Hewlett-Packard Board Is `Somewhat Dysfunctional,' Welch Says
Jack Welch, former CEO of General Electric Co.
Craig Ruttle/Bloomberg
Jack Welch, former chief executive officer of General Electric Co.
Jack Welch, former chief executive officer of General Electric Co. Photographer: Craig Ruttle/Bloomberg
Oct. 5 (Bloomberg) -- Former General Electric Co. Chief Executive Officer Jack Welch talks about the Obama administration's relationship with U.S. businesses and trade relations with China. Welch, speaking with Betty Liu on Bloomberg Television’s “In the Loop” at the World Business Forum in New York, also discusses Mark Hurd's resignation at Hewlett-Packard Co. and his new role at Oracle Corp. (Source: Bloomberg)
Hewlett-Packard Co.’s board “appears to be somewhat dysfunctional” in how it handled the departure of Chief Executive Officer Mark Hurd, said Jack Welch, former CEO of General Electric Co.
Hurd resigned Aug. 6 after an investigation found that inaccurate expense reports filed by him or on his behalf concealed a personal relationship with a marketing contractor. The company’s stock has slid about 12 percent since then on concern his successor may not be able to replicate the growth Hurd spurred through such moves as acquisitions and cost cuts.
“There’s another agenda with Mark Hurd and it hasn’t yet come out,” Welch said in an interview with Bloomberg Television’s Betty Liu at the World Business Forum in New York. “It’s clear this was not a performance issue. This was a dynamic between a board, which appears to be somewhat dysfunctional, and Mark Hurd.”
Welch follows Oracle Corp. CEO Larry Ellison in upbraiding HP. Ellison said in an August letter to the New York Times that HP’s board was wrong to let Hurd go. International Business Machines Corp. CEO Sam Palmisano in September faulted HP for using acquisitions, rather than spending on research and development, to pursue innovation.
Hurd is now co-president at Oracle. HP last week appointed SAP AG’s former CEO Leo Apotheker as Hurd’s successor.
“The winner so far in this is Larry Ellison,” Welch said in the interview.
Welch also criticized the board for selecting its third CEO in a row from outside the company, rather than developing and selecting internal candidates.
“This is obviously a board that isn’t thinking about management succession,” he said.
HP spokeswoman Mylene Mangalindan declined to comment.
To contact the reporter on this story: Betty Liu in New York at Dina Bass in Seattle at dbass2@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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