HP – the case for break up. Part II

HP – the case for break up. Part II

All change at HP. Former HP director Thomas Perkin has spoken out describing that the HP executive as “the worst board in the history of business”. He cited the fact that in spite of the Mark Hurd debacle “when the committee finally chose Mr Apotheker, and again suggested that other directors meet him, none did… when the twelve member board voted to name Mr Apotheker as the successor … most board members had never met Mr Apotheker”.

How many of the current board met Meg Whitman before the hasty announcement of her succession to CEO status? Is history repeating itself?

“We are fortunate to have someone of Meg Whitman’s caliber (calibre) and experience step up to lead HP,” said Ray Lane the newly elevated executive chairman of the board of directors. “We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead”. Let’s get real here, the list of prospective candidates was not a long one.

Board members have fiduciary responsibilities. Board members have a duty of loyalty to the decisions they approved too. This board approved Leo’s strategic redirections – disposal of the personal computer business, the additional move into software with the purchase of Autonomy, etc. To then unceremoniously dump the CEO when the market reaction stacked up against them, speaks more to the quality of the board than the leadership. If Whitman truly has the qualities that the HP executive expects, she must immediately sweep the board clean and appoint new blood that expects to be judged by their decisions and loyalty.

Breaking up HP into a successful product company and setting free the misunderstood and under-invested services arm has to be hugely beneficial for the investors, staff and customers alike. The choice of new board members should reflect the future direction of the company /companies.

Whitman’s first hundred days will be interesting, or investors need to seriously consider their position.

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