Hewlett Packard has made news again. The company has been hit with a lawsuit after an $8 billion write-off from its new software unit, Autonomy. Allegedly, Autonomy's financials were off and HP's accountants had not discovered the discrepancy. There has been plenty of finger pointing since then between Meg Whitman and Autonomy's former CEO, Mark Hurd. The latter is screaming bad management on the part of HP and the former is making accusations of intentional deception. The story is expected to get a lot more interesting as it unfolds.
This news will have serious ramifications across the industry. Since the Enron scandal, there have been calls for increased legislation to curb fraud. Ethics classes have proliferated and politicians are more divided now than ever: to regulate or not? As expected, liberals are in favor and conservatives are not.
There may be another solution: more women directors. Turns out companies led by females are less likely to restate their financial statements by 38 percent. A gender inclusive board is more engaging and gives the CEO a good argument. Decisions are deliberative and strategic, leading to less errors.
Sounds like a good deal. Only problem is, HP is run by a woman. How that fits into the new study is a mystery, but maybe this situation can be considered an outlier.