Corporate worlds stand by HP's decision on Hurd

San Francisco: Corporate governance experts backed Hewlett-Packard's decision to oust its chief executive as questions emerged about the extent of the ethical lapses that led to Mark Hurd's departure, reports Richard Water from Financial Times. HP's interim Chief Executive Cathie Lesjak claimed that investors and customers had been "extremely supportive" of the way HP's board had handled the matter.

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The departure wiped $10 billion off the group's share price on Friday as investors reacted to the loss of an executive credited with turning HP round and to uncertainty over?its?leadership.

Different accounts have emerged of the extent of the expense violations and other alleged lapses that led the board to act. HP said Hurd's departure was precipitated by 'numerous' expense violations as well as his 'close personal relationship' with the woman, who had acted as a marketing contractor to the group. It also alleged misuse of other corporate assets.

Although the probe that led to Friday's forced resignation was prompted by an allegation of sexual harassment, Hurd was cleared of the claim after an investigation by HP. A lawyer for the woman, Jodie Fisher - a former actress who revealed her identity on Sunday via a statement from her lawyer - and another person close to the situation also said there had been no sexual relationship.

"They handled it exactly as they should," Charles Elson, director of the corporate governance centre at the University of Delaware, said. "Once trust is broken between a CEO and a board, it makes it harder to have confidence in anything he says in future. He had to go."

Jeffrey Sonnenberg, a professor at the Yale school of management, said: "This board has shown the perfect balance of due process to investigate the case and then acting with speed and decisiveness."