A high-powered cast of characters is behind the corporate drama unfolding in September 2006 at Hewlett-Packard following a controversial and potentially illegal investigation into its own board of directors.
Patricia Dunn became a member of HP's board of directors in 1998 and was named nonexecutive chairman of the board in February 2005. She resigned the chairman's post and departed the board on Sept. 22, 2006. (Earlier in September, HP had said she would step down as chairman in January 2007, but remain on the the board.) She has been replaced as chairman by CEO Mark Hurd.
After an article written by CNET News.com about a strategy meeting of HP's top leadership, Dunn launched a controversial investigation into the company's own board members to uncover the source of the media leak. A filing with the U.S. Securities and Exchange Commission showed HP had hired an outside private investigation firm, which subsequently obtained phone records of calls made between HP directors and individuals outside of HP.
Dunn serves on several boards, including a role as nonexecutive vice chairman of Barclays Global Investors (for which she previously served as global CEO) and as a member of the advisory board of the University of California at Berkeley Haas Graduate School of Business. She ranked No. 17 among Forbes' list of most powerful women in 2005.
Tom Perkins resigned from HP's board of directors at a board meeting in May, after hearing that Dunn had ordered an internal investigation of the company's board members. Dunn had approved the investigation in January, but when Perkins found out about her plans, he advised her to simply ask the board members who had leaked information to the media. But Dunn continued with the investigation and announced results of the probe at the May 18 board meeting. Perkins resigned in protest at that time and has since pushed HP to disclose the nature of the investigation. (Click here to see a PDF of letters and e-mail to and from Perkins, including his charge that his "personal phone records were 'hacked.'")
Perkins was an early employee at HP, once serving as director of HP Labs. He also co-founded seminal Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers in 1972. The company funded such tech industry giants as Sun Microsystems, Google and Amazon.com. Perkins has served as director for a number of technology companies, including Applied Materials, Genentech, Philips Electronics, Symantec and News Corp.
George Keyworth began serving on HP's board of directors in 1986. After the company's internal investigation, he was identified as the member who leaked information to the media. The board agreed that he would not be nominated for another term on the HP board. On Tuesday, Sept. 12, 2006, he announced that he would be resigning from the board, effective immediately.
Keyworth also serves as chairman of the board of directors and senior fellow of The Progress & Freedom Foundation, a public policy research institute, since 1995. He was science adviser to President Ronald Reagan and director of the White House's Office of Science and Technology Policy from 1981 to 1986.
Mark Hurd signed on as HP's chief executive and president in March 2005. Hurd's appointment came less than two months after the company ousted its former chief executive, Carly Fiorina. Former director Perkins was seen as a major proponent of that shuffle in leadership, as he had rejoined the board shortly before Fiorina's departure and Hurd's appointment. On Sept. 22, 2006, Hurd became chairman when Dunn resigned; he also remains CEO and president.
Lawrence Babbio has served as vice chairman and president of Verizon Communications since 2000. He is also on the board of directors for HP, after having been on Compaq's board from 1995 until the company's merger with HP.
In a letter to HP's board of directors (click for PDF), Tom Perkins stated: "Indeed, director Larry Babbio's company, Verizon, has filed fraud suits against persons and companies engaged in pretexting," a controversial data-gathering technique that HP admitted it used during the course of the internal investigation of its board members.
Larry Sonsini is chairman of Wilson Sonsini Goodrich & Rosati, where he has served as CEO and chairman for more than 20 years. He has specialized in corporate law, corporate governance, securities, and mergers and acquisitions and was involved in HP's merger with Compaq. He was a member of the board of directors of the New York Stock Exchange from 2001 to 2003 and currently serves on two NYSE committees.
Wilson Sonsini Goodrich & Rosati serves as HP's outside counsel. On June 28, Tom Perkins received an e-mail from Sonsini confirming that the investigative firm hired by HP did access the home-phone and cell-phone records of directors using pretexting methods.
Ann Baskins served as HP senior vice president, general counsel and secretary. She worked at the company from 1982 until she resigned hours before hearings began with a U.S. House of Representatives subcommittee on Sept. 28, during which she exercised her Fifth Amendment rights not to incriminate herself.
In her role as corporate secretary, Baskins was responsible for handling formalities related to the board of directors, including managing minutes of board meetings. Minutes of the meeting that took place on May 18, during which Tom Perkins resigned, were contested by Perkins, who wanted minutes to reflect details surrounding his sudden resignation.
Specifically, in a July 18 e-mail addressed to Baskins, Perkins requested that the meeting minutes reflect his questioning of the legality of techniques used in the internal investigation of board members. Perkins stated at the meeting that he felt "betrayed" by Patricia Dunn for having continued with the investigation against his advice, and he asked the board to delay a vote (click here for PDF of letters and e-mails to and from Baskins).
Bill Lockyer is the attorney general of the state of California. His office is investigating the nature of the techniques used in acquiring phone records of HP board members and several reporters, including two who work for News.com.
In a filing with the Securities and Exchange Commission, HP acknowledged the use of pretexting during the course of the investigation. Lockyer has stated that the company's probe violated two state laws related to identity theft and illegal access to computer records. The attorney general's office must determine who should be held legally responsible for use of the technique and against whom, if anyone, charges should be filed.
Lawrence T. Babbio, Jr. (since 2002)
President of Verizon Communications
Sari M. Baldauf (since 2006)
Former GM of networks for Nokia
Richard A. Hackborn (since 1992)
Former chairman of HP
John H. Hammergren (since 2005)
Chairman of McKesson Corp
Mark V. Hurd (since 2005)
CEO of HP. Former CEO of NCR Corp
Robert L. Ryan (since 2004)
Former CFP of Medtronic
Lucille S. Salhany (since 2002)
CEO of JHMedia
Robert P. Wayman (since 2005)
Current CFO and former interim CEO of HP
Author: Jennifer Guevin
Editors: Jim Kerstetter, Scott Ard, Kari Dean McCarthy
Design: Mitjahm Simmons
Production: Kristina Wood
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