In case Joe Nocera didn’t persuade you that HP’s (HPQ) board was pretty much the worst in corporate America, his replacement as Saturday business columnist, James Stewart, will probably manage to do the job:
Interviews with several current and former directors and people close to them involved in the search that resulted in the hiring of Mr. Apotheker reveal a board that, while composed of many accomplished individuals, as a group was rife with animosities, suspicion, distrust, personal ambitions and jockeying for power that rendered it nearly dysfunctional…
Still grappling with Mr. Hurd’s messy departure (H.P. sued him after he joined the rival Oracle as its president, later dropping the case), the company began a search for his successor. Four directors — Lawrence Babbio, John Hammergren, Marc Andreessen and Mr. Hyatt — volunteered to form the search committee.
Some other directors were immediately distrustful. They suspected that some colleagues hoped to advance their own ambitions, including in at least one case to be the next chairman. Others were so angry over Mr. Hyatt’s support for Mr. Hurd that they declined to participate in any committee he was on.
Now, Hurd’s successor, Léo Apotheker, is out, and HP has a new executive chairman as well as a new CEO. And how did the HP board choose Apotheker’s successors? Easy! Both of them — Ray Lane and Meg Whitman — were on the board already. Rather than appoint the best-qualified person for the job, two of HP’s board members managed to snaffle the prime positions for themselves.
Every once in a while, it can make sense for a board member to step in as the new CEO. But not in this case, when HP’s board is being used as a case study in what not to do in boardrooms around the country and the world. HP’s board has failed miserably in its job of governing HP effectively, and no member of that board should be rewarded for that failure by being given the job of running the company on a day-to-day basis.
The HP press release quotes board member Ray Lane, the new executive chairman, talking about Meg Whitman in the most content-free terms imaginable:
“We are fortunate to have someone of Meg Whitman’s caliber and experience step up to lead HP,” said Lane. “We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead… The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company’s strategy. Meg Whitman has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance.”
HP is, I think, beyond redemption at this point. No wonder shareholders have been dumping their stock: the only thing worse than the company’s management has been the performance of the shareholders’ own representatives on the board. It’s a sad and ignominious end for a company which was once the very soul of Silicon Valley. The best that shareholders can hope for, at this point, is that Whitman sells HP to someone who knows how to run a company with passion and integrity. Maybe Walter Hewlett can get a group together.