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Why HP changed its board

Boardroom shuffle bears stamp of CEO Apotheker, who analysts say is emboldened to be an 'agent of change'rnrn

Hewlett-Packard reshuffled its board this week, adding some prominent tech and business veterans in what may be an effort to escape its turbulent past and give its CEO, Leo Apotheker, some new help.

HP’s board of directors has been a reliable source of drama for Silicon Valley over its battles with former CEO Carly Fiorina, the 2006 phone record spying scandal and the forced resignation of former CEO Mark Hurd after his hiring of a B-movie actress.

“The HP board has been viewed as somewhat ineffectual,” said Chuck House, an HP veteran who now heads Stanford University’s Media X, which develops industry and academic research partnerships. “It was almost viewed as being a board that really caused some havoc for the company.”

The changes on the board “may be an effort to fix that,” House said.

HP is adding five people with deep technology and business experience. Meg Whitman , the former CEO of eBay and most recently a Republican Senate candidate, is being picked up because of her strong entrepreneurial track record, House said.

With Shumeet Banerji, the CEO of management consulting firm Booz & Co., and Dominique Senequier, the CEO of AXA Private Equity in Paris, HP is bringing in executives with international expertise.

Other new appointees include Patricia Russo, the former chief executive officer of Alcatel-Lucent, and Gary Reiner, whose career includes being CIO at General Electric.

Charles King, an analyst at Pund-IT, said the board changes “suggest that [Apotheker] feels that he has great deal of juice to basically come in and be an agent of change.”

House agreed that the selections appear to carry Apotheker’s stamp. “These are all people coming out of industries he has said he wants to target,” he said. “It should be a strong signal to Wall Street that he is trying to construct a board that understands what they want to emphasize.”

The board, after its elections in March, will be set at 13 members. That will mean that since Apotheker’s appointment in September, seven of the board members have been appointed.

That includes the five latest appointments, as well as Apotheker, who is also a director, and Raymond Lane, the managing partner of VC firm Kleiner Perkins Caufield & Byers, who is the non-executive chairman.

The four who are leaving are mostly “legal and financial people, and not strategic players in any sense,” House said.

The four board members who are leaving are Joel Hyatt, the vice chairman and CEO of Current Media; John Joyce, vice chairman and CFO of Silver Springs Networks, a utility networking company; Bob Ryan, the former senior vice president and CFO of Medtronic, a medical technology company; and Lucille Salhany, the president and CEO of JHMedia, a consulting company.

Frank Gillett, an analyst at Forrester Research, said one of the reasons HP hired Apotheker was to get a CEO who understands where value is created today, and less about hardware and more about software and services, including cloud computing.

Currently, HP looks like a “known for selling good products, but it’s not a company that people talk about having a relationship with,” Gillett said. But in this world of software-as-a-service, users are shifting to a continuous relationship with a provider, he said.