Many observers place the blame for HP's loss in competitive advantage and stellar reputation squarely on its board of directors because of major strategic errors committed over the last decade. Consider the turbulence in HP's CEO office. Carly Fiorina was fired due to loss of confidence after poor competitive performance post-Compaq merger. Mark Hurd improved the firm's performance, but then engaged in unethical behavior and was replaced by Leo Apotheker. Apotheker led the company poorly and was replaced after only 11 months, following a huge decline in shareholder value (show a 10-year chart of HP's stock price relative to the S&P 500). Meg Whitman has had trouble getting the firm to perform competitively and has flip-flopped on the strategic issue of whether to separate the consumer-based PC and printer businesses from the enterprise parts of the business.

HP's recent history demonstrates the difficult decisions that a board of directors must make when governing a public company:

1. How should a company deal with a situation in which internal stakeholders leak sensitive information to outsiders?
2. Should the board force a highly successful CEO to resign when ethical shortcomings are discovered but before an investigation proves or disproves illegal behavior?
3. Would the company, and the stockholders, have been better served by just reprimanding the CEO?