HP Hires New Ethics Chief

Hewlett-Packard has appointed a new chief ethics and compliance officer in the wake of the controversy surrounding its investigation into news leaks over the past two years.

Jon Hoak, former senior vice president and general counsel for NCR, is replacing Kevin Hunsaker, one of five people charged in California last week with four felonies in connection with the internal probe.

Hunsaker and Patricia Dunn, former chairman of HP's board of directors, were charged with such felonies as identity theft and conspiracy. Also charged were three outside investigators hired by HP to investigate the news leaks. The charges stem from the practices used by the investigators, including gaining the telephone records of directors and several reporters under false pretenses.

Hunsaker, Hurd and two other HP officials, including general counsel Ann Baskins, resigned in September after the internal investigation become public. Also resigning from the board were George Keyworth and Tom Perkins. Keyworth was identified as the source of leaked information to the media in both 2005 and earlier this year.

Hoak, whose appointment was announced Oct. 12, spent 1993 to May 2006 with NCR, the company HP Chairman, President and CEO Mark Hurd ran before coming to HP in 2005 to replace Carly Fiorina. Before that, Hoak was an attorney with AT&T.

"HP has traditionally led the industry in adherence to standards of ethics, privacy and corporate responsibility, and with Jon's guidance, we will lead again," Hurd said in a prepared statement.

Among the duties Hoak will inherit will be working with Bart Schwartz, a former federal prosecutor hired by HP last month to look into HP's current investigative practices and to create future guidelines.

Despite the publicity, the scandal has yet to significantly impact HP's business—the stock has stayed steady throughout the past month—and businesses seem unlikely to abandon the Palo Alto, Calif., company because of it, according to a survey conducted by Forrester Research.

Forrester, of Cambridge, Mass., surveyed 44 CIOs, and most of them said that they have followed the coverage of the controversy. However, only three of 28 companies planning to work with HP said the situation convinced them to look at other options.

Forrester analyst Frank Gillet, in his summary of the report, said businesses should continue working with HP unless the controversy forces Hurd to step down as CEO. Instead, he said, enterprises should view this situation as an opportunity for HP to become a better partner to their customers.

Hurd, who said he had little knowledge of the methods used by the HP investigators, apologized for the way the investigation was conducted. However, he said the goal of the probe—to find the person leaking sensitive company information to the media—was a legitimate one.

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