HP on hunt for new leader following Hurd's shock departure

News Christine Horton 2010-08-09 13:18

Hurd said the decision to resign was painful after five years at HP, but it would be difficult for him to continue as

HP CEO Mark Hurd resigns following harassment claims; CFO Cathie Lesjak temporarily replaces him

The IT industry is reeling from Friday’s announcement that HP (NYSE: HPQ) chairman, CEO and president Mark Hurd, has stepped down following an investigation into claims of sexual harassment.
CFO Cathie Lesjak, 51, will replace him on an interim basis, although has taken herself out of the running in the search for a permanent CEO. The vendor has set up a Search Committee to oversee the selection of Hurd’s replacement.
Hurd decided to step down following an investigation by outside legal counsel and the General Counsel’s Office, overseen by the HP Board, into a claim of sexual harassment against him and HP by a former contractor. Although the counsel determined there was no violation of HP’s sexual harassment policy, it did find violations of the firm’s Standards of Business Conduct.
Painful decision
Says Hurd in a statement: “As the investigation progressed, I realised there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career.
“After a number of discussions with members of the board, I will move aside and the board will search for new leadership. This is a painful decision for me to make after five years at HP, but I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time. I want to stress that this in no way reflects on the operating performance or financial integrity of HP.”
At the same time, HP announced preliminary results for its third quarter 2010, with revenue of approximately $30.7bn up 11 percent compared with the prior-year period.
Low-cost supplier
Comments Martyn Reynolds, managing VP at Gartner: “Mr. Hurd drove an amazing turnaround at HP, driving a focus on measurement and results that transformed the company into a cost control machine. However, Mr. Hurd’s approach branded HP as a low-cost supplier, suppressing the image of the company as an innovator (this is much better than being an unprofitable innovator).
“The company needs to be recognised by consumers as a cool brand, a company that makes products that you have to have. And there’s no immediate pressure to do this, so the board has time to make the right choice for the future of HP – and its future customers.”