HP pays $14.5 million — spying suit points to crisis in board education

Hewlett-Packard agrees to cough up $14.5 million in response to the board-spying scandal that has hurt HP’s brand, but this raises fundamental questions about how board members are trained.

Still pending are criminal charges facing five individuals. These people, including the former chairman Pat Dunn, have supposedly been trained in Silicon Valley business etiquette for years, if not decades. An ethics officer Kevin Hunsaker is even one of those charged. If this can happen at a huge public company, what does it mean for the thousands of private companies in Silicon Valley and elsewhere? As part of the deal, HP will overhaul its ethics training and create new internal processes to improve its adherence to the law and good business practices. But is HP really that exceptional? Think of all the private companies that have appointed board members who have little or no training on conduct, and presumably fewer constraints because of the lack of public company regulation. They can make decisions early on that will haunt them years later.

Pascal Levensohn, a valley venture capitalist who writes about board member best practices and ethics, writes that the lack of board member education is widespread. We never hear about all the lawsuits that get filed every year against board members, and are quietly settled. Some break out in the open, but even those are settled before we can learn the lessons about what happened and why.

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Tags: board members