Harvard Business Review September 8, 2010 Oracle announced Monday that it was hiring the semi-disgraced Hurd, former CEO of HP, as co-president. Oracles’ shares then jumped up 5.76% on Tuesday, a day when the overall market was down, adding almost $7 billion to the company’s market capitalization. Then HP announced it was suing Hurd to keep him from taking the job.
Look how differently HP and Oracle value Mark Hurd? HP is a company where the outside directors, a group of impressive individuals with no deep connection to the company are currently running the show. Oracle has some reasonably distinguished outside directors as well, but it’s clearly Ellison who calls all the shots. So Ellison was able to make the judgment that Hurd would be a good addition to his company, without having to worry a lot about getting second guessed, while the HP’s board appear to be obsessed with the risks- first of keeping Hurd abroad and now of keeping him out of Oracle’s hands.
The real question here is the outcome of all this really better for HP shareholders and employees? What would have happened if the company had a board populated by compliant insiders and friends of the CEO? A board made up of outsiders is probably going to be more preoccupied with risks than with opportunities. So is an independent board really able to steer the ship more effectively?
