Not that we should get ahead of ourselves, but two significant announcements from HP on Thursday show the faint glimmer of a rainbow at the end of a very long corporate storm.
One was the designation of Rajiv Gupta as lead independent director. The appointment fulfilled a promise made two months ago when Meg Whitman was appointed CEO and Ray Lane became executive chair of the board. Gupta has been on HP's (HPQ) board since 2009.
Why did the board pick Gupta? For one, he was not among the four new board members chosen in January, a process that was led by Ray Lane. Nor was he one of the three HP board members that ISS recommended against this proxy season. In that way, Gupta may have been a safer choice for this role than some of the other members of the board. Lane did, however, determine who would stay on the HP board earlier this year and thus did re-select Gupta for the board.
It will be interesting to see how active a role Gupta assumes as lead independent director and the scope of his job description. HP did not offer much of a description in their announcement of his appointment. Gupta has been serving on HP's compensation committee and shareholders voted against HP's compensation practices this year.
HP also announced yesterday that it had entered into a letter of agreement for activist investor Ralph Whitworth of Relational Investors to join the company's board. The move will increase the board's total membership to 14, but the increase may be temporary. Buried in the company's 10-Q filing was a notice that, "On September 8, 2011, Dominique Senequier notified the Board … that due to her other professional commitments … she will not stand for re-election at HP's next annual meeting of stockholders." Senequier had just been appointed to the board in January and elected by shareholders for the first time in March.
The agreement HP has struck with Whitworth, who is well-known and respected by active shareholders, represents a bold defense by the company against shareholder concerns.
