The Holston Factor

The role that HP General Counsel Michael Holston played in the belated downfall of CEO Mark Hurd is worth highlighting. As detailed in The Big Lie, Hurd probably deserved to be fired as early as 2006, his second year in office, for his part in HP’s errant leak investigations and the ensuing cover-up. That he not only survived the Spygate scandal but managed to consolidate his hold on power by taking the chairmanship away from Pattie Dunn had a lot to do with Holston, who at the time was a partner in the Philadelphia law firm of Morgan Lewis & Bockius.

HP’s demoralized board of directors made a big mistake in failing to hire an outside law firm to do a thorough and truly independent investigation of the Spygate fiasco. Shrewdly, Hurd filled the gap by hiring Holston and his firm. About this, at least, he was forthcoming. “Morgan Lewis reports to me, not to the HP board,” he announced at a press conference. Somehow, reporters failed to recognize the fatal flaw in this arrangement. There was no way that Holston could organize a genuinely independent probe while reporting to someone who should have been a principal target of investigation.

Just a week and half after Hurd had brought in Holston, the lawyer appeared at a hastily organized press conference timed to coincide with Dunn’s forced resignation from the board. Although Holston conceded that Morgan Lewis had not completed its investigation, his selective recitation of the facts of the matter created the erroneous impression that Dunn had taken a much larger role in managing the leak investigations than Hurd had. Holston took no questions from reporters and HP never released Morgan Lewis’s report. It’s not clear, in fact, whether the law firm ever completed its investigation and wrote up its findings. Hurd was pleased with Holston’s work, even so. Not long after the press conference, Hurd fired Ann Baskins, HP’s longtime general counsel, and replaced her with Holston.

When Hurd received Jodie Fisher’s letter accusing him of sexual harassment, he did the right thing in turning it over to Holston. HP’s legal department investigated, assisted by outside counsel, only this time Holston reported to the board, not the CEO. Holston’s harsh assessment of Hurd figured prominently in news reports of his firing for padding his expense account to mask his improper relationship with Fisher. Hurd demonstrated a “profound lack of judgment that seriously undermined his credibility,” Holston said.

Better late than never, I guess.

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