You’ve likely seen the news reports about HP releasing their CEO, Mark Hurd, amid allegations of sexual harassment, but what you may not have heard is that there is buzz in the industry about the wisdom of that action. Larry Ellison, Oracle’s CEO publically denounced the decision stating that HP made an “epic blunder” by releasing Mr. Hurd. In an impassioned letter to The New York Times, Mr. Ellison stated,

“The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago…In losing Mark Hurd, the HP board failed to act in the best interests of HP’s employees, shareholders, customers and partners. The HP board admits that it fully investigated the sexual harassment claims against Mark and found them to be utterly false.”

While Mr. Ellison is correct in that the sexual harassment allegations were proved to be false, it was discovered that Mr. Hurd had an affair with a previous contractor responsible for marketing issues and falsified expense reports to ensure she was paid for work not completed and to hide the affair.

As for Mr. Hurd, he stated, “It was a “painful decision” to leave but acknowledged “there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP.” And therein lies the wisdom of the ouster. Although Mr. Ellison is a loyal friend to Mr. Hurd and appears concerned for the stockholders of HP, had this situation been glossed over and hidden the long term effects could have been even more devastating for not only their stockholders but their stakeholders as well.

Leaders must earn and maintain the respect of their stakeholders, otherwise it’s only a matter of time until the tapestry so carefully woven comes unraveled. So, while this moment in time is no doubt painful for HP and their stockholders, the decision to do the right thing is never a bad one.