HP Chairman Steps Down Over Mismanaged Acquisition
Over the years HP has suffered and paid the price for mismanagement. Different CEO's and Chairmen of the Board have been made to step down over their decisions. And the trend is continuing with the most recent Chairman of the Board Ray Lane stepping down from his post over the mismanaged acquisition of software company Autonomy.
An internal investigation at HP found that there were financial discrepancies in the financial records of Autonomy, which is a big data analysis firm. The deal was conducted back in 2011 and apparently HP took a non cash accounting charge of US$8.8 billion, over US$5 billion of which was related directly to Autonomy's alleged book cooking.
Besides Ray Lane, two other board members will also be leaving. In the meantime, investor and HP board member since 2011, Ralph Whitworth will be taking over as Chairman. Ralph Whitworth's firm, Relational Investors, owns roughly US$800 million worth of HP’s stock making him personally invested in the success of HP. But the break is not going to be completely clean as Ray Lane will be staying on as a member of the board of directors.
The importance of solid leadership is crucial. Just look at Yahoo. After bungling around they appointed Marissa Mayer at the helm and have started to claw their way back into prominence. HP should definitely be looking to follow suit.