The Lessons of the Mark Hurd Debacle: 7 Tips to Prevent Ethical Failures of Leadership in Organizations

ATLANTA (August 11, 2010) Former HP CEO Mark Hurd's resignation after a sexual harassment

investigation turned up other alleged misdeeds may hold ethical lessons for all senior executives, managers and employees at every level of organizations. That's the view of Stephen M. Paskoff, Esq., president and CEO of ELI, Inc., an Atlanta-based provider of award-winning learning solutions that help organizations build and maintain inclusive, productive and ethical workplaces. "In today's zero-tolerance, 24/7 news environment, where no secret is secret, at least not for long, leaders fall prey to the same penalties that others do in their organizations," said Paskoff, author of the 2005 book, Teaching Big Shots to Behave and Other Human Resource Challenges. "CEOs may get paid more in severance to leave. However, the more prominent their position, the steeper, faster and public their fall whenever they commit obvious ethical lapses." In his latest blog post, Paskoff offered his perspective on the Hurd debacle and 7 tips for preventing ethical crises in leadership:

Leaders need to be on heightened guard for the most basic rules of conduct. Most catastrophic executive blunders arise from violations of simple principles and rules. Assuming there's no merit to the sexual harassment claim against Hurd, the key principles in his case here are to tell the truth, don't fabricate records and don't use organizational resources for personal purposes.

Senior executives must follow the rules no exceptions. No matter how great their business talents, they cannot effectively lead if they violate the organization's key principles and values. In other words, they must act with integrity, tell the truth and guard their words and actions in all professional interactions tied to business.

The more prominent your position, the more vulnerable you are to claims and charges whether true or false. The misdeeds of powerful leaders create greater public relations interest, scrutiny and claimant leverage than those of others in less visible or powerful positions.

The most critical issue isn't the legal risk, but the harm done to an organization's reputation, brand and credibility, not to mention the personal damage done to the career and reputation of the leader. In this case, the damage is clear: HP's current decline in stock value, the uncertainty created by the scandal and the resulting leadership vacuum.

Leaders need training and refreshers on ethics like everyone else. Leaders can't be too busy to learn the basic lessons on ethics, compliance and values and to recognize that they apply to them, not just to others.

The organization must get the facts and if wrongdoing is found, hold people accountable. We don't know all the facts, but we do know that HP promptly investigated the matter, brought in outside counsel, involved its directions, took decisive action after considering the facts, made a clear statement about their decisions and acted with utmost discretion.

Board leaders must make clear to executive teams that they will be judged on their actions and behavior as stewards of organizational values and brand reputation, not just on their quarterly business results.

"Certainly, this won't be the last time that a CEO ends up as the punch line for a late-night comedian's jokes," Paskoff said. "Whether we are a senior executive, aspire to such a position, serve as an HR leader, or work as a middle manager or line employee, we can clearly see the Hurd situation as a cautionary tale and absorb the lessons there for us all."

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1.02.28

The Lessons of the Mark Hurd Debacle: 7 Tips to Prevent Ethical Failures of Leadership in Organizations

By: Sheryl Roehl

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