Ray Lane Out as HP Board Chairman

Outgoing HP chairman Ray Lane

Outgoing chairman

In a move that surprised few, Co. board chairman Ray Lane said late Thursday he was stepping down from his chairman’s role at the world No. 1 IT company. Lane, who rose to prominence at HP in the wake of the scandal surrounding former CEO and was seen as connected to such disastrous initiatives as the hiring of subsequent chief executive and the $12 billion acquisition of U.K. software firm , said he would remain on the board.

The move, which was matched by the announcement that two other board members will be departing entirely, marks yet another distraction for the direction-challenged vendor already wrestling with its share of financial woes, market downturns and executive upheaval.

A former Oracle Corp. executive and Kleiner Perkins managing partner, Lane is seen as current HP CEO ’s strongest ally – he hand picked her from the board to take the job after the Apotheker debacle – but his departure is not expected to affect her position much. She enjoys the support of the majority of HP board members, including Ralph Whitworth, the activist investor who will take over Lane’s chairmanship on an interim basis. Whitworth called Whitman “among the most gifted and skilled business leaders in the world today.”

“After reflecting on the stockholder vote last month, I’ve decided to step down as executive chairman to reduce any distraction from HP’s ongoing turnaround,” Lane said in statement. “Since I joined HP’s board a little over two years ago, I’ve been committed to board evolution to ensure our turnaround and future success.”

In fact, the inside baseball nature of Lane’s position change has little to do with Whitman’s much talked about “turnaround” and won’t impact it much. The board chairman’s fate was sealed at the HP investor meetings last month when 41 percent of shareholders voted against his re-election. Anything short of 90 percent support in those sessions is seen as a vote of no confidence.

In that regard, Lane fared only slightly better than board members John Hammergren and G. Kennedy Thompson who scraped by in the election with 45 percent voting against each. Both have said they will leave the HP board after its next meeting in May. A search is underway for their replacements.

Reducing Lane’s visibility on the board might also help HP from a legal perspective. Lane supported the Autonomy acquisition, an issue due to be mired in years of messy legal wrangling now that HP is seeking redress for fraud and accounting irregularities that it claims led to a nearly $9 billion writedown on the deal.

Whitworth took the opportunity of Lane’s departure and his own ascension to praise CEO Whitman’s work, which he termed “Herculean,” and express confidence in the direction of the company.

“There is a palpable energy and excitement at every level of the company to get our business turned around,” Whitworth said. “We are 100 percent committed to supporting [Whitman] and their efforts to turn around HP and restore it to its rightful place at the pinnacle of global business.

“We will recruit a world-class chairman to take my place as soon as possible, and we also hope to recruit at least two other outstanding directors before the end of this year,” Whitworth added. “While sooner is better, rest assured we will not allow the rush of time to compromise our focus on recruiting the best of the best.”

Of course, none of this rarified maneuvering in the executive lounges means much to the initiatives of greatest importance to customers and partners, namely how it transitions from titan of the by-gone PC era to modern IT enabler and services provider in the age of mobile devices and cloud computing.

While partners may be quick to cheer any move at HP that seems to be moving the once-storied vendor further away from it’s horrible status quo, the Lane resignation and subsequent board jockeying will provide little in the way of substantive change for the company and, in the short term, will only pile on something HP needs least of all: Uncertainty.

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