Hewlett-Packard Chairman Ray Lane is giving up his post as the company initiates yet another board shake-up. Lane's tenure featured a few massive debacles.
Ralph Whitworth, a shareholder activist, will be a stand-in until a replacement is named. Lane will stay on HP's board, but John Hammergren and G. Kennedy Thompson will step down.
The moves, initially reported by The Wall Street Journal, CNBC and others, represent another shakeup for HP's historically dysfunctional board. But CEO Meg Whitman and the company had to do something following a series of missteps.
- First, there was the HP acquisition of Autonomy. HP bought Autonomy in 2011 for a whopping $11 billion and drained its balance sheet.
- Then HP wrote down $8.8 billion in goodwill for the deal.
- And finally, HP claimed it bought Autonomy based on shady accounting.
Where was the due diligence on Autonomy? While the answers are still fuzzy, the solution is clear. The board had to have some turnover. It's also worth noting that Hammergren and Thompson barely kept their board seats.
In a statement Lane (right) said:
After reflecting on the stockholder vote last month, I've decided to step down as executive chairman to reduce any distraction from HP's ongoing turnaround. Since I joined HP's board a little over two years ago, I've been committed to board evolution to ensure our turnaround and future success. I'm proud of the board we've built and the progress we've made to date in restoring the company. I will continue to serve HP as a director and help finish the job.
Lane managed to distance himself from former CEO Leo Apotheker, who was also on the Autonomy bandwagon. Lane joined HP at the same time Apotheker was hired. The duo, which was far from dynamic, was supposed to push HP into the software business with gusto.
In another board move, HP said that the role of lead independent director, held by Rajiv L. Gupta, will be eliminated. Gupta will remain on the board and will replace Thompson as chairman of the audit committee. Gary Reiner will replace Gupta as chairman of the nominating and governance committee. Whitworth will become chairman of the finance and investment committee.