Video: HP Chairwoman Patricia Dunn resigns

updated 9/22/2006 8:10:59 PM ET 2006-09-23T00:10:59

Hewlett-Packard Co. Chairwoman Patricia Dunn resigned Friday, effective immediately, in the wake of the company’s ill-fated investigation of boardroom media leaks.

Announcing the resignation, HP Chief Executive Mark Hurd called the tactics used by the company’s outside investigators “very disturbing.”

“I extend my sincerest apologies to those journalists who were investigated and to everyone who was impacted,” he said at his first news conference since the scandal erupted Sept. 6.

Determined to protect confidential board discussions, HP hired investigators who impersonated board members, employees and journalists to obtain their phone records. The detectives also surveilled an HP director and concocted an e-mail sting to dupe a reporter an online technology site.

HP had earlier said Dunn, who authorized the leaks investigation, would step down from the chair in January and be replaced by Hurd, but remain a member of the board. Hurd said he has succeeded Dunn as chairman and will retain his positions as president and CEO.

In a statement, Dunn said the investigators had targeted her as well as other board members.

"Unfortunately, the people HP relied upon to conduct this type of investigation let me and the company down," she said. "I continue to have the best interests of HP at heart and thus I have accepted the board's request to resign.

Mark Hurd
Benjamin Sklar  /  AP
HP CEO Mark Hurd announces his added new role of chairman Friday.

HP stock rose slightly in extended-hours trading Friday. The news was announced after the close of regular trading.

Silicon Valley venture capitalist Tom Perkins, who sparked the crisis when he resigned from the HP board in protest over the leak investigation, issued a statement indicating he was satisfied with the company's latest shake-up.

"Mark Hurd has shown that he is the right man to take HP to new heights," Perkins said.

"I support him, his vision for HP and I urge the HP family to give him their full support and confidence as he assumes the role of Chairman and CEO," he said. "I would like to thank Pattie Dunn for stepping aside, allowing Mark Hurd to lead and HP to move on."

In recent days, Hurd has faced increased questions about what he knew of HP’s efforts to ferret out a boardroom leak.

Hurd — nearly 18 months into the job — made his public statement as Wall Street worried whether the CEO would become ensnared in the scandal, which had already led to the resignation of two other directors and has spawned criminal investigations.

California Attorney General Bill Lockyer and several federal agencies are investigating whether HP and its executives broke any laws in their crusade to find a media leak on the company’s board.

Hurd so far isn’t among the group of HP insiders that Lockyer expects to charge, spokesman Tom Dresslar said Friday. But the attorney general is still examining Hurd’s role in the scandal. “We are not ruling anybody out in terms of criminal culpability, Dresslar said.

A congressional panel also has scheduled a Sept. 28 hearing to grill HP’s leaders and lawyers about the company’s handling of the probe.

Apparently spurred by Thursday’s developments, Hurd now plans to appear at the hearing being held by the House Energy and Commerce Committee. Dunn and General Counsel Ann Baskins, who also played a central role in the spying program, previously accepted the panel’s invitation to appear.

Dunn's full statement:
Dunn, who was not present at the press event, issued the following statement:

"I have resigned today at the request of the board. The unauthorized disclosure of confidential information was a serious violation of our code of conduct. I followed the proper processes by seeking the assistance of HP security personnel. I did not select the people who conducted the investigation, which was undertaken after consultation with board members. I accepted the responsibility to identify the sources of those leaks, but I did not propose the specific methods of the investigation. I was a full subject of the investigation myself and my phone records were examined along with others. Unfortunately, the people HP relied upon to conduct this type of investigation let me and the company down. I continue to have the best interests of HP at heart and thus I have accepted the board's request to resign. I look forward to appearing before Congress next week to answer their questions and help the company put this unfortunate event behind it."

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