The financial press has been in a frenzy over allegations of improper methods employed in connection with investigations at Hewlett-Packard Co. into leaks of confidential company information. No doubt, many commentators will pontificate about how the investigations should have been handled. These events, however, provide an opportunity to review another important corporate-governance issue — namely, the obligation of directors to preserve the confidentiality of company information. Unauthorized disclosure of company information can lead to the end of a director’s tenure on the board and invite scrutiny from regulators, shareholders and litigants.

New details continue to emerge about the HP internal investigations. Reports to date demonstrate that HP had a recurring concern about the unauthorized disclosure of company information. In January 2005, the Wall Street Journal published a front-page article discussing the details of HP board deliberations that had transpired during a recent retreat. Suspecting that board members had leaked information, then-Chairwoman and Chief Executive Officer Carly Fiorina sought to identify the source of the leaks. Fiorina reportedly questioned the directors and later retained outside counsel to interview them, yet no one confessed.

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