It’s Time for Oracle to Update Its Code of Conduct and Values

Last week, Oracle announced that it had hired Mark Hurd as one of the software giant’s presidents and a member of its Board of Directors. The move came a month after Hurd’s dismissal from Hewlett-Packard. This is a stunning, perhaps unparalleled, reversal of CEO fortunes.

While Hurd’s undeniable business talents are not in question, Oracle’s hearty and rich endorsement of him within a month of his very public firing for ethical breaches sends a troubling message.

When HP fired Mark Hurd as CEO, Larry Ellison, Oracle’s CEO, denounced the dismissal as a blunder of epic proportions. I disagreed with Ellison’s assessment then given the finding by the HP board that Hurd had submitted falsified expenses, lost the board’s trust and engaged in other improper conduct, though not harassment, in his relationship with a contractor, Jodie Fisher.

Hurd’s own Aug. 14 statement admitted, “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 which have guided me throughout my career.”

To a degree, it’s Oracle’s own choice how to run the business, who it hires, and how it applies its rules. At the same time, Oracle is a publicly traded company with nearly 50,000 employees and a major industrial force, so how it operates is of public significance.

Making a joke of its values

In my view, Oracle needs to quickly amend its values, code of conduct and chairman’s statements or suffer well-deserved ridicule and charges of hypocrisy. Through its recent actions and public posturing, Oracle has made a joke of its values, undermined the credibility of its code of conduct and impeached its CEO’s own clear, written comments. I realize that’s a stern indictment. But let me suggest that it’s a result of Oracle’s own public statements.

Oracle’s Code of Ethics and Business Conduct, states that: “Oracle employees [must] demonstrate honesty and sound ethical behavior in all business transactions and personal integrity in all dealings with others.” Oracle’s code of conduct says it applies to all employees, and that leaders must serve as a model for proper behavior. Also listed as a violation of Oracle’s code: The falsification of company expense reports.

Finally, when I read Larry Ellison’s written introduction to the code of conduct, I find it laden with irony. (emphasis mine):

Our reputation and our success depends upon the personal commitment that each of us makes to uphold Oracle’s value and practice ethical behavior in all of our business dealings. All of us, regardless of employment level, position, or geographic location, are expected to make this commitment daily, both individually and collectively, to uphold the standards of business conduct outlined in this Code.”

Is Oracle’s Code of Conduct just empty words?

Those are the stated messages. But clearly something’s missing here. Otherwise, it would be impossible to justify Hurd’s hiring when measured against Oracle’s standards and the offenses in which he undisputedly engaged. Absent his successful financial track record and pertinent industry knowledge, it’s hard to imagine that any major organization would have hired Hurd as quickly as Oracle did.

Clearly, Oracle’s 34-page Code of Conduct and Ellison’s letter to employees are just empty words. In hiring Hurd, Larry Ellison’s actions speak much louder. In my view, what they are saying is:

Please understand that we’ll make ready exceptions to everything we’ve written here and all we say we’re about, provided we have a chance to make some big dollars or secure some other important business advantage. So take this all with a grain of salt. We use this stuff for PR purposes, recruiting and compliance. Warning: If you can’t make us lots of money or deliver big results here at Oracle, then yes, we really do mean what we say in the Code of Conduct and if you violate our rules, we’ll show you the door.

This is exactly the reasoning that brought us Enron, the financial meltdown, the mortgage crisis and all the other economic woes from which we’re still trying to untangle. But if that’s how public companies like Oracle intend to operate, I suggest they state it publicly.

Rules must be applied consistently at all levels

One commentator in The Atlantic suggested that Mark Hurd’s actions did not trigger the same breadth of disaster as Bernie Madoff, making it understandable why Hurd got hired. Apparently, you have to destroy the business or do something criminal before you are held accountable for unethical conduct. This makes no sense unless language of the kind suggested above is included as part of standard corporate protocol.

Instead, I agree with John Hollon here at TLNT: Hiring Hurd sends the wrong message, one that ultimately undermines business values and ethics.

If we want to avoid the catastrophes that have caused much of today’s current economic and social devastation, our leaders need to filter their decisions through the lens of their values and codes at all times, not just when it’s easy or the stakes are minor. It’s vital that rules be consistently applied at all levels in the face of serious misconduct, if they are to have any meaning at all.

Ironically, Hurd agreed to abide by Oracle’s Code of Conduct and take online training offered to all employees as conditions of his employment. Based on Hurd’s recent actions, I suggest Oracle revise its Codes to make it clear to him just exactly how this will apply to his conduct going forward.