When we read the report in the San Jose Mercury News on Tuesday that venture capitalist and former Hewlett-Packard board member Tom Perkins was making pointed remarks about corporate governance—including some fierce jabs at former H-P board chair Pattie Dunn—we all thought: why bring this up now?
After all, Tom won this fight last year, right? Pattie lost her position at the head of the board table, then had to leave the board altogether. She became a “fallen” or “disgraced” “former corporate leader.” Her name became synonymous with corporate scandal, and especially pretexting. She was indicted by the California attorney general. She even got cancer. Isn’t it time to leave Pattie in peace? Even DealBreaker hadn’t picked on “Pattie Cakes” for months.
So why now? We thought maybe it was the book. Tom’s got his memoirs coming out soon. Maybe he wants the publicity. It sounds a bit cheap to drag a sick, unemployed and indicted woman’s shame back before the public just to sell a few more copies of a book. Especially when you are already rich enough to afford a $100 million yacht. Does Tom Perkins really need to worry about whether his book sells?
Today the Wall Street Journal‘s editorial page runs the full text of the speech that was reported earlier in the Mercury News. And there’s one line that might shed some light on why Tom is dragging out the whole H-P thing again instead of sailing around the South Pacific.
And so, when the “wet kiss” Cnet.com article about how great Mark Hurd was at strategy appeared, Ms. Fiorina and I agree that Ms. Dunn launched the now infamous “Kona” spying investigation aimed at ridding the board of those directors (the tech committee) most familiar with strategy, whom Pattie assumed were the “evil” leakers. All this is documented in a characteristically long-winded New Yorker article of Feb. 19.
That’s right! It was the New Yorker! And it’s long-windedness!
Of course, we have no idea what Tom’s talking about because, let’s face it, it was the New Yorker. That’s the magazine that’s read by people who want to appear brainy but don’t really want to be bothered with doing stuff like learning very much. But we’ll check it out and report back.
See how far we’ll go for you? We’ll even read the New Yorker!
The ‘Compliance’ Board [Wall Street Journal]
Hey, remember yesterday when we did a couple of posts that weren’t about Tuesday’s market plunge? Remember the one about the remarks about corporate governance by venture capitalist and former Hewlett-Packard board member Tom Perkins? No? You don’t read our posts about corporate governance because (as one reader told us yesterday) “corporate governance is so f—ing boring?”
Well, it’s not quite as boring anymore. Perkins drew a distinction between compliance oriented corporate boards and business guidance oriented boards. Seems like a useful distinction, right? Well, apparently it didn’t go over well with the lawyer for former Hewlett-Packard chairwoman Pattie Dunn. So the Dunnsters are fighting back. And this time it’s personal.
From the San Jose Mercury News:
“Tom Perkins attacked my client. He did so unfairly. He did so falsely when he knows she cannot answer him,” he said in a statement e-mailed to the news media. Dunn can’t respond directly to Perkins’ accusations because of the legal case pending against her. The case erupted after Perkins quit over the way Dunn, then-HP chair, conducted an investigation into boardroom leaks to journalists.
“He’s rewriting the history of what happened,” Brosnahan told the Mercury News. “Normally, I wouldn’t say anything, but when he attacks my client personally, we’re not going to sit here and let him get away with it. It’s just awful what he did.”
Tom Perkins apparently didn’t respond to this. So just imagine him chuckling as he sails his $100 million yacht into the horizon.
[No clue why Pattie's getting her, uhm, lawyers all in a twist about this? Well, to put it mildly, Pattie and Perkins have a bit of a history together. Feel free to check out our H-P Archives for all the gruesome details.] Dunn’s lawyer blasts Perkins [Mercury News]
We’ve noted before that the faddish devotion to compliance-oriented corporate governance—encouraged by everything and everyone from Sarbanes-Oxley, it’s attendant regulatory schema, some of the more opinionated-parts of the business press and the reigning corporate governance gurus—has serious costs that are all too often ignored. The whole corporate-spying pretexting scandal at Hewlett-Packard was probably the public example of this.
Now Tom Perkins, a veteran from the HP wars, has made his first public remarks since the scandal and directed them at exactly this problem. According to Perkins, too many corporate board members are so obsessed with compliance that they don’t know much about the company on whose board they are serving. He draws a useful distinction between two-types of directors–the guidance geeks who understand the business and the compliance nerds who understand legal rules and regulations.
The San Jose Mercury News reports:
During his 35-minute talk, Perkins outlined two kinds of board members, placing himself in the category of an old-style venture capital-type who is extremely involved in the business. He called that type a “guidance director.”
In contrast is the new emerging director, whom he called the “compliance director.” He described that person as someone increasingly focused on Sarbanes-Oxley requirements, who jumps from company board to company board, dispensing and heeding advice from consultants and lawyers.
Perkins, 75, derided the latter, which he called a “plug-to-plug compatible director” who believes he or she is equally capable of serving on a bank board as on that of a technology behemoth such as HP.
And Perkins thinks things are only getting worse. The compliance nerds are beating out the guidance geeks.
But today, he said, with too few “geeks” on its board, HP has evolved fully into a compliance board, “possibly untroubled by worries about technology and marketing strategy.”
“I think the guidance board will vanish and it will be replaced by compliance boards who just listen to lawyers and consultants,” he said, referring to the general corporate trend.