Board:The stock has fallen 50%, lets fire the CEO!

September 22, 2011

I’m not sure what is the bigger news today, Facebook’s new makeover or the sacking of HP’s CEO 11 months into the job.

As it relates to HP’s CEO though, the articles from people close to the matter are quite revealing. From early Wednesday, the news was brewing that they were considering replacing the CEO. Early Thursday more tweets confirmed that later that day they would be replacing the CEO, and they did.


Board Fighting and Too Many Changes at Once

Reading more in to the matter though, it has become very clear that there have been in-fighting at the highest level and corporate governance failures by the board of HP; from day 1. Additionally, the changes recently announced to spin off the computing division and purchase software maker Autonomy were probably too much at one time for investors to handle, as highlighted in this Financial times article, HP should have avoided a big bang.

Read the following articles about the situation.

  1. Whitman replaces Apotheker at HP (very interesting qoute included about the board’s decision to fire him, while agreeing to some of these decisions in the first place)
  2. A failure of duty by Hewlett-Packard’s board – The appointment of Meg Whitman today to replace Léo Apotheker at Hewlett-Packard is a resounding blow to Mr Apotheker. But it also reflects very badly on the hapless HP board.
  3. Voting to Hire a Chief Without Meeting Him **must read**  – This article highlights some clear corporate governance issues. Among their revelations: when the search committee of four directors narrowed the candidates to three finalists, no one else on the board was willing to interview them. And when the committee finally chose Mr. Apotheker and again suggested that other directors meet him, no one did. Remarkably, when the 12-member board voted to name Mr. Apotheker as the successor to the recently ousted chief executive, Mark Hurd, most board members had never met Mr. Apotheker.

 

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