Tuesday, August 10, 2010

Heard at the FT: HP Board Overreacted (?)


My favorite financial newspaper weighed in today on HP's Board's dismissal of Mark Hurd via this comment in the Lex column:
But the safe decision is not always the right one. Mr Hurd was, by most accounts, a superb executive. HP’s shares had outperformed the technology-heavy Nasdaq Composite ninefold since he took over in 2005 and net income grew handsomely. There is no evidence that Mr Hurd cut any ethical or legal corners while presiding over this success. Indeed, his transgressions appear minor enough to have warranted little more than a slap on the wrist at most American companies.
Indeed, one is tempted to say.  Yes, there is a culture of toleration of "mistakes" at most American and most other companies.    Or perhaps a cutting of a corner on a rule.   All as long as the concerned employee is generating the revenue.

After all imposing small minded constraints might limit the creativity and motivation of such corporate high fliers.    Expense rules can be safely ignored.  Dealing limits.  Restrictions on the use of recreational drugs.  How many of out there can recall seeing a "golden" boy or "girl"  on the trading room floor with "talcum powder" on his or her shirt after a trip to the rest room?  Like the athlete on the parallel bars, a little talcum keeps your hands from slipping!

Indeed all minor.  A gentle slap on the wrist and back to revenue generation. 

Of course, for the not so golden or high ranking members of staff,  understanding is a bit more constrained.  And justice more swift.

As it's known out there, checkbook morality:  "If it pays, it plays".

One can always find the small minded (like AA) out there.  Here are couple of more from the FT .

2 comments:

Laocowboy2 said...

The following question posed to a senior Merrill Lynch officer at a staff conference on professional standards in the late 1980s did little for the promoion (or retention) prospects of the questioner.

"Can you assure us that a dealer who breaks his limits and makes a $100mn profit will be fired for cause?"

Perhaps if the question had been answerd with a "Yes" ML would still be around as an independent company today.

Abu 'Arqala said...

Greed often leads to stupid. And stupid generally results in disaster.