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Board fights replace clubby HP history

The Wall Street Journal reports that HP's board of directors is refusing to renominate a director in next year's election because he has leaked information to the press.

No, not The 3000 NewsWire. But the Journal's story, which anybody can read online until Sept. 13, covers the fall of the board member most responsible for HP's move to exit the 3000 market: Carly Fiorina. "If it's not growing, it's going," was Fiorina's motto in the years after taking the HP reins. The 3000's limited growth made the platform a candidate for discontinuance, using her standard. Now the board member who wanted Fiorina's power de-centralized is on the chopping block.

Newsweek has a report on a Web site that headlines HP chairwoman Patricia Dunn as the person who has "spied on the home phone records of its board of directors to catch a leaker."

The WSJ report sketches a board running an HP far different from the one that created that HP 3000. Keyworth has been on the board for 20 years, almost since the time HP released the "Mighty Mouse" Series 37 HP 3000, the industry's first office server that could be used outside a computer room, on carpet with standard AC.

"A board can't serve effectively if there isn't complete trust that what gets discussed stays in the room," said Dunn in the WSJ article. Dunn became the non-executive chairman of the HP board last year, once Fiorina was ousted from the chairman and CEO posts. Before Fiorina was fired, HP's board never had anything but an executive chairman.

Keyworth wanted Fiorina's grip on the company loosened, the WSJ said in its story. Now HP will be discontinuing his service on the board, by next spring, for talking about HP's plans with the press.

The Journal writers, who relied on a lot of leaked information while Fiorina was being ousted, dug into their files for blow-by-blow accounts of the blowups in HP's boardroom this spring. The Journal says leaking information to the press from disgruntled directors is pretty commonplace in business.

"The only people who leak more to the press are prosecutors," quips John C. Coffee Jr., a Columbia University law professor. Directors have a fiduciary duty to keep inside information affecting the share price confidential, but other leaks wouldn't necessarily violate any rules, says Mr. Coffee.

"Carly sought to make the leaks the No. 1 issue," said one board member, "and the board was seeking to make performance the No. 1 issue." Board members say the leak, and Ms. Fiorina's reaction to it, didn't cause her demise, but probably accelerated it.