Is HP competing for "worst board ever" honors?

By Ben Berkowitz

(Reuters) - If the board of Hewlett-Packard Co is not already ranked as one of the worst in corporate America, there are some who think it could be a contender.

HP shares surged on Wednesday after sources said the board was meeting and might oust Chief Executive Leo Apotheker after less than a year on the job.

There were also reports the board might pull back on all or part of the restructuring announced just a few weeks ago, including the spin-off of its PC business and the acquisition of British software company Autonomy.

"If (HP) fires Apotheker, cancels Autonomy deal, and keeps PC division, it'll be great for the stock -- and every director should be arrested," outspoken hedge fund manager Eric Jackson said on Twitter in reaction to the news.

Blunt though it may be, if anything the board should be used to such criticism, having been stung by it repeatedly over the last few years.

In 2002, allegations of vote-buying surrounded Deutsche Bank's decision to support HP's acquisition of Compaq, with dissident board member Walter Hewlett accusing the rest of the board of buying Deutsche's support for the deal by tying it to future banking business.

In 2005 and 2006, HP under then-Chairman Patricia Dunn launched an investigation into boardroom leaks, which descended into impersonating board members and reporters in an effort to obtain private phone records. Dunn faced criminal charges, which were ultimately dismissed due to her ill health.

Last year, the board ousted popular CEO Mark Hurd amid unsubstantiated accusations of sexual harassment. Oracle CEO Larry Ellison, a friend of Hurd's who later hired him, accused the board of cowardice and failing to act in the company's interest.

Of the 13 directors reelected to HP's board last March, nine joined the board in 2009 or later, and 12 of the 13 were from 2005 or later. Yet despite the all-star roster and its relative newness, experts said its past stumbles seem to have continued unabated.

"I was trying to think of another company that had tripped up that often in this many years and I found it impossible to come up with another example," said Paul Hodgson, senior research associate at corporate governance advisers GovernanceMetrics International.

"There are boards out there that have made mistakes but they've generally learned from them, eventually. Maybe replacing the board all the time is not the thing to do."

HP said it had no comment.

(Reporting by Ben Berkowitz; Editing by Phil Berlowitz)