(WEB HOST INDUSTRY REVIEW) — HP (www.hp.com) has been forced into a difficult position, following the resignation of chairman, CEO and president Mark Hurd.
In a conference call held Friday, HP announced that Hurd decided with the board of directors to resign his positions immediately.
His resignation was ultimately decided following an investigation into a sexual harrassment claim against Hurd by Jodie Fisher, a former reality television contestant turned HP marketing consultant.
And while the investigation determined there was no violation of HP’s sexual harassment policy, Hurd was found to have violated HP’s Standards of Business Conduct.
One of these violations included Hurd falsifying expense reports and breaking the trust of the board by attempting to keep his relationship with Fisher from them.
Hurd had approved paying Fisher $1,000 to $10,000 for introducing him to customers at the company’s CEO summit meetings, and the two would usually dine together afterward.
In the meantime, HP’s board has appointed CFO Cathie Lesjak as CEO on an interim basis, a position where she will oversee all company financial matters as well as retain her CFO responsibilities during the interim period. Despite this, she has taken herself out of consideration as the permanent CEO.
A board of directors have formed a search committee, consisting of Marc L. Andreessen, Lawrence T. Babbio, Jr., John H. Hammergren, and Joel Z. Hyatt, to oversee the process for finding a new CEO and board chair.
HP will consider candidates from both inside and outside the company, with the selection of a new chairman to occur in conjunction with the CEO decision.
The company says it does not expect to make any additional structural changes or executive leadership changes in the near future.
Additionally, Andreessen did not rule out the possibility of whether the CEO position will be split into two different roles.
“The board deliberated extensively on this matter,” says independent director Robert Ryan. “It recognizes the considerable value that Mark has contributed to HP over the past five years in establishing us as a leader in the industry. He has worked tirelessly to improve the value of HP, and we greatly appreciate his efforts. He is leaving this company in the hands of a very talented team of executives. This departure was not related in any way to the company’s operational performance or financial condition, both of which remain strong. The board recognizes that this change in leadership is unexpected news for everyone associated with HP, but we have strong leaders driving our businesses, and strong teams of employees driving performance.”
HP’s share price dropped 7.6 percent on Friday after the company announced Hurd’s departure.
Hurd’s leadership was pivotal in the company’s turn-around, helping the company trim costs, maintain order among HP’s top executives, and ultimately thrust the company into the top seller of technology over rival IBM.
The future CEO of HP will have to maintain fiscal discipline while also coming up with new ways to stimulate new growth for the company.
The new CEO will also have to decide whether to continue with Hurd’s strategy of cutting costs and acquiring companies in new areas to become a one-stop technology shop.
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