Common Sense: Voting to Hire a Chief Without Meeting Him

The answer, say many involved in the process, lies squarely with the troubled Hewlett board. “It has got to be the worst board in the history of business,” Tom Perkins, a former H.P. director and a Silicon Valley legend, told me.

Interviews with several current and former directors and people close to them involved in the search that resulted in the hiring of Mr. Apotheker reveal a board that, while composed of many accomplished individuals, as a group was rife with animosities, suspicion, distrust, personal ambitions and jockeying for power that rendered it nearly dysfunctional.

Among their revelations: when the search committee of four directors narrowed the candidates to three finalists, no one else on the board was willing to interview them. And when the committee finally chose Mr. Apotheker and again suggested that other directors meet him, no one did. Remarkably, when the 12-member board voted to name Mr. Apotheker as the successor to the recently ousted chief executive, Mark Hurd, most board members had never met Mr. Apotheker.

“I admit it was highly unusual,” one board member who hadn’t met Mr. Apotheker told me. “But we were just too exhausted from all the infighting.” During Mr. Apotheker’s brief tenure, once-proud H.P. has become a laughingstock in Silicon Valley. Its results have weakened, its stock has plummeted and his strategy shifts have puzzled people inside and outside the company. Hewlett had no immediate comment.

The immediate cause of dissension was the board’s decision in August 2010 to demand the resignation of Mr. Hurd, who had himself assumed the top position in the midst of board leaks and a phone pretexting scandal surrounding efforts to determine the source of the leaks that had laid bare irreconcilable differences among directors. He had replaced Carly Fiorina, who was also summarily ousted by the board.

Though not without detractors, Mr. Hurd pulled off one of the great rescue missions in American corporate history, refocusing the strife-ridden company and leading it to five years of revenue gains and a stock that soared 130 percent. Then came an incendiary letter from the activist lawyer Gloria Allred, charging that Mr. Hurd had sexually harassed a former soft-core pornography actress named Jodie Fisher, whom he had hired as a consultant for H.P. The accusations set off another fierce board battle.

The board named a committee headed by Robert L. Ryan, a former Medtronic executive and H.P.’s lead director, and Lucille Salhany, another director who was a former chairwoman of Fox Broadcasting, to investigate the accusations. An outside law firm concluded that Mr. Hurd was innocent of the harassment charges but had submitted false expense reports in what seemed an effort to conceal the relationship. Mr. Hurd denied having an affair with Ms. Fisher (as he has since done publicly) and said his assistant had first contacted her after seeing her on a reality television program.

As one director told me, “We said, ‘Mark, just tell us the truth.’ He stuck to this story. He interviewed the woman twice, there was no search firm, no job posting, no discussion with anyone else. He met with her alone on more than one occasion. To be the hostess at a party? Give me a break.” Complicating matters was evidence H.P. obtained from Mr. Hurd’s office computer showing that he had viewed videos of Ms. Fisher.

Once some board members became convinced that Mr. Hurd had not been totally truthful, they insisted he had to be fired. Mr. Ryan convened a meeting to decide Mr. Hurd’s fate by saying that he wanted to give every director an opportunity to speak, but that he would begin.

“I don’t believe him,” he said bluntly, and noted that under H.P.’s employee guidelines, any other employee who lied to the board would be fired. He was strongly backed by Ms. Salhany.

Two other members, Joel Z. Hyatt, a media executive and founder of Hyatt Legal Plans, and John Joyce, a former private equity partner, were adamant that Mr. Hurd should stay, at least long enough to groom a successor and arrange for an orderly transition.

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