Former HP CEO Mark Hurd was forced to step down from his post August 6 of this year on account of two violations of the company's ethical standards: the first involved a sexual harassment suit filed by a HP contractor (former reality TV actress Jodie Fisher), and the second involved the results of an internal investigation that uncovered expense-account irregularities (see also Huffington Post, NYT, Bloomberg, and HP).
The Atlantic characterizes Hurd as having had "quite a soft landing". Soft indeed: one month later, it has been announced that Hurd will be hired as the president of Oracle, the software company with the third-largest revenue in the world (after Microsoft and IBM; statistic from 2007).
This, it seems, does not speak well for the amount of concern being paid to business ethical considerations in Oracle's executive-level hiring practice. (The Atlantic, slightly more dramatically, suggests that this case might somehow "prove that business ethics don't matter".)
I now quote their interesting points in full, although again, it is worth noting that the stakes are perhaps not so high as they are set forth in the following.
While the accusations against Hurd sounded pretty bad, they boiled down to ethics. Ultimately, HP's sexual harassment probe found that he didn't violate the company's policy, but did violate its ethical standards. Oracle has responded to Hurd's poor judgment in areas other than management with a resounding -- so what? The company thinks Hurd's talent for business decision-making trumps his poor decision-making elsewhere.
Yet, in other situations, business ethics clearly do matter. It's easy to think of examples of businesses and individuals that don't recover, like Bernie Madoff and Enron. These ethical violations show something very different from Hurd's problems, however. Instead of using their superior talent and expertise, such firms or individuals must rely on fraud to bring in profits. The business community has no use for mere thievery as a means to make money. Anyone can do that; it's the brilliant minds that matter in the long-run.
So perhaps the lesson here is that business ethics only matter when they jeopardize business. Of course, sometimes these go hand-in-hand. A perfect example is Arthur Andresen. With an auditing firm, integrity is everything. If you lose that, you have no business, as the firm quickly found out. But in other businesses, where the profit motive is less connected to good ethics, that's not the case. Then, so long as poor decisions don't compromise profit, they will eventually be forgotten.