It also revealed that there were numerous instances where the contractor was paid or reimbursed without performing work. There were also inaccurate expense reports from Hurd meant to hide his personal relationship with the contractor, Holston said. That evidence pointed to "a profound lack of judgment" by Hurd, he said.

"Based on all of this, the board concluded and Mark agreed that it was impossible for him to be an effective leader and he has stepped down," he said.

HP would not reveal the amount of money improperly expensed by Hurd and the contractor but implied it wasn't significant. "Let's be clear, the amount of expenses we're talking about are not material to HP," Holston said. "It wasn't the dollar amount that drove the board decision. The fact that drove the decision for the company had to do with integrity, it had to do with credibility and it had to do with honesty."

Company leaders are satisfied that the investigation showed that the pattern of improper expense reports did not extend beyond Hurd and the contractor, he said.