Hewlett-Packard, whose turnaround efforts include strong pushes in software and the cloud, is including former Microsoft software head Ray Ozzie as one of three new members on its board of directors.
The giant tech vendor announced July 15 that Ozzie, former McDonald's CEO and current Walgreens Chairman Jim Skinner and ex-Liberty Media CEO Dob Bennett are the newest members of the board, increasing the number of directors from nine to 12. HP executives said they expect to expand the size of the board even more in the future.
HP CEO Meg Whitman, who is overseeing a massive, multiyear turnaround of the company, said she and other executives will continue to rely on the expertise of all board members while trying to get HP back on more solid financial footing.
"As we move forward with our turnaround, it's a huge benefit to be able to get advice from a board made up of such experienced business and technology leaders," Whitman said in a statement. "For their part, Dob, Ray and Jim have just about seen it all during their careers."
HP—like other established tech vendors such as Dell, Intel and Microsoft—has been hurt by the rapid changes in consumer demand, which has resulted in a steep decline in worldwide PC sales as consumers and business users spend more of their computing dollars on tablets and smartphones. HP officials are still formulating their mobile device strategy. Several years ago HP offered a number of devices running Microsoft's Windows Mobile operating system, then in 2010 it bought Palm for $1.2 billion, with an eye on Palm's webOS mobile operating system.
However, in 2011, the company quickly pulled its webOS devices from the market due to lack of customer interest. HP now sells tablets, and over the past several months, Whitman and other executives have said the company will get back into the smartphone space, which will pit it against such companies as Apple and Samsung.
As part of the turnaround, which includes 29,000 job cuts, Whitman also is pushing HP into a number of enterprise-based growth areas, such as the cloud, analytics and business software. These are areas where Ozzie could help. Ozzie created Lotus Notes, and in 2006 took over as Microsoft's chief software architecture, replacing founder Bill Gates. Under his direction, Microsoft embraced the cloud with the development of its Azure computing and development platform.
Currently he is part of the group behind a startup called Talko, which has yet to come out of stealth mode and reportedly is working on mobile communications software.
According to HP, Ozzie will serve on the board of the technology committee as well as the finance and investment committee.
The board itself has been the target of criticism for several years. It helped then-CEO Carly Fiorina in 2002 push through the controversial acquisition of Compaq, and was caught up in a corporate spying scandal in 2006. It has overseen rapid executive turnover—when Whitman (then a board member) was appointed CEO in 2011, she became the third chief executive for the company in a little more than three years.
The board also approved the acquisitions of services vendor EDS for $13.9 billion in 2008 and the $11.3 billion purchase of software maker Autonomy in 2011. Both moves turned out to be costly: In 2012, HP was forced to take an $8 billion charge on the EDS deal, and months later announced an $8.8 billion write-down on the Autonomy acquisition. Some shareholders have sued HP over the Autonomy deal, accusing executives and board members of not listening to warnings about Autonomy's finances.
In April, HP announced that board member Ray Lane was stepping down as chairman, and two directors left the board. Board member Ralph Whitworth was named interim chairman, and he will remain in that position until a permanent chairman is named.
Among the other two new members, Skinner will join the audit, human resources and compensation, and nominating and governance committees, while Bennett will be part of the finance and investment and audit committees.