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High Noon at Hewlett-Packard

Essay by   •  January 17, 2011  •  Term Paper  •  734 Words (3 Pages)  •  3,105 Views

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High Noon at Hewlett-Packard

1. The Hewlett-Packard board of directors failed to fulfill its duties to the company's share owners. Through all the fighting and bickering, the board of directors disagreed with one another on various topics and violated their duties by acting in self-interested ways. Hp's CEO Fiorina had little respect for HP's board of directors and their opinions, creating a divided and hostile environment. This caused Perkins, Keyworth, and Hackborn to function as a "board within a board", violating their duty to include all members to discuss issues and potential problems that could affect the company. As earnings fell, the board of directors also failed to evaluate Fiorina's performance, who resisted entering into the management process. Another part of their duty is to give advice and counsel management towards corporation's goals and strategy. After the acquisition with Compaq however, the board failed to oversee HP's performance to make sure that the merger was meeting expectations. Because of this, HP lost market shares and managers to competitors. Also, during large resignations after firing Fiorina, the board voted to double its compensation even though the company's performance was doing poorly. As directors, they were to exercise oversight of ethics and compliance programs, but a major issue they faced was trust. Many leaks to the media showed a breach of confidentiality, making it harder for directors to openly discuss HP's strategy and compromising decisions. I believe that the company's poor performance was due to a struggle for power within the board instead of their duty to oversee HP's strategy and business planning process.

2. There were many perspectives on the role of the board. Fiorina had a strong view about the board's role in corporate governance and wanted a more centralized way of decision-making. However, everything had to go through her first which caused annoyance and division among board directors. Perkins, Keyworth, and Hackborn were part of the technology committee and believed that the role of the board was to act as a "guidance board" where directors take an active role in the company by becoming more involved in the management process. Chairwomen Patricia Dunn however, believed that the board's role was to focus on governance procedures, especially after the Enron ordeal and to stop leaks to the media.

4. I believe that the leak investigations overseen by Patricia Dunn were useful and important because there was distrust between board members and the investigation was needed to stop confidential material from being published in the media. However, the way that the investigations were done through "pretexting" was unethical because the investigators lied to the phone companies to get phone records. Whether or not Dunn knew if pretexting was illegal

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