© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: January 21, 2011 1:55 am
Hewlett-Packard added five new directors to its board, giving majority control of the world’s top-selling technology company to people who weren’t involved in the controversial August ousting of chief executive Mark Hurd.
Four serving directors will stand down, while new chief executive Léo Apotheker and chairman Ray Lane, who both joined in late September, will be among the eight who remain, the company said on Thursday.
The shake-up gives HP distance from the continuing fallout from the departure of Mr Hurd, a hard-driving executive whose resignation knocked $10bn off the company’s market value.
“It’s very unusual” said Steve Mader, a director at recruiters Korn/Ferry International. “One of the obvious possibilities is that the decisions around Hurd and some of the subsequent actions were a schism or a factioning on the board”.
Some shareholders felt strongly that Mr Hurd should not have been forced to leave at all, while others have sued and accused the previous board of wasting corporate assets in granting him severance that could have been worth as much as $40m.
In a filing in that suit late last week, HP said new directors would re-examine Mr Hurd’s exit and pay-out. That group would presumably include Mr Lane, a venture capitalist who has made some of the most pointed public remarks about Mr Hurd, including a claim he repeatedly lied to the old board.
The controversy stemmed from a sex harassment complaint by an actress that HP had hired on contract to host marketing gatherings where Mr Hurd met executives of large customers. The actress, Jodie Fisher, said that her contract had not been renewed because she wouldn’t have sex with Mr Hurd.
While the initial HP investigation did not substantiate Ms Fisher’s claim, it did turn up other problems.
Company representatives said that while there was no romance, Mr Hurd knew Ms Fisher better than HP had been led to believe.
“It had to do with integrity, had to do with credibility, had to do with honesty,” HP general counsel Mike Holston said soon after the departure.
Representatives of Mr Hurd have said the board overreacted to Ms Fisher’s claim.
HP said the board turnover, while unusually extensive, was a natural result of its examination of board expertise after the addition of a new chief executive and chairman.
Each new director “is a widely respected and deeply experienced business leader and together they will provide our board and management team with new insight and perspectives relating to HP’s business and the rapidly changing technology industry”, Mr Lane said in a prepared statement.
The fresh directors include former Ebay chief executive Meg Whitman, who recently lost a bid to be governor of California; Shumeet Banerji, chief executive officer of consulting firm Booz & Company; Dominique Senequier, chief executive of AXA Private Equity; and Patricia Russo, the former chief executive officer of Alcatel-Lucent.
Those stepping down are Joel Hyatt, John Joyce, Bob Ryan and Lucille Salhany.
Under Mr Apotheker, a former head of business software provider SAP, HP is expected to emphasise software more and continue to move away from dependency on the commodity PC and printer businesses.
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.