Hurd's surprise settlement with accuser contributed to ouster

Former HP CEO Mark Hurd's move to settle with Jodie Fisher contributed to his firing, those close to the company's board told the Wall Street Journal on Monday. Sources say Hurd was told several times in the three weeks proceeding his ouster to settle Fisher's claims.

Board members felt that Hurd was not fully cooperating with their attempts to investigate the matter, and the settlement stopped their investigation prematurely. Fisher has said that there was no intimate relationship, however at the same time what exactly she had accused Hurd of has never been fully disclosed.

Initially the board did find Fisher's complaint meritless, however further investigation opened up questions of misconduct by Hurd. This included finding evidence that he had used company PCs to view films starring Fisher. It should be noted that Fisher did spend some time as an adult film star.

Such statements from those close to HP's board should not be surprising. The company has gotten a good deal of backlash, both from its shareholders -- who have even filed suit -- and Hurd confidant and Oracle CEO Larry Ellison. Those close to the board may feel that getting their side of the story out could help their cause.

Another source that was close to the former CEO claims that Hurd had cooperated with the board, however he was not permitted to respond directly to any inquiries. Sources close to the board dispute this, saying he himself declined to speak with the board.

They also add that the Fisher scandal was not the only reason he was fired, saying Hurd's behavior leading to the settlement had already all but disqualified him to serve as the company's CEO. This included the failure to disclose a personal relationship with a contractor, and falsification of expense reports.

HP's board believed that disclosing the matter fully was the most appropriate course of action to prevent any backlash. Hurd apparently disagreed. This was likely where the rift between the board and Hurd began. Hurd's settlement effectively ended the investigation because Fisher had signed a confidentiality agreement and absolved HP of any responsibility.

It was this -- and not a look at the facts -- that contributed to HP's decision that the sexual harassment claims were meritless, WSJ sources suggest.