Reputation and the Mark Hurd Matter

One of the more interesting aspects of the firing of HP's CEO Mark Hurd is the fact that it may have been done not for any particular legal or ethical violation per se, but rather solely for public relations purposes.

According to Monday's New York Times (which has comprehensive details on the firing):

After H.P.’s board learned of the sexual harassment charges, it began the investigation and hired the consulting firm APCO to evaluate the damage such a revelation could cause if made public, according to people with direct knowledge of the situation.

A debate subsequently erupted over whether Mr. Hurd needed to disclose the charges against him publicly, according to a person close to Mr. Hurd. APCO told the board that the company would most likely endure a devastating public relations hit if Mr. Hurd stayed on as chief executive, according to that person.

APCO is not actually a "consulting firm" (in the manner of McKinsey, for example), but rather one of the nation's major independent public relations firms. APCO is a well-known (and well-regarded) firm in a number of areas, including in the fields of public affairs and litigation communications (where, I hear, they've had good instructional materials over the years).

So this raises an interesting question: In the wake of a series of corporate missteps -- including former CEO Carly Fiorina's departure and the infamous pretexting scandal -- did HP rely too heavily on public relations advice when deciding to dismiss one of the most successful CEOs in its history? According to published reports, there was no sexual harassment, nor a sexual relationship. Rather, the dismissal was purely on the basis of purportedly erroneous expense reports (which, according to the Times piece, were not personally submitted by Mr. Hurd).

What is clear is that HP made this decision while facing the threat of a publicly fought legal battle launched by celebrity attorney Gloria Allread, who represented Mr. Hurd's accuser -- although, at this point, it is still unclear what she was actually accusing him of (Allread, for her part, has recently become the go-to lawyer for the high-profile woman scorned -- a good article from The New York Times profiling her practice is here).

So if you'll pardon the pun... were the expense reports simply pretext? After all, it is one thing to integrate public relations concerns into decision-making related to legal or operation issues (indeed, as readers of this blog well know, I believe it is essential). It is quite another to let perception concerns trump all other, in a knee-jerk fashion, allowing questionable claims to result in the dismissal of a successful CEO for fear of PR blowback.

I suspect we'll learn more about this story in the days to come, since this would appear to be the type of corporate action that makes a story bigger, rather than makes it go away.