HP Chairman Ray Lane will step down from his spot heading the computer maker’s board of directors, the company said Thursday. Director Ralph Whitworth will take his spot on an interim basis, while Lane remains on the board. The loss of its chairman is just part of what appears to be an overall cleanup of the troubled company’s board of directors, possibly in response to shareholder activists. Just a few weeks ago, the board fended off shareholder attempts to restructure it, but barely.
Some HP board members stuck to their guns in the face of shareholder discontent. Three weeks ago, Rajiv Gupta told Reuters: ”Losing some of our directors in an abrupt and disorderly manner could undermine our efforts to stabilize the company … What the company needs now is stability and consistency of leadership so that the Board and the management team can devote all of their focus and energy towards executing on our strategic plan.”
So much for that. By now, it’s apparent that some of those challenges resonated. Directors John H. Hammergren and G. Kennedy Thompson have decided to leave the board, leaving two slots open for HP to fill. Both directors will continue to serve until the May board meeting, according to the release. Many have blamed HP’s myriad troubles on its inept board, including the CtW Investment Group, an arm of labor federation Change to Win that filed a letter in February asking for Lane to be removed as chairman. The group blamed the retiring directors and Lane for the debacle that is the Autonomy purchase.
Cleaning house might be the first step to getting the company back on track after what has been a tumultuous couple of years since the company deposed Mark Hurd as CEO and Chairman in 2010 after a sexual harassment scandal. Lane’s tenure has been rocky to say the least. He came on as chairman at the same time as former SAP CEO Leo Apotheker was named CEO and presided over the company’s problematic — and extremely expensive — acquisition of Autonomy for more than $13 billion.
That acquisition — which was Apotheker’s baby but got board approval — raised eyebrows even at the time it was announced with many observers calling Autonomy wildly over priced. That assessment turns out to have been true. HP subsequently wrote off more than $8 billion of that purchase and pushed U.S. and U.K authorities to investigate alleged fraud on the part of former Autonomy management. The fact that the purchase passed muster in the first place though focused more eyes on HP’s board.
In a release announcing his move on Thursday Lane 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,” said Lane. “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.”
The one question some shareholders may have is why Lane, who is a partner emeritus at VC firm Kleiner Perkins Caufield & Buyers, remains involved at HP at all.
This post was updated at 11:15 a.m. PST with director comment.