Interim Chairman Whitworth “Believes in HP’s Turnaround”
Hewlett-Packard’s new interim chairman, Ralph Whitworth, just issued a statement saying he believes in the company’s turnaround strategy.
Whitworth, the head of Relational Investors LLC, has more skin in the game from a financial perspective than any other HP director. He owns about 17 million HP shares, worth about $800 million.
Whitworth says the company’s board will be recruiting a new chairman and at least two other directors to replace G. Kennedy Thompson and John Hammergren, both of whom resigned today. Ray Lane relinquished HP’s chairmanship, but will remain on the board.
The shake-up follows a closely watched proxy vote last month in which Lane, Hammergren and Thompson were targeted by unhappy shareholders. All three received only a thin majority of votes in favor of their retaining their seats.
Here’s Whitworth’s memo:
Why I Believe in HP’s Turnaround
HP today announced important changes to its board of directors. Ray Lane has decided to step down as chairman, and he will continue to serve as a director. John Hammergren and Ken Thompson have decided to leave the board, and both directors will continue to serve until the May board meeting. Lastly, I will be serving as chairman of the board, on an interim basis, while a search is conducted for a new chairman.
Each one of our directors considered the results of our recent shareholder meeting and made the personal decision to do what they felt was best for HP. As I have said many times, this board is among the best with which I’ve worked. Today’s announcement is a testament to our chairman’s and departing board members’ statesmanship and sterling professional standards. They, like all of us, are passionate about moving beyond the challenges of the past few years so we can focus solely on supporting the HP team as Meg leads us through this Herculean turnaround.
In the coming months you will see further evolution of our board of directors. We will recruit a world-class chairman to take my place as soon a possible, and we also hope to recruit at least two other outstanding directors before the end of this year. While sooner is better, rest assured we will not allow the rush of time to compromise our focus on recruiting the best of the best.
The firm that I represent, Relational Investors, owns roughly $800 million worth of HP’s stock. So, I can assure you that my interests are completely aligned with those of our shareholders. Besides its enviable industry position and unbelievable products and product pipeline, let me tell you why I believe in this company. It comes down to two things—people and leadership.
I have had an opportunity to spend a fair amount of time with people across HP, including speaking with the top 1,100 leaders at their recent leadership meeting. I walk away from every interaction more confident about this company’s future. There is a palpable energy and excitement at every level of the company to get our business turned around. I’ve worked on many, and led a few, similar efforts in my 28-year career, and I can tell you this: one does not find the telltale “green shoots” in financial metrics, graphs and charts, but rather in the eyes, faces, words and actions of people. All turnarounds start and end with people, and I see green shoots every where I turn at HP—it is happening as we speak, and I guarantee you it will be the most satisfying thing in each of our careers to be here, deeply involved, as it unfolds.
Leadership is what turns a group of great people with great energy and ideas into a team. Some say it’s a gift, and some say it’s a skill, but I think it’s both, and hands down Meg Whitman is among the most gifted and skilled business leaders in the world today. Her enthusiasm and energy is contagious and she has brought us all together as a team to tackle one of the greatest business challenges in the history of industry. I have dealt with a lot of CEOs in my career. That’s what I do in my “day job,” but I can say I have not had the opportunity or privilege to work with one as gifted and skilled as Meg Whitman. Her track record is the proof, and she is building on it here at HP, where working out of her cubical in Palo Alto she has assembled a world-class leadership team. It’s clear to me that they are committed to hard work, unyielding business ethics, knowing the details and shaping the strategy. That said, their ability to inspire the HP team to rally behind a shared vision has, more than anything else, made me a believer.
So, on behalf of the board, let me thank our team members for all of their work to date and say that we are 100 percent committed to supporting Meg and their efforts to turn around HP and restore it to its rightful place at the pinnacle of global business.