HP is getting itself into more bother. Today its board of directors have once again come under scrutiny from a shareholder advisory group.
The Institutional Shareholder Services (ISS) group has a problem with HP’s new-ish chief exec, Leo Apotheker. Members claim he was too cosy when it came to remaking the company’s board. They say that Mr Apotheker was too involved when it came to naming five new members of the board back in January and he should have stayed well clear.
Of course HP isn’t having any of it, claiming that the group got confused as to what happened when the company selected its directors. Right.
The reason why HP had to elect five new members in the first place is because four outspoken members were blamed for having a hand in the “banishment” of then chief executive Mark “I Did Not Sleep With That Woman” Hurd. It is claimed they forced him to resign in August after his relationship with a female contractor came to light.
In a report issued by the group last week, it’s said that the nominating and governance committee’s charter makes sure it is responsible for identifying new board members and that each member has to be independent.
However, because Apotheker was directly involved, the group now feels that the process was unfair. “A CEO’s participation in the appointment of directors, especially if the director has a significant relationship with the CEO, can make it difficult for such directors to be objective,” it said in the report obtained by the WSJ.
HP again had something to say about that. It told the ISS the candidates identified by the panel were vetted by HP’s nominating and governance committee.
But of course the group wasn’t happy, saying in its report that the new CEO was involved from the get go which made it utterly unfair. It wants HP to withhold votes for three members of the board’s nominating and governance committee, which were due to take place at the company’s annual shareholder meeting later this month.