoak will report to Chief Executive Officer (CEO), President and Chairman Mark Hurd, until a new HP general counsel is named. Hurd was CEO of NCR before being hired by HP in March 2005.

Hoak, 57, will be responsible for HP’s adherence to its Standards of Business Conduct and will work with Bart Schwartz, an outside counsel who was hired last month, in the wake of the scandal, to perform an independent assessment of HP’s current investigative practices and develop future best practices, the technology company stated in a news release.

The HP general counsel position is vacant since Ann Baskins resigned from the position on Sept. 28, the day she and other HP executives were called to testify at a House subcommittee hearing about the HP scandal. Baskins was one of several witnesses who declined to testify, citing the Fifth Amendment right against self-incrimination.

Five people, including former HP Chairwoman Patricia Dunn, former legal counsel Kevin Hunsaker and three private detectives, face felony charges in Santa Clara County, Calif., Superior Court. Dunn authorized, and Hunsaker led, an investigation of boardroom leaks to news media. The private detectives HP hired allegedly engaged in pretexting, the use of false pretenses to gain access to telephone records of HP directors, other employees and journalists to trace the source of the leaks. The state of California charges that those practices are illegal.

Hoak started his new job Wednesday.

Also Thursday, Forrester Research released a survey of chief information officers (CIOs) that showed little impact of the scandal on their willingness to do business with HP.

Forrester sent a Web-based poll to 231 CIOs, and 44 of them responded. Although most of them have followed news of the scandal with interest, only three of 28 who responded that they were planning to do business with HP said they were reviewing their options.

Forrester analyst Frank Gillett advises his clients that unless the scandal forces Hurd out as CEO, they should continue to do business with HP.

“CIOs should look to HP to use the boardroom cleanup as an opportunity to up the ante for the transparency and openness of customer relationships,” Gillett stated in his report.

The scandal has created three vacancies on the board. Besides Dunn, director George Keyworth, who was identified as the board member who leaked information, resigned Sept. 12, and director Thomas Perkins resigned May 18 in protest to the way the investigation was handled.

By Robert Mullins, IDG News Service (San Francisco Bureau)

For more information, read our HP Spying Scandal page.