Global CIO: Can HP's CEO Survive? The Board Talks It Over

Secret surveillance reveals the HP board's contentious conversation about their legally embattled CEO, whose troubles might be only just beginning.
CHAIRMAN RAY LANE: "That's not possible! Don't even try to tell me SAP admitted anything like that—I already told the world that Larry Ellison's doing nothing but making his lawyers go fishing in an empty pond!"

MARC ANDREESSEN: "Ray, does it sound like I'm kidding? SAP rolled over—their lawyers said the admission won't affect damages, which is a pipedream, and that they don't want to let Larry turn the trial into a sideshow and torture people and companies who SAP says aren't even involved, which I assume means Leo."

LANE: "But Leo's not involved! Hell's bells, he told me he's not! And I told the world he's not!"

JOHN JOYCE: "Uh, Ray, let's for one second consider the possibility that Leo somehow gets tangled up in this more than we expected—I'm not saying he is, and we all know you told the world he's not—but it's our responsibility as board members to consider all the possibilities."

ANDREESSEN: "John's right. Let's look at the best-case scenario, and the worst-case scenario. Best case, Leo undergoes a few days of intense questioning, he's able to truthfully deny any connection whatsoever to the theft, he says that in hindsight he should have asked more questions, and then he's outta there. That one we can live with."

[UNINDENTIFIED VOICE, WITH FRENCH ACCENT]: "Pardon moi, but pearheps zere eess no need to bozzer weeth zeess next step of specoolation about worst case, no?"

LANE: "Who the hell is that? Leo, is that you? You're not supposed to be on this call! Jumpin' Jehosaphat!"

[UNIDENTIFIED]: "Zorry, Ray, but you sent zee dial-in info weeth my name on zee leest."

LANE: "Uh, Leo buddy, listen, we all love you and you've got our full and, uh, unwavering support, but this call's just gonna be about a lot of detail stuff that would just bore you, so why don't you hop off and I'll call you in a little while?"

[UNIDENTIFIED]: "Oui, Ray, but let me zay zat as zee guy weeth his head on zee block, I don't zink you all sounded so unwavering, n'est-ce pas? Alors!" (Disconnects.)

RAJIV GUPTA: "My friends, my iPhone battery is dying—I must go as well. This will all work out—Leo has my unwavering support." (Disconnects.)

ANDREESSEN: "iPhone? I-PHONE?!!? Why doesn't he have a Palm?! Good grief—so anyway, back to the worst case. Lucille, you've been worried about this—what's your take on the worst that could happen?"

LUCILLE SALHANY: "Look, people, as I think you know, I'm on the board of indy film producer Echo Bridge Entertainment, and before we all take poison pills on this, let's expand the imagination aperture a bit and get out ahead of this wave and think about selling the film rights of this little potboiler—why should it all just be a big loss for us? With two phone calls, I can get the bidding started in a jiff."

ROBERT RYAN: "Ray, sorry but I gotta run—the Apple guys are here to install my new Apple TV. You know how to reach me. Leo has my unwavering support." (Disconnects.)

SARI BALDAUF: "Ray, forgive me as well, but the delivery guy's here with my new iPad and Mac workstation and Powerbook so ciao for now—send me the minutes. Leo has my unwavering support." (Disconnects.)

LAWRENCE BABBIO: " What the sam hell is going on around here? Are you people nuts? I ordered my Apple TV and iPad and Mac workstation weeks ago, and now I find everybody in the world is getting theirs before I do! I'm goin' down to the Apple store to kick some totally righteous Genius Bar tail! Oh, yeah—and Leo has my unwavering support." (Disconnects.)

[Three more clicks—ambient-heat surveillance indicates Hammergren, Hyatt, and Thompson have also dropped off.]

LANE: "Great day in the morning! Does anybody on this board own any dad-gum HP equipment?!?"

SALHANY: "Ray, Ray, I've got an HP printer at home, but right now my Android's buzzing—I think it's James Cameron calling to bid on our story—no,wait, it might be the Coen brothers! Don't worry—I'll get top dollar and good product-placement terms for HP! Toodles! And pee-ess: Leo has my unwavering support." (Disconnects.)

JOYCE: "Uh, Marc and Ray, I feel kinda outta my depth here—I was at IBM for 30 years but we never faced anything quite like this so I should probably scoot so you two can nail this down. Leo has my unwavering support." (Disconnects.)

ANDREESSEN: "Smooth leadership, Ray—very impressive. But anyway, like I was saying, here's the worst-case scenario I can imagine: Leo tells the whole truth and nothing but, and it turns out to be pretty ugly. In this scenario, he admits that he knew, he admits that those smoking-gun email records Oracle has were indeed written by him, and he admits this went on for some time. That means our new CEO spends his first week—or first month—getting splattered all over the media as at least complicit in this thing Larry has been calling 'industrial espionage,' and then we all have to wonder if the feds will start poking around with followup investigations that could lead to charges.

"Now, Ray, we both know Leo's a tough guy—we know he's a fighter—we know he won't quit. But while all this is going on, just who the heck is going to be running this company that has monthly revenue of more than $10 billion? It's already been just almost three months since we had a CEO, and with this trial and all the other related stuff, Leo could easily be totally preoccupied for two more months—and after that, who the heck knows what the story might be?"

LANE: "Are you saying we should can him? Can him before he even starts? Can him after I told the world he didn't do a darned thing?"

ANDREESSEN: "Ray, I'm saying that as unpleasant as it might be, we must consider the possibility that our decision to hire Leo will blow up in our faces if the very worst happens in this Oracle trial—and whatever wiggle room we might have had before today, SAP's admission that it knew about the 'industrial espionage' wipes that out. We must at least consider the possibility that we'll have to cut our losses and let him go—for the good of the company and our shareholders.

"We have to have a CEO focused 100% on running HP, not on some litigation that has nothing to do with our company! And while it might turn out that Leo will get grilled for a couple of days and then stroll outta there clean as can be, it might not turn out that way. So we, Ray, have got to make a decision: do we stick with Leo or not?"


"Ray? Ray? You there? Who the hell is on the line?"

[UNIDENTIFIED]: "Ello, Marc? Pearheps we should chat a beet before you meck zees beeg decision, yes?"


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GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

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