In 2006, Hewlett-Packard Development Company LP became embroiled in a controversy over methods used to investigate media

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In 2006, Hewlett-Packard Development Company LP became embroiled in a controversy over methods used to investigate media leaks from its board. HP Chairperson Patricia Dunn could have simply asked the directors who were the source cited in the story, sought an apology and gone from there. With some direct face-to-face communication, the story would likely have ended quickly. It did not. “Not only did investigators impersonate board members, employees, and journalists to obtain their phone records, but according to multiple reports, they also surveilled an HP director and a reporter for CNET Networks, Inc. They sent monitoring spyware in an e-mail to that reporter by concocting a phony tip. They even snooped on the phone records of former CEO and Chairperson Carly Fiorina, who had launched the quest to identify media sources in the first place.” The situation continued to escalate. For example, The New York Times reported that HP consultants even considered planting clerical or custodial workers at CNET and The Wall Street Journal to learn who was leaking information to them. Following this, Patricia Dunn, as well as three executives, left the company.

In a congressional hearing and several Federal investigations later, executives were charged with felonies, and HP paid $14.5 million to settle civil charges related to the scandal. HP is not the only company to use such methods; recent admissions by the investigation firms involved suggest that the use of ethically questionable investigative tactics by large companies is quite common. “It betrays a type of corporate culture that is so self-obsessed, (that) really considers itself not only above the law but above, I think, ethical decency, that you have to ask yourself, where did the shame come in?” said Charles King, an analyst with Pund-IT Inc.

Consider this situation from a multiple-stakeholder perspective. Imagine you are:

a CEO faced with leaks regarding your strategic vision. What would you do to determine who was sharing the information? What would be the advantages and disadvantages of these approaches?
a shareholder with HP stock. What would you want to see done to protect your investment in the company?
a board member who was spied upon. What would your reaction be to learning that you were investigated?
an investigator hired by HP. What role do you have to uphold ethical standards?

As several observers have noted, HP spent a lot of time establishing whether or not their activities were technically legal but little time considering whether or not their actions were ethical. The effects of these events were felt for years after that. After Fiorina’s departure, Léo Apotheker left as CEO. By the time Meg Whitman took over as President and CEO of HP, things were not going well. In a meeting arranged to introduce her to a group of software engineers and managers, one employee told her he was “live blogging” her comments to the group. To this she replied, “You all have taken leaking to a new art form.”