Move over Mark McInnes. Six weeks after Australia’s David Jones terminated its former CEO for alleged sexual misconduct towards a junior publicist, Hewlett-Packard forced out its highly admired CEO Mark Hurd after an investigation revealed alleged instances of falsification of expense reports in what was described as an attempt to cover-up a “close personal relationship with an HP contractor”.

Hurd, 53, the former salesman who oversaw a remarkable turnaround at HP, last Friday resigned as chief executive of the electronics giant after an internal investigation revealed “numerous instances” of misconduct. The investigation also revealed that an identified worker had received funds “where there was not a legitimate business purpose”. The woman in question is understood to have been a contractor who assisted Hurd with profiles of potential customers prior to events.

Gloria Allred, the celebrity attorney representing the alleged victim stated that “there was no affair and no intimate sexual relationship” between her client and Hurd. However, the legitimacy of those claims have come under question, given they came after an alleged settlement was reached between Hurd and the woman. Further, the investigation itself was initially triggered by a written complaint from the woman on June 29, 2010. The denials are also contrasted by an article in Silicon Valley’s Mercury News,  which stated that the victim had earlier “complained to HP that she felt pressured to have sex with Hurd and feared she might lose her work with the company if she did not comply”.

Hurd’s actions have come at an immediate cost to HP shareholders — after his departure was announced, almost 10% was wiped from the company’s market capitalisation. In dollar terms, Hurd’s behaviour could be the most costly corporate cover-up in business history, wiping about $US10 billion from HP’s market value.

In his resignation announcement, Hurd stated that, “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.” Hurd added, “this is a painful decision for me to make after five years at HP, but I believe it would be difficult for me to continue as an effective leader at HP.”

Unlike the McInnes incident, Hurd did not admit to any instances of sexual harassment (and it is believed that HP actually cleared Hurd of the initial harassment claims). Others expressed their surprise at Hurd being implicated in such events, with former HP board member Tom Perkins describing Hurd as “low-key and humble and all that” and that “they called him the Anti-Carly” — a reference to Hurd’s controversial predecessor Carly Fiorina.

Like McInnes, Hurd had been a highly respected senior executive, assuming the reins at HP after the turbulent Fiorina-era. When Hurd became CEO in February 2005, HP’s share price was $US19 per share, before his resignation HP shares were trading at $46 per share. During that period, the Dow Jones Index fell slightly. In his five years in the top role, Hurd cut almost 40,000 jobs, and acquired Mercury Interactive, Electronic Data Systems, Palm and 3Com. Since 2005, HP’s revenue rose from $US92 billion to $US114 billion and its earnings-per-share doubled.

While the financial performance of HP under Hurd has been praised, his tenure at HP was not untouched by controversy. Shortly after becoming CEO, in 2006 Hurd became embroiled in a bugging scandal that arose after the HP allegedly used false pretences to obtain the communication records of board members and nine different reporters in an attempt to determine the source of various press leaks. A long-time critic of Hurd and author of The Big Lie, Anthony Bianco, said that the former CEO was a man “of questionable ethical character of the sort that would be a problem for HP again” and that he was the type of CEO who “cuts corners ethically”.

Hurd was also an example of the corporate governance failing of appointing the CEO as chairman of the board of directors. Hurd had assumed both roles shortly after the phone-records scandal and the departure of former chairperson Patricia Dunn. The joint CEO-chairman role is highly uncommon in Australia but is often practised in the United States.

Despite the circumstances surrounding his departure, Hurd is not leaving HP empty handed. He received a severance package of $US12.2 million, while remuneration consultant Frank Glassner told Bloomberg that “Hurd stands to receive $40 million to $50 million before the end of the year”. Hurd was paid $US42.4 million 2008 and $US30.3 million in 2009.

Hurd has been temporarily replaced by HP’s former CFO Cathie Lesjak, a 24-year veteran of the computing giant.