In a shock announcement, HP has announced that chairman, chief executive officer and president Mark Hurd, has stepped down following sexual harassment claims.

According to HP in a statement:

"Hurd’s decision was made following an investigation by outside legal counsel and the General Counsel’s Office, overseen by the Board, of the facts and circumstances surrounding a claim of sexual harassment against Hurd and HP by a former contractor to HP".

Although the investigation found there was no violation of HP’s sexual harassment policy, it did find violations of HP’s Standards of Business Conduct.

"As the investigation progressed, I realized 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", said Hurd in a statement.

The investigation found that Hurd "failed to disclose a close personal relationship he had with the contractor that constituted a conflict of interest, failed to maintain accurate expense reports, and misused company assets", the new acting CEO, Cathie Lesjak, said in an email to all employees.

The Board has appointed CFO Cathie Lesjak, 51, as CEO on an interim basis. Lesjak up until yesterday was HP’s CFO.

Lesjak has taken herself out of consideration as the permanent CEO, but will serve as interim CEO until the selection process is complete.

Candidates from both inside and outside the company will be considered, HP is saying, suggesting that former Palm CEO Jon Rubenstein could be catapulted into the top job just months after HP bought the failing smartphone company.