Last week’s departure of HP’s well paid CEO on ethical grounds shows the corporate codes of conduct are now taken much more seriously, reports Francesca Boothby

Just days ago Mark Hurd, CEO of Hewlett-Packard was forced to resign following allegations he had failed to adhere to the company code of conduct.

An investigation by outside legal counsel and overseen by the board found that although he was cleared of any sexual harassment element, he had violated HP’s Standards of Business Conduct in connection to unpaid expenses and misusing company assets.

This case draws attention to the effective application of a corporate code of ethics. HP’s board has also come in for severe criticism for apparently failing to grasp that dismissal, termination “for cause” was an option. As things stand the company has had to pay over $30 million in compensation, money that effectively comes out of profits to shareholders. Termination would have cost the company a lot less.

Although not a legal requirement, codes of conduct are something most companies today impose as a way of guiding behaviour. As Simon Webley, head of research at the UK Institute of Business Ethics points out, “ethics start where law and regulation finish”.

The case of HP and Mark Hurd shows the growing inclination for today’s boards to take ethics codes extremely seriously. His dismissal emphasises the modern importance of consistent communication across all levels of a company. The departure of Hurd, a previously well-respected boss, shows that corporate desire to protect brand and reputation means that no one, not even the CEO, is immune.

Further details are available at ethicalcorp.com.