Another HP board room drama

Following last week's New York Times article on HP's board re-election, three directors stepped down on Friday, including the board chairman. Whitman is not elected to be the next Chairman.

The new board chairman, Ralph Whitworth, said, “All boards should evolve, certainly when they’ve had the recent past this one does. You can expect some evolution of the board over the coming years — months, maybe.” That may indicate more changes at the board level. HP's tradition may mean that there are in-fights on-going.

The new HP board has a fresh look. Long term speaking, the turn-around effort has removed one uncertainty factor and hopefully can focus on execution instead of decision. But it has never been easy for HP. So we will need more confirmation. In a sense, the situation is more risky because of the changes. Also we can assume HP's highest level shuffling will stop high visibility deals in the coming months. Therefore, it is expected a slow recovery. Goldman had down graded HP because the weakness in PC market. The slow recovery may also limit HP's performance in 2013. Note that it has been up about 50%. So Goldman's tone came in as a confidence alarm.