As I work on this column, Patricia Dunn, former non-executive chairman of Hewlett-Packard’s board, is preparing to testify before Congress about recent revelations that HP was spying on its own board members. As the lead director of a public corporate board, I’ve watched the situation deteriorate and important lessons surface. These lessons have applications for all businesspeople.

The key facts: Early in September, HP admitted it spied on its own board members, staff, several reporters and their families in an effort to get to the bottom of boardroom press leaks. By admission, this took the form of “pretexting,” where people were paid to call the phone company and pretend they were someone else to obtain that person’s phone records; installing spyware on a reporter’s computer; and having board members followed. Their probe revealed allegations that board member George Keyworth was the source of the leak.

The Justice Department is currently investigating HP, and by the time this column appears, Dunn and other key players will have testified before Congress about their actions.

These are my key takeaways:

Observe the spirit and the letter of the law. If it doesn’t pass the smell test, don’t do it. “Pretexting” is a synonym for gaining access to private financial information. Legal or not, it’s a questionable activity. If you hear yourself parsing the fine details of what’s “technically” right or wrong, stop. Trust your gut.

You have one leader at a time. Whether HP board members liked it or not, Dunn was their leader. If they had problems with the strategy or the leadership balance, there were internal processes to pursue. Making a public display of the issue destabilized the board and brought into question the company’s entire culture. If you’re in a leadership position within an organization and you don’t believe in the direction your leader has chosen, use the processes in place to give frank, constructive input. If you can’t go along with the final decision, leave. Staying to make trouble for the leader publicly hurts the organization and your career.

Strong, independent perspective is critical. Leaders need good external advice, whether it’s legal advice or an external consultant. Sometimes you need people who will tell you what you don’t want to hear. HP’s general counsel, who oversaw the pretexting, is married to an employee of Wilson Sonsini Goodrich & Rosati, HP’s external counsel. This relationship may have jeopardized the independence of their external counsel. If you’re paying for an independent perspective, make sure you have it.

Read the map. The leaks themselves were early warning signs of board dysfunction, but it seems that instead of looking for the root problem, leaders attempted to clamp down on the behavior. Maybe Keyworth didn’t feel heard and respected. Maybe he was concerned about the strategy. Maybe the chair didn’t have the confidence of board members. It could have been many things, but I’m almost certain it wasn’t that he wanted to deliberately sabotage HP. Heed the warning signs and peel back the onion to see what the real issue is. Better yet, keep things from reaching this point by building a culture of communication and trust.

The truth will set you free. When things start to go wrong – and it happens to everyone at some point – intensely review the situation, take corrective action and make full disclosure yourself. You can control the message, when it’s heard and how. This has the added bonus of being the right thing to do.

Several things indicated that HP leadership circled the wagons. In particular, when one board member quit over the issue, HP indicated on the required forms that he left for personal reasons instead of a major disagreement. The act of covering up is like fuel on a fire starting to get out of control. At the very least, honest selfevaluation and full disclosure will contain the fire if not put it out altogether.

On some level, the HP case challenges us all and maybe frightens us a little. Leadership comes with power and these events remind us we’re still vulnerable to events that spin out of control. The only defense is to follow our examination of HP’s missteps with a fearless examination of our own performance. Instead of wringing our hands and shaking our heads watching this unfortunate saga unfold, we need to learn from it.

©2006 All rights reserved. Stuart R. Levine is Chairman and CEO of Stuart Levine & Associates LLC, an international consulting and leadership development company, and author of “The Six Fundamentals of Success: The Rules for Getting it Right for Yourself and Your Organization.” For consulting and speaking engagement information, please call 516-465-0800.  HP’s lessons have applications for all businesspeople.