SAN FRANCISCO - Hewlett-Packard Co.'s board shakeup, including Ray Lane's exit as chairman, gives Chief Executive Officer Meg Whitman a clearer path to revive growth and shake off years of tumult at the world's largest computer maker.
A former president of Oracle Corp., Lane failed to use his extensive experience in enterprise computing to help Hewlett- Packard's turnaround, and his public gaffes - including being photographed using an Apple Inc. computer - also sometimes served as an embarrassment to the company.
Lane, 66, instead bore the stain of the disastrous 11-month tenure of former CEO Leo Apotheker and the company's acquisition of software maker Autonomy Corp., which led to an $8.8 billion writedown and accusations of accounting fraud. To build on the momentum that Whitman has begun to show, the board is seeking a new chairman with global experience and who can devote more time and energy to revival efforts, Pat Russo, a company director, said in an emailed statement. Until then, Ralph Whitworth will serve as interim chairman.
"Somebody has to be symbolically accountable," said Jeffrey Sonnenfeld, a management professor at Yale University in New Haven, Conn. "The hope is that it puts this behind them so it doesn't become a governance sideshow."
In addition to Lane's exit, directors G. Kennedy Thompson and John Hammergren are departing, Palo Alto, Calif.-based Hewlett-Packard said Thursday in a statement. Lane "decided to step down," Whitworth wrote in a blog posting.
Lane and Whitworth didn't respond to requests via telephone and email for comment.
While Hewlett-Packard shares had rallied 56 percent this year through Thursday amid tentative signs that Whitman is making headway in her efforts to reignite growth, the stock has lost half its value since the departure of Hurd.
Lane, a distinguished-looking, gray-haired elder statesman of Silicon Valley, is known as something of enterprise computing's Mr. Fixit. He helped repair Oracle's relationships with its customers in the early '90s and disciplined the company's freewheeling sales culture during his seven-year tenure there. He then stepped in alongside Apotheker after the departure of CEO Mark Hurd, who left in August 2010 after the board said Hurd violated Hewlett-Packard's code of business ethics.
Lane and Apotheker weren't able to make a transition from the lower-profit personal computers and other hardware the company traditionally sold, to more lucrative software, despite a mandate to expand in that area.
A 1968 graduate of West Virginia University, Lane is listed as one of the university's distinguished alumni and was a 2003 inductee to its business college's Business Hall of Fame.
Former Gov. Joe Manchin appointed Lane to the WVU Board of Governor's in 2008, a post he still holds today. The Raymond J. Lane Park adjacent to WVU's Erickson Alumni Center is named in his honor.
Lane is giving up his chairmanship two weeks after investors re-elected him in a narrow majority of votes, issuing a rebuke of his oversight of the botched Autonomy acquisition.
"It's not typical to get a withhold vote, and if you do you'd usually resign," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. "Lane deserves credit for stepping down. If he'd stayed on he'd become the issue."
After the March 20 vote, during the company's annual shareholder meeting at the Computer History Museum in Silicon Valley, Lane believed he wasn't given sufficient credit for remaking the company's board and ousting Apotheker, a person familiar with his thinking said. Shareholder unrest was also making it difficult for Hewlett-Packard to attract additional, high-quality directors to its board, this person said.
The second board overhaul in two years underscores shareholders' dissatisfaction with the company's performance and the takeover of Autonomy. The writedown of Autonomy in November capped three years of management upheaval, strategy shifts and slowing growth that hammered the shares and complicated Whitman's turnaround efforts.
"Lane is clearly the fall guy for the botched Autonomy acquisition," said Bill Kreher, an analyst at Edward Jones & Co. who rates Hewlett-Packard a sell. "When he was announced as the chairman, we were pleased with that decision, but at this time it's in the best interest of the company to move on."