PALO ALTO (KCBS/AP)—Hewlett-Packard Co. said on Thursday that Chairman Ray Lane is stepping down and two board members will resign next month, two weeks after a near ousting by shareholders at the company’s annual meeting.
Shareholders are upset by a series of mistakes that have damaged the company’s share price, including the $8.8 billion write-down on the $10 billion acquisition of business software maker Autonomy in 2011.
“They’ve let HP slip from being an industry leader to an industry question mark, and the board is supposed to set the over-all strategy and vision and they haven’t done that,” Erik Gordon, professor at the University of Michigan Ross School Of Business, said.
He said that HP needs to refocus on its strengths, like engineering, and not just low-cost computer products.
Lane’s resignation was earlier reported by CNBC and The Wall Street Journal. The Journal quoted Ralph Whitworth, a veteran shareholder activist, who will run the board temporarily. Whitworth told the newspaper that Lane felt he no longer had a mandate from shareholders.
This is the second board shake-up within the last few years and Jeffrey Sonnenfield, professor at the Yale School of Management, said it’s historically out of character for the company.
“For the first 60 years of the 75-year-old company, we had only the founders and then two very good CEOs. Now the last ten or so years, we’ve had six different CEOs and finally they’ve got the right person in there with Meg Whitman,” he said.
Sonnenfeld said that Whitman may have an easier time retooling the company without the share-holder distractions.
Successors for resigning board members John H. Hammergren and G. Kennedy Thompson have not been announced.
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