Dunn must go after violating HP board's trust

Patricia Dunn should resign from the board of Hewlett-Packard.

Dunn, the board's chairwoman, violated the trust of her fellow directors as well as the basic right to individual privacy by running a spy operation against the rest of the board, searching for the source of news leaks.

"Directors should have the highest professional and personal ethics and values, consistent with HP's longstanding values and standards," HP declares in its corporate-governance guidelines, a document approved by the board.

Dunn's fishing expedition through directors' phone records, undertaken without telling them in advance, clearly falls short of those lofty expectations.

Personal information — home and cellphone records, bank accounts, medical information — is nobody's business but our own.

HP's boardroom scandal is particularly troubling because directors of public companies are a kind of firewall that protects investors from incompetent, greedy or unethical managers.

If you've got a pension or a 401(k) or own mutual funds, you've probably got a stake in HP or other big corporations.

You want those companies answering to accomplished, experienced directors.

But who would serve on a board where the chair might single-handedly decide to invade directors' privacy?

To do their jobs effectively, directors need to trust each other and — somewhat like the U.S. Supreme Court — be able to rely on confidentiality until their deliberations result in a final verdict.

HP is just starting to shine after several years of sluggish performance and big layoffs.

The spying scandal is a step backward that can only begin to be fixed if Dunn departs.

This whole sorry affair started when the board began to grow uneasy in late 2004 with the autocratic and ineffective leadership of then-CEO Carly Fiorina.

HP was floundering, making it appropriate for the board to ask tough questions. If that questioning process became public, however, it would make Fiorina look weak and hobble her ability to do a better job.

Nonetheless, word leaked out in January 2005.

Fiorina reportedly went into a fury, further undermining directors' confidence in her and contributing to the board's ultimate decision to fire her in February 2005.

According to a document filed Wednesday by HP with the U.S. Securities and Exchange Commission, the phone records identified director George Keyworth as leaking boardroom details.

I can understand why other HP directors asked Keyworth to resign in May when this came to light. Directors aren't likely to speak their minds in board meetings if they're worried their conversations will become public.

All of which puts me in an awkward position. As a journalist, I often ask people to reveal confidential information.

Whether Keyworth's behavior is right or wrong, it's no excuse for Dunn reacting the way she did to the leaks.

HP's report to the SEC does note that Dunn "instructed the outside consulting firm (hired by HP) to conduct its investigation in accordance with applicable law."

Yet only after HP director Tom Perkins, a friend of Keyworth, resigned in protest did the board take a closer look. HP's outside lawyers found Dunn's investigators used methods that may not have "complied in all respects with applicable law."

Even if the investigators didn't commit crimes in obtaining phone records, Dunn still made an inexcusable error in judgment.

If she believed a board member was providing leaks, she should have asked the board's consent to look at their private information.

The board could have agreed, and Keyworth would have been unmasked. Or it could have refused, making a deliberate decision to endure the possibility of more leaks.

Either way, Dunn failed to give HP directors the respect they deserve.

Mike Langberg is a columnist with the San Jose Mercury News.