Corporate Wrongdoing and Board Leadership Structure: The Stories of WestJet and Hewlett-Packard

Based on underpinnings from the extant literature on negotiated order theory and board leadership structure, we propose a model to explain the relationship between board leadership structure, corporate wrongdoing (Internet snooping and pretesting/social engineering), and company performance. In order to illustrate our proposed model, we develop two mini cases on WestJet in Canada and Hewlett Packard in the United States, where serious corporate wrongdoings had taken place at the behest of the board leaders. The comparison of the cases suggests that both CEO duality and CEO/Chair split can contribute equally to corporate wrongdoing. Consistent with the theoretical model, the comparison also illustrates that corporations are able to withstand the adverse effects of wrongdoings and regain investor confidence and profitability through the symbolic and substantive reversal of their leadership structures following a scandal. The study’s implications are given.