Former CEO of Hewlett-Packard Mark Hurd

About a month ago, then chairman and CEO of Hewlett-Packard Mark Hurd abruptly canceled his previously scheduled trip to China, citing a cold as the reason. Last weekend, he suddenly announced his resignation as the company’s top officer. He wasn't leaving due to illness, but because he had gotten himself tangled up in a series of scandals involving falsified receipts and a sexual harassment suit to boot. Hurd, 53, said in a statement “As the investigation progressed, I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career. After a number of discussions with members of the board, I will move aside and the board will search for new leadership.” 

It is truly difficult for us Chinese to understand Westerners and the way they handle things. The following list contains some of the facts we find puzzling in regards to the whole matter:

Puzzling Fact #1
It is reported that after a female contractor filed for sexual harassment against Hurd, HP then determined that the two really just had a ‘friendly relationship, but one that is not sexual’ and subsequently cleared Hurd of related charges. Unfortunately, they also uncovered some expense account irregularities and discovered that Hurd had falsified expense reports to the company about meetings with the female contractor in an attempt to cover up the ‘friendly relationship’. For example, Hurd would write up expenses for a meeting with someone else when he had actually flown to meet with the said female contractor for dinner. It was also discovered that through Hurd, HP made payments to the said contractor for expenses that never occurred. All in all, the falsified receipts add up to less than $20,000, and it should be noted that the company payout to Hurd for him to step down from office totals $34.6 million. The board of directors at HP must really take their jobs seriously to want to pay Hurd nearly $40 million for an offense that had cost the company no more than $20,000. This is truly mind-boggling for the Chinese companies and the likes of us.

Puzzling Fact #2
Hurd makes over tens of million dollars a year, and yet he's got to falsify company receipts to take a friend out for dinner? Is it simply because that the richer you get, you tend to be even more of a Scrooge? Or is it the fact that no matter how rich a person is or how much he makes, human greed is just second nature?

Puzzling Fact #3
Five years ago when Hurd took control of HP, the environment in Silicon Valley was one of extreme instability and turbulence. With Hurd in the driver's seat, HP was able to attain not only stability, but admirable growth in a short span of time, as witnessed by the fact that HP stocks have more than doubled in value since then. Just recently, Hurd moved to try and further expand business and market for the company through a series of mergers and acquisitions. For someone so talented, an executive leader that Wall Street analysts had deemed a ‘stop-loss executive’, the board of directors over at HP would really chase him away over an offense of less than $20,000?  Could this happen in China?

Don't we all say that good talents are hard to come by? Then talented entrepreneurs like Hurd, who has proven to be a capable leader, are even harder to find. Why doesn't HP appreciate their own talent? This is our big question number four.

Perhaps we should ask Hurd to come and teach the things we have failed to understand to us and our business leaders. Former chairman of Sinopec Chen Tonghai obviously doesn't need the lesson anymore. When Chen was in office, he used to spend 40,000 RMB a day treating personal guests and wrote it off as legitimate business expenditure. If he had not gotten caught embezzling nearly 200 million RMB on the side, no one would have cared if he wrote off double that amount a day showering gifts on his friends and mistresses. Falsified receipts and irregular expenses are nothing new in China. Heck, companies here have little safes for embezzled funds, and no one so far has been able to eradicate greed, no matter how many people have landed in jail under anti-graft crackdowns.

 

Falsified receipts and safes for embezzled funds are not only a regular thing in companies, but are also very much a part of operations for different organizations, all the way up to the state government here. Not too long ago, the National Audit Office publicized a report saying that expense irregularities for some of the major government offices have reached over several hundred million RMB. If our government was like the board of directors with HP, how many of our officials would have to resign? If all of our CEOs and officials were like Hurd, willing to step down from office at the first indictment of falsified company expenses, realize that their actions had compromised the trust, respect, and righteousness that had been entrusted them, then the audit office and the disciplinary committee wouldn't have to work so hard checking and warning people against corruption.

We would like to welcome Mr. Hurd to China, even now that you've resigned. We welcome you to come and share with us and our business leaders your stories about success and failure.
 

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Source: ifeng.com

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Keywords: corruption in China falsified receipt sexual harassment resign Mark Hurd