Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Is This the HP Board That Will Allow Us to Stop Thinking About HP’s Board?

On any other day, so significant a shake-up on the board of directors of a Silicon Valley company as eminent as Hewlett-Packard would easily have been the lead story. That it took a management shift at the top of Google to overshadow it seems somehow appropriate.

The various boardroom dramas that have roiled HP’s directors during the last decade have often overshadowed HP itself. Last August’s blowup involving the departure of CEO Mark Hurd following accusations of sexual harassment occurred against the backdrop of lingering memories of the 2006 scandal involving the use of illegal methods to spy on journalists that ended the tenures of three HP directors.

Before that there was a public fight against HP’s 2002 acquisition of Compaq, led by dissident director Walter Hewlett, who eventually lost his seat. The Compaq deal ultimately cost Carly Fiorina her job at HP after a boardroom confrontation in 2005.

The result of all this is that boardroom drama has become something of an HP specialty, along with printers, computers and IT services. Criticizing the board’s actions has become something of a sport, with Oracle CEO Larry Ellison serving as the most public practitioner.

Shareholders appeared to agree that a change was overdue. HP shares shot up right away as word of a shake-up began to leak right before markets closed yesterday. HP shares closed up one percent today, trading at levels not seen since before Hurd’s abrupt departure in August.

The four departing directors were deeply involved in the Hurd kerfuffle. Two were Hurd defenders, and the other two wanted him out. All four volunteered. Chairman Ray Lane, in an interview with The Wall Street Journal, said the debate over Hurd’s status “took a lot out of this board.”

It’s highly unusual for a company to change its board so deeply and so suddenly. The five new additions became directors effective today without any input from shareholders, and will serve until a vote can be held to approve them for a full one-year term at the next shareholder meeting in March.

Shareholders in theory have the power to offer their own slate of directors, but there’s little time for that, and even if some group were to do so, its only option would be to do so at its own expense. SEC rules governing the access to the proxy nominating process are currently being challenged in court by the U.S. Chamber of Commerce and Business Roundtable, and so the rules that would allow shareholders to more easily submit their own list of names are on hold pending the outcome.

Absent a proxy challenge, HP shareholders will be put in the position of accepting a board on which seven of 13 directors are brand-new. That’s a lot of new blood and may turn out to be the kind of change HP’s board needs. And getting the change done all at once rather than gradually may prove the better option.

However, I can’t help but wonder: In seeking to close out a period in which HP’s board became known more for its drama than anything else, is more drama the right answer?


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work