HP Update: Intel's Grove on two-title Hurd
By Tom Foremski for Silicon Valley Watcher
I was wondering how long it would be before Andy Grove, employee #3 at Intel (an SVW sponsor) would speak on the topic of Mark Hurd's consolidation of power at Hewlett-Packard. Intel, through the efforts of Mr Grove, has worked very hard to become an example of good corporate governance.
NEW YORK (AP) -- Andy Grove, management guru and former head of Intel Corp., said Tuesday that he is dismayed by the recent combination of the chairman and CEO positions at Hewlett-Packard Co.
"Every time I see that a company that has departed from the ... combined chairman-chief executive role go back" to combining the roles, Grove said, "I'm sorry to see that."
. . . HP had split the roles of chairwoman and chief executive in February 2005, when Carly Fiorina was ousted by the board.
. . . Grove was in New York to speak at the Grove School of Engineering at the City College of New York. The school was named after Grove, following his $26 million donation to the school last year, the largest ever to the school.
. . . Grove, 70, retired as chairman of Intel last year, but retains the title of senior adviser.
Here is John Gapper from FT.com on this subject:
Combining the jobs of chairman and chief executive is still the American way: only 7 per cent of S&P 500 companies split the roles, according to Institutional Shareholder Services. Even when the jobs are split – as has occurred at Ford between Bill Ford and Alan Mulally – it is often done dysfunctionally. A chief executive ascends to the chairmanship, but still insists on keeping at least one hand on the strategy tiller.
The implication of one person holding both jobs, or of two vying for executive control, is that the role of chairman of the board is insufficient in itself to keep an alpha male (or female) fully occupied. Founders of technology companies, such as Bill Gates of Microsoft or Michael Dell, often become chairmen but carry on opining on strategy. In Mr Gates' case, he took the additional title of chief software architect.
That kind of thing is dying out on the other side of the Atlantic. Most British companies split the roles of chief executive and non-executive chairman.
Here is a view from the inside: Tom Hayes from TomBomb.com:
I was among the dozen or so executives in the room who welcomed Mark Hurd to HP the day he got his badge and met the media beast. My colleagues there were (and are) good people, talented people, dedicated people.
But in the days and weeks following Carly Fiorina’s ousting, a siege mentality had set in. The paranoia was palpable.
In a large company (150,000 employees) with HP’s peculiar culture (everyone is permitted a vocal opinion on everything) leaks are inevitable. Closing down the leaks was more than the work of control freaks, it was seen as a corporate duty under the restrictions on “selective disclosure” set by Congress.
Leaks equal a sloppy company. Leaks hurt shareholders. Therefore, leaks must be plugged. At HP as elsewhere under Regulation FD, closing the holes became a moral pursuit. And a Fool’s Errand.
In the Age of Information Ubiquity, expecting total information control is addled thinking. With blogs, vlogs, message boards, and a plethora of email choices, all companies are sieves. . .
Some latest links on HP:
HP Execs to Testify Before House Panel - AP (8:56 pm)
at Forbes.com (Tue 2:20pm)