Try a Little Sympathy For H.P.’s Patricia Dunn

“I hope I live long enough to see my reputation cleared,” Patricia Dunn, the recently fired chairwoman of Hewlett-Packard, told the press. If her words were a bid for sympathy, she’s been getting precious little of it.

Ms. Dunn is presently under indictment on four felony counts coming out of the uproar about spying on fellow corporate board members to find out who leaked board business to the press. In the course of finding out, private detectives hired by Ms. Dunn misrepresented themselves to board members to gain access to their telephone records. This form of inquiry is called “pretexting” and is probably illegal—at least in California, where H.P. is based.

Ms. Dunn, as the person who put this nonsense into motion, is the most conspicuous indictee; thus far, H.P.’s ethicist has escaped the long hand of the law. There are three others, including Ann Baskins, the corporation’s general counsel. Both women have much to fear in the indictment brought by Bill Lockyer, the State Attorney General and a man with a streak of vengeance in his heart. Speaking of the late Enron C.E.O. Kenneth Lay at the height of California’s electricity crisis, Mr. Lockyer once told The Wall Street Journal that he would “love to personally escort Lay to an eight-by-10 cell that he could share with a tattooed dude who says, ‘Hi, my name is Spike, honey.’”

Ms. Dunn is in no position to take on Mr. Lockyer in a battle that she cannot win, even if she is acquitted in court. She has been diagnosed as having Stage IV ovarian cancer. In August, she had an operation on her liver to remove the cancer that had spread there. Prior to this ordeal, Ms. Dunn has had bouts with breast cancer and melanoma. We do not have to be told what, on top of all this, a court battle to stay out of jail will do to a person’s resources—physical, spiritual and financial. Perhaps Ms. Dunn is a candidate for a little sympathy.

She wasn’t born into money. Her father died when she was young, and her mother, a former Las Vegas showgirl, apparently wasn’t very good at making a living. There was a period when she was reduced to living in her car. Nevertheless, her daughter succeeded in working her way through college. Ultimately, she got into money management of a cautious, risk-averse sort, rising to become the C.E.O. of Barclays Global Investors. She seems to have been a businesswoman who was strict on the details, who obeyed the rules, someone who tried to get it right by the book, whatever it was.

Eight years ago, she joined the board of Hewlett-Packard, one the greatest and most solid of Silicon Valley companies. A year later, the board picked Carly Fiorina—a diva of a personality with a background in sales—to be its new C.E.O. and chairwoman. After a dreadful battle with her own stockholders, Ms. Fiorina brought off a major merger, but H.P.’s business suffered and, in due course, the lady was shown the door by her board. Mark Hurd was recruited from NCR, another electronics-manufacturing corporation, and installed as the new C.E.O., but not board chairman. That position went to Ms. Dunn.

The company has prospered under Mr. Hurd, with Ms. Dunn, by most accounts, trying her utmost to be a model chairwoman. According to The Wall Street Journal, “She studied a British book on governance, attended directors’ workshops at Stanford University and hired consultants to update board handbooks. Her first thought, she says, was: ‘How do I avoid screwing up? Failure-avoidance has been a large motivator my whole life.’”

Failure-avoidance became disaster-confluence when she tangled over long-range company policy with fellow board member and self-made billionaire Thomas Perkins, a man who, by most accounts, seems to be both very gifted at making money in electronics and a grade-A prick.

Starting in 2005, leaks of boardroom material would appear in the media on occasion, none of it of great consequence—but the fact that someone was making public what was supposed to be private was too much for a board whose members were barely talking to each other. Rather than letting the matter drop, it was decided that the leaker had to be found—and in the process, all of the board members got snooped on. For Mr. Perkins—who was not the leaker, but who is the kind of rich jerk that owns a 290-foot private ocean liner—these intrusions were the weapon he’d long sought to get rid of Ms. Dunn. As Mr. Perkins himself said: “My No. 1 thing was to get Pattie out as chairman, and I got that. So I’m happy.”

The news that Ms. Dunn, H.P. and a bunch of flapdoodle private eyes were sniffing around where they didn’t belong touched off a great puff of gaseous indignation. Since then, much has been said about invasions of privacy, and many worried editorials have appeared—but if we stop and recollect, we will soon see that there is almost no privacy left in our country. We have moved decisively away from being a nation where a person could disappear, go west, bury the past and start life over again. It’s not true that what happens in Vegas stays in Vegas: You can’t pick your nose in your own bedroom without it being recorded and saved on somebody’s C: drive. Even in a plutocracy, billionaires like Mr. Perkins cannot completely disappear from view.

Privacy is of relatively recent invention. You might date its beginnings from the days when houses with bedrooms began to be commonplace, which is not so very long ago in America. Business, however, has never much cared for other people’s privacy, for the simple reason that the more you know, the lower the risk. Snooping into other people’s lives became an ordinary business activity in the United States in the early 1840’s, when Lewis Tappan established the Mercantile Agency, a company that scooped up the skinny on businessmen and sold it to bankers and others who wanted to know more about those with whom they were thinking about making a deal. Since a considerable amount of the skinny was gossip, Tappan’s efforts—like Ms. Dunn’s—weren’t well received in all quarters. The New York Herald editorialized that Tappan’s operation was “an office for looking after everybody’s business but his own.”

More important than the snoopage taking place at H.P. is the trouble this board has had. The board chairman is not the chief operating officer, in accordance with what is deemed the best practice. This was not a rubber-stamp board or a board of the C.E.O.’s pals or indifferent celebrities. By most descriptions, it is what you might think of as a modern board—that is, a post-Enron board, one trying to function within the constraints of the Sarbanes-Oxley Act of 2002, the legislation passed to force corporate officers and directors to take greater responsibility for what their organizations do or lay themselves open to painful legal consequences.

“SOX,” as Sarbanes-Oxley is called in the trade, has picked up a host of detractors who insist that its demands for various filings with the government are too expensive and too psychically onerous for the hard-charging corporate executive. Be that as it may, it has made it more hazardous to cheat the stockholders and fling buncombe instead of information at investors, bankers and other interested parties.

Neither SOX nor anything else has solved the corporate governance riddle. And the public has more than a passing interest in how these institutions are run, some of which enjoy enough power to make a dictator gape.

There is not yet an ideal way of selecting the members of a board of directors. Boards, when they are not creatures of the C.E.O., are self-perpetuating mini-clans. Stockholder elections are pretty much like North Korean elections—except when the rare proxy fight develops.

At one time in the 19th century, voting arrangements were not as they are now, with each share of stock getting one vote. Then, every shareholder—regardless of how many or how few shares that person owned—got one vote. If the modern corporation were required to return to this practice, elections for board members might cease to be a pro forma joke and become something akin to a meaningful process.

We might also consider having a public board member in corporations over a certain net worth. This person would have to have gone through a training program of considerable rigor or his or her presence on the board would be meaningless. The public member shouldn’t have the right to vote, but would have the right to express an opinion and to sit on the most important board committees, such as the audit and compensation committees. The public member’s remarks to fellow board members would remain sealed, unless the topic was one that elicited lawsuits—and then what was said at the time by the one neutral member could be made public and used.

Whether any of this would have helped matters at H.P. is doubtful. There are some things that are past legislating. Collisions will occur because money is involved and people cannot agree—so what we are left with is Mr. Perkins floating around on his ocean liner, using up ungodly amounts of fuel and polluting the planet for his pleasure, and Pattie Dunn out of a job, left alone with her cancer.

Try a Little Sympathy For H.P.’s Patricia Dunn