Why ethics makes good business sense

Another corporate scandal - this time at one of the more respected companies - HP. As the story goes, HP found out that one of its board members was leaking confidential information. They hired private investigators to find the source of the leak, and probably gave them carte blanche. What the PI's then did was to impersonate the directors and obtain telephone records and other personal data on seven directors, nine journalists, two employees as well as family members of those targeted individuals.

To add insult to injury, the HP board simply dithered over taking any concrete action once the scandal was outed. And even before that when they knew that the PI's had overstepped the line by a big margin.

Now, Patricia Dunn who headed the board and oversaw the investigation has been asked to resign, and Mark Hurd has taken over. Hurd then comes out with a statement on the scandal, which has some real gems in it:

"I understand there is also written report of the investigation addressed to me and others but I did not read it. I could have, and I should have."
A director is implicated as being the source of leaks. A high level investigation is launched. A written report of that investigation is available, and Hurd says he knows about the report, but didn't read it!

"In, I believe, February 2006, I was informed by the investigation team that they intended to send an email containing false information in an effort to identify the source of the leaks. I was asked to, and did approve the naming convention that was used in the content of that email. I do not recall seeing nor do I recall approving the use of tracer technology."
What's naming convention?

He refused to take questions about it later on.

While pressures from Wall Street, venture capitalists, customers and employees always creates an emphasis on results, when those results come at the cost of corporate ethics, you know the truth will out someday, and the shit will hit the ceiling fan. Even now, HP should have made a clean breast of the entire situation, given that they're going to have to answer a Congressional committee on the same issue, and more "facts" will come tumbling out.

If nothing else, ethics in business makes sense because you know that the fallout from the truth emerging into the public domain will probably create a far greater loss than the gain you are looking at. In HP's case, they were of course motivated not by financial gain, but from the eventual cost of sensitive information being leaked out. The question that begs to be asked is which loss will be greater?