Home Library Translate
A A A
Share »
Follow us on Facebook Follow us on Twitter Follow us on LinkedIn
Connect »

Blog: Business Ethics, Culture and Performance

Menu

  • This Blog's Home
  • Guest Writer Submissions
  • Policies
  • To Subscribe to a Blog
  • About
  • Feedback

The Power of the Lowly Expense Report

By David Gebler on August 8, 2010

The speed of the announced departure of Hewlett Packard CEO Mark Hurd was in and of itself newsworthy. At first blush it would seem that an action by a leader to warrant such fast response from a board must be quite nefarious; if not fraud, then at least a juicy sex scandal. Instead, as was reported in the Wall Street Journal:

H-P said Friday that Mr. Hurd, 53 years old, didn’t violate the company’s policy regarding sexual-harassment but submitted inaccurate expense reports that were intended to conceal what the company said was a “close personal relationship” with the contractor.

Expense Reports? One CEO friend of mine mused that it would be one thing if Hurd had claimed personal expenses as business expenses in order to hide a liaison from his wife. That would be fraud, even if it was a small amount. But mere false categorization? “That’s absurd,” he said, “to fire a successful leader for not mentioning this contractor on his expense reports.” However, nothing can be farther from the truth.

I give tremendous kudos to the HP Board for taking such swift action on something that might seem so small.

Unlike opportunities for major fraud, which really can only be carried out by a small number of people, expense report violations is something that is within the domain of thousands and thousands of HP employees. False expense reports may seem minor, but it is often the place where larger crimes start, and can serve as a convenient hiding place for many varied violations.

Several pharmaceutical companies have recently paid hundreds of millions of dollars to settle claims by the FDA of kickbacks to doctors. The place where these violations appear: expense reports.

Moreover, there is no more powerful negative influence on a workforce than perceptions of unequal treatment of senior leaders. If a junior manager could be disciplined or fired for the kind of violation that mark Hurd engaged in, and if he was only given a slap on the wrist, the reverberations of inconsistent treatment spread like wildfire. Employees are willing to make sacrifices for the company and to even look out for the company’s interests over their own, but only when they feel they are being treated “fairly.” Once an event occurs that gives them grounds to perceive they are being “suckered,” then all that commitment vanishes in a flash. It’s back to looking out for #1.

The Board did the right thing, signaling to all HP employees that no one, even the CEO is exempt for holding to the stated standards of business conduct.

« Previous Next »

Search Our Site

Meet this Blog’s Host

Carter McNamara of Authenticity Consulting, LLC, provides organizational development, consultant training and Action Learning services, and is developer of the Free Management Library. [Read more ...]

Recent Blog Posts

  • Can there ever be too much transparency?
  • Different “Schools” of Ethics
  • Combating the Hero Worship Culture at Penn State: the NCAA Got It Exactly Right
  • Get to the Start of the Slippery Slope
  • Cost of a Culture of Fear? $500 million for starters
  • The Power Values that Drive Sustained Profitability
  • What are your organization’s “Broken Windows”?
  • Ethics 2012 – The Forecast is Cloudy
  • What are Values, Morals, and Ethics?
  • Is News Corp Past the Tipping Point?

Categories of Posts

  • Basics and Overviews
  • Codes of Conduct
  • Culture Risks
  • Ethical Behavior
  • Ethical Dilemmas (Resolving)
  • Ethical Dilemmas (Resolving)
  • Ethics Training
  • General Resources
  • Governance
  • Uncategorized
  • Values
    • Commitment
    • Integrity
    • Transparency

Related Library Topics

  • Benefits of Strong Ethics
  • Business Ethics (Overview)
  • Business Ethics Basics
  • Codes of Conduct
  • Codes of Ethics
  • Cultural Change
  • Ethical Dillemas (Resolving)
  • Ethics Programs
  • Ethics Training
  • Roles in Ethics Management
  • Social Responsibility

Library's Blogs

  • Boards of Directors
  • Building a Business
  • Business Communications
  • Business Ethics, Culture and Performance
  • Business Planning
  • Career Management
  • Coaching and Action Learning
  • Consulting and Organizational Development
  • Crisis Management
  • Customer Service
  • Facilitation
  • Free Management Library Blogs
  • Fundraising for Nonprofits
  • Human Resources
  • Leadership
  • Marketing and Social Media
  • Nonprofit Capacity Building
  • Project Management
  • Quality Management
  • Social Enterprise
  • Spirituality
  • Strategic Planning
  • Supervision
  • Team Building and Performance
  • Training and Development
About Feedback Legal Privacy Policy Contact Us
Free Management Library, © Copyright Authenticity Consulting, LLC ®; All rights reserved.
  • Graphics by Wylde Hare LLC
  • Website maintained by Caitlin Cahill

By continuing to use this site, you agree to our Privacy Policy.X