Business ethics

At HP we want to be a company that is known for its leadership in corporate ethics and responsibility. A company where employees are proud to work, and customers, partners and suppliers want to do business with.

Trust and respect have always been the cornerstones of HP's success and they always will be. The values that Bill Hewlett and Dave Packard established nearly 70 years ago are as relevant today as they've ever been:

• We are passionate about customers;
• We have trust and respect for individuals;
• We perform at a high level of achievement and contribution;
• We act with speed and agility;
• We deliver meaningful innovation;
• We achieve our results through teamwork; and
• We conduct our business with uncompromising integrity.

Our values are the foundation of everything we do. We foster an environment that is open and transparent. We encourage employees to report things that don't seem right and continue to develop world-class tools to help employees ask questions and raise values-based, ethical or compliance concerns.

But unfortunately, no company is immune to an ethical lapse. The events of September 2006 connected with HP's investigation into leaks of confidential information from the Board of Directors tarnished HP's reputation. We have taken significant steps to regain our leadership position in the areas of ethics and privacy.

In December 2006, HP entered into an agreement with the California Attorney General to resolve civil claims arising from the previously disclosed investigation into leaks from our Board of Directors. As part of the agreement, we committed to implement a series of measures designed to ensure that our internal investigations are conducted in accordance with California law and with HP's high ethical standards. We have submitted two reports to the Attorney General outlining the specific actions we have taken in our efforts to regain our position as a global leader in corporate ethics and responsibility. By submitting these reports, we have satisfied our current responsibilities under the settlement.

Report highlights

Retention of Bart M. Schwartz as Qualified Authority

HP asked Mr. Schwartz to do an assessment of current practices and to develop future best practices. Based on his review and HP's own internal assessments, we have implemented a number of changes to our investigative policies, processes and reporting structures. Additionally, HP has committed to implement all of Mr. Schwartz's recommendations including the new Integrated Investigator Procurement program which will cover areas such as investigative consultants' qualifications, accountability, oversight and supervision, performance assessments and training to ensure investigations are conducted lawfully and ethically.

Appointment of Independent Directors

Richard Hackborn was announced in September 2006 as the new lead independent Director. In November 2006, G. Kennedy Thompson became the new independent director to HP's board responsible to review and report to the Board on HP's compliance with legal and ethical requirements related to the conduct of investigations. John Joyce and Joel Hyatt were elected to HP's Board in May 2007.

Established Compliance Council

We have formed a new Compliance Council, chaired by the HP's Chief Ethics and Compliance officer which includes our Chief Privacy Officer and other senior leaders from HP's businesses as well as our legal, internal audit and compliance functions. The Compliance Council oversees the operation of HP's worldwide compliance programs consistent with applicable laws and regulations. Its principal responsibilities are to capture an inventory of compliance areas across the company, conduct a risk assessment to determine highest risk areas, develop training, assess the gaps of processes and practices in those risk areas, and develop action plans to mitigate those risks.

Expanded role of Chief Privacy Officer

HP's Chief Privacy Officer has an expanded role to include review of HP's investigative processes to ensure they appropriately address matters related to privacy, data protection and ethics. The Chief Privacy Officier also chairs the HP Privacy and Data Protection Board, a newly created HP corporate governance body which is specifically responsible for overseeing data protection and related policies, processes regulations and laws.

Our ongoing commitment

We are committed to continuing to evaluate and evolve our Ethics and Compliance programs, processes and policies as needed to ensure we live up to our reputation as a model corporate citizen with the highest ethical standards.