Last Updated Jan 20, 2011 5:29 PM EST
First, a quick refresher on this train wreck of corporate governance:
- Hurd was forced to resign as CEO in early August 2010 for having "demonstrated a profound lack of judgment that seriously undermined his credibility and damaged his effectiveness in leading HP."
- Analysts asked hard questions about questionable strategic choices.
- A PR war between HP and Oracle (ORCL) CEO Larry Ellison broke out.
- HP hired former SAP CEO LÃ©o Apotheker as its new chief executive.
- A group of shareholders sued HP over Hurd's severance.
And now, the board is scurrying to promise an independent investigation of Hurd's departure run by outside lawyers and the two directors new to the board since Hurd's departure: Apotheker and new chairman of the board, Ray Lane.
Pulling together an independent examination isn't unusual, given the circumstances. Still, this is the second such investigation. Only this time it's really about whether the board was in such a rush to avoid further scandal that paid Hurd too much to go away. The board first embarrassed itself by planning on $40 million in severance and then, when people complained that no one fired for cause should reap such a reward, reduced it by a whopping 13 percent to $35 million.
Had this been the first time the board showed bad judgment, it might have been able to calm everyone down. Given that it it effectively installed a revolving door in the CEO's office, though, there's no way the board can brush these criticisms off. The directors have made too many mistakes over too many years.
All the ones who came from the old era should tender their resignations and leave. Maybe a new board can break with old habits and help create a culture of responsibility and ethics from the top. If not, you can expect HP's problems to continue.
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