IN AN ambiguous gesture, Hewlett-Packard’s embattled chairwoman Patricia Dunn will relinquish her seat as chair in January but will stay on the board as a director.
And in a step backwards for the company’s corporate governance practices, CEO Mark Hurd will become both Chairman and CEO, a practice widely considered to place too much power in the hands of a single individual.
The mainstream media immediately played the story as Dunn stepping down, although the reality is much less clear-cut.
The half-hearted measures come as the investigation into how HP handled a probe into board-level leaks attracted widening interest from government and law enforcement agencies.
On Monday, the FBI, the U.S. Attorney for Northern California and the House Energy and Commerce Committee joined the California attorney general and Securities and Exchange Commission in probing how HP obtained private phone records of board members and at least nine prominent business journalists.
Dunn, 52, will resign as chairman of the board on Jan. 18, 2007, but will remain as a director. CEO Hurd will take over her responsibilities and Richard Hackborn, who has been on HP’s board for 14 years, will be designated as lead independent director.
In a statement, Dunn defended the need for the probe calling it “an important investigation that was required.”
In her statement, Dunn also sought to shift responsibility for the investigation. She made a point of saying the probe was “conducted with third parties.”
Here is the AP story on the Washington Post website.
Update: In a second release today, HP announced that director George Keyworth, who was identified as the source for a January 2006 media article which prompted the company’s notorious probe, has resigned from the board immediately.
Amazingingly, the release says Keyworth said nothing wrong in his interview with the CNET reporters, but should have gone through HP’s PR department, which in the past had often asked him to do interviews with the media.
“At HP’s request, Dr. Keyworth often had contacts with the press to explain HP’s interests. The board does not believe that Dr. Keyworth’s contact with CNET in January 2006 was vetted through appropriate channels, but also recognizes that his discussion with the CNET reporter was undertaken in an attempt to further HP’s interests.”
Let’s get this straight, the one person who was furthering HP’s interests, according to the company’s own statements, is gone. So who’s left?
If you’re looking for ongoing coverage of the saga from a legal perspective, Alex Simpson at the Corporate Law & Securities Blog has it.
Dominic (bio & disclosures) is IR Web Report‘s founder and an online investor relations consultant. He advises leading public companies and investor relations service providers worldwide on using the web for disclosure, engagement and profile building. You can contact him via the contacts page.
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