HP Executive Resignation Raises Questions

It appeared as though Hewlett-Packard was recovering remarkably well from the self-inflicted public-relations catastrophe related to its ill-advised and legally dubious investigation into leaks from its board of directors to trade journalists and business reporters.

Perhaps HP remains well on its way to public rehabilitation, but two recent executive-level defections have made the news lately, and one of them might have been related to the corporate-espionage fiasco that saw HP proxies commit identity theft against board members and journalists.

Earlier this month, according to a report on MarketWatch.com, Todd DeLaughter, the former head of HP’s $1-billion OpenView software business, resigned from the company to become chief executive and president of Canadian business software company Opalis. DeLaughter had no known connection to the HP spying controversy, and his departure appears driven by a desire to be the CEO at an entrepreneurial startup rather than serve as head of a business unit within one of the technology industry’s largest players.

The other executive departure occurred this past Wednesday. It involved Steve Smith, senior vice president and general manager of HP Services, a $15.5-billion business unit that provides technology consulting, support, and outsourcing. According to an HP source, Smith, who joined HP in January 2005, resigned for "personal reasons."

When asked whether Smith’s sudden resignation was related to the company’s boardroom scandal, which has seen the departure of several high-profile HP executives, including General Counsel Ann Baskins, a company spokeswoman refused to comment.

If Smith’s departure had nothing to do with the boardroom scandal, HP should have replied with a simple "no" to that question. By issuing a terse "no comment," HP has assured that journalists will keep digging.

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