Financial Times Editorial - HP's stupid pretexts
Financial Times Editorial - HP's stupid pretexts
Copyright The Financial Times Limited 2006
Published: September 13 2006 03:00 | Last updated: September 13 2006 03:00
Leaks are bad. They might be good for journalists but they are not good for corporate America. As the well-deserved public shaming of Hewlett-Packard continues, with Tuesday's announcement by the company that Patricia Dunn, its chairwoman, will be stepping down next January, it is easy to lose sight of the fact that HP had every right to try to staunch the illicit flow of sometimes sensitive information from its boardroom. In such circumstances, chairmen (and women) have an undisputed right to snoop; it just matters how it is done.
Ms Dunn, of course, handled things remarkably badly. She should have made it her business to know exactly how her hired snoops were planning to do her dirty work. Instead she claims - disingenuously or, at the very least, naively - that she did not know they were going to "pretext" or fake their identity, to obtain private phone records. She claims never to have heard the word until the scandal broke - as though ignorance of the term is a defence for what happened. HP should have been making the decisions on how the investigation was handled - not a bunch of gumshoe detectives.
Now the attorney-general of California, the justice department and Congress have opened investigations into whether HP broke the law. But that scarcely matters: what HP did was wrong, not to mention short-sighted and, as the California attorney-general has aptly said, "colossally stupid".
US companies sometimes need to snoop on directors. They have a fiduciary duty to do so: boards that leak trade secrets must be silenced. And as Ms Dunn herself rightly said: "A board can't serve effectively if there isn't complete trust that what gets discussed stays in the room." But every good chairwoman knows her snooping must stay not just within the law but within the bounds of propriety and good judgment. The HP probe fails the smell test.
Still, this cloud could have a silver lining - if not for HP, then for the rest of us. The scandal has made it impossible for anyone ever to say again that they do not know what "pretexting" is. Legislators in Washington and California recently failed to pass laws against this dubious practice, which allows almost any of us to obtain our neighbour's phone records through what amounts to fraud and without any penalty. But the HP scandal has focused federal and state attention on this shocking practice, and eventually legislators will almost certainly respond.
Phone companies also can and should do more to protect the often intensely private details contained in our phone records. Banks and financial institutions do not give away private information to anyone who comes asking. Phone companies could do much more to protect our privacy - whether or not they are forced to do so by a Congress that, two months shy of the next election, has its mind on other things.
Copyright The Financial Times Limited 2006
Published: September 13 2006 03:00 | Last updated: September 13 2006 03:00
Leaks are bad. They might be good for journalists but they are not good for corporate America. As the well-deserved public shaming of Hewlett-Packard continues, with Tuesday's announcement by the company that Patricia Dunn, its chairwoman, will be stepping down next January, it is easy to lose sight of the fact that HP had every right to try to staunch the illicit flow of sometimes sensitive information from its boardroom. In such circumstances, chairmen (and women) have an undisputed right to snoop; it just matters how it is done.
Ms Dunn, of course, handled things remarkably badly. She should have made it her business to know exactly how her hired snoops were planning to do her dirty work. Instead she claims - disingenuously or, at the very least, naively - that she did not know they were going to "pretext" or fake their identity, to obtain private phone records. She claims never to have heard the word until the scandal broke - as though ignorance of the term is a defence for what happened. HP should have been making the decisions on how the investigation was handled - not a bunch of gumshoe detectives.
Now the attorney-general of California, the justice department and Congress have opened investigations into whether HP broke the law. But that scarcely matters: what HP did was wrong, not to mention short-sighted and, as the California attorney-general has aptly said, "colossally stupid".
US companies sometimes need to snoop on directors. They have a fiduciary duty to do so: boards that leak trade secrets must be silenced. And as Ms Dunn herself rightly said: "A board can't serve effectively if there isn't complete trust that what gets discussed stays in the room." But every good chairwoman knows her snooping must stay not just within the law but within the bounds of propriety and good judgment. The HP probe fails the smell test.
Still, this cloud could have a silver lining - if not for HP, then for the rest of us. The scandal has made it impossible for anyone ever to say again that they do not know what "pretexting" is. Legislators in Washington and California recently failed to pass laws against this dubious practice, which allows almost any of us to obtain our neighbour's phone records through what amounts to fraud and without any penalty. But the HP scandal has focused federal and state attention on this shocking practice, and eventually legislators will almost certainly respond.
Phone companies also can and should do more to protect the often intensely private details contained in our phone records. Banks and financial institutions do not give away private information to anyone who comes asking. Phone companies could do much more to protect our privacy - whether or not they are forced to do so by a Congress that, two months shy of the next election, has its mind on other things.
posted by Carlos T Mock @ 9:05 PM
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