Is HP's board the worst ever?

@CNNMoneyTech September 22, 2011: 5:31 PM ET

NEW YORK (CNNMoney) -- The process of firing a CEO is always full of drama -- just ask Yahoo. But Hewlett-Packard's board has taken it to a new level.

It's all but certain that members of HP's (HPQ, Fortune 500) own board leaked the big news -- that they were planning to oust CEO Léo Apotheker -- to media outlets including Fortune on Wednesday.

The leak hit before HP finally made an official announcement on Thursday, saying it had replaced Apotheker with former eBay (EBAY, Fortune 500) head Meg Whitman. The surreal spectacle raised the bar for boardroom dysfunction.

"These guys are a bunch of clowns, surpassed in incompetence only by Yahoo's board," Eric Jackson, managing member of Ironfire Capital, wrote in a Wednesday in a screed titled "HP's Board of Directors Is Pathetic."

Corporate governance specialist Richard Davis, partner at leadership consultancy firm RHR International, didn't disagree with that view.

"Just look at what's been going on the past several years at HP -- clearly, something is going on with this board," Davis said.

Apotheker's messy firing is a mirror of his messy hiring. HP came under fire last September for the surprising choice: Apotheker was ousted less than a year into his CEO gig at software giant SAP (SAP), which is struggling to hold its market share against onslaughts from Oracle (ORCL, Fortune 500) and IBM (IBM, Fortune 500). Apotheker had no experience in hardware, the business that drives most of HP's revenue.

A New York Times article posted Wednesday revealed that most HP board members didn't even meet Apotheker before hiring him.

"Apotheker is the worst CEO hire in the last decade," Jackson proclaimed.

HP's 13-member board then allowed its new CEO to reshape the group charged with overseeing him. Apotheker played a direct role in choosing five new HP board members earlier this year -- four of them with business connections to him.

Dominique Senequier is the head of AXA Private Equity, and Apotheker previously sat on the AXA supervisory board. Three others -- Whitman, former Alcatel-Lucent CEO Patricia Russo and former General Electric CIO Gary Reiner -- did business with SAP while Apotheker was its CEO.

Institutional Shareholder Service, a corporate governance research firm, slammed HP board directors Lawrence Babbio, Sari Baldauf and Ken Thompson for letting Apotheker have a voice in the selections.

Davis, the RHR International partner, said HP's board is suffering from "a lack of identity for the company and lost confidence in the leadership."

That confusion is trickling down to the rest of the company -- and it needs to stop soon.

"It's time for the board directors to grow up, form a strategy and secure the kind of leadership you need for that strategy," he said. "There was a lot of holding Apotheker accountable for HP's troubles, which is fine. But the board is who has the keys. Who's holding them accountable?" To top of page

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