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"Leo Apotheker and Ray Lane\nFORTUNE \u00A0&amp;#8212; It\u2019s been a rough several months for Hewlett-Packard\u2019s \n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\tHPQ\n\t\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\n\t\t\t board. First they had to deal with a scandal that led to the sudden departure of their Chairman and CEO. Then they had to begin a search for new leadership. Finally, a third of the board that picked that new leadership duo was swept away by it just a few months later. Yet despite the company\u2019s best efforts, it\u2019s still plagued by lingering controversies stemming from former CEO Mark Hurd\u2019s departure. \u00A0This all, of course, started last summer, when an investigation of Hurd\u2019s relationship with a former contractor and fuzzy expense reports led to his resignation.\nThen, shortly after the company picked tech industry heavyweight Ray Lane as its new Chairman of the Board, Lane decided to replace a third of HP&amp;#8217;s directors in one fell swoop. But the attempt to overhaul the board didn\u2019t go as smoothly as expected. In early March, proxy advisory firm Institutional Shareholder Services said HP went against internal policy by allowing its new CEO, Leo Apotheker, to participate in the selection of new board members. ISS recommended that shareholders vote against several of the directors up for election.\nDespite the recommendation, last week HP\u2019s investors approved all 13 new and returning board members at the company\u2019s annual shareholder meeting. But that doesn\u2019t mean the company can move past the Hurd scandal quite yet.  For starters, HP is still battling a shareholder lawsuit that alleges the board violated its duties by granting Hurd a severance package worth upwards of $40 million, instead of firing him. What\u2019s more, while HP\u2019s investors may have approved the board\u2019s recent makeover, they also expressed ongoing concern about pay packages awarded to both Hurd and Apotheker.\nAt last week\u2019s shareholder meeting, about half of HP\u2019s investors voted against the company\u2019s pay packages for top management, which includes the hefty severance check Hurd received after stepping down last year. The vote, however, was advisory so it doesn\u2019t mean HP will have to change its policies in any way. Still, the message from shareholders was loud and clear enough for HP to respond publicly.\n\u201CWhile we are disappointed with the outcome of the advisory shareholder vote, HP intends to carefully consider our shareholders&amp;#8217; perspectives regarding executive compensation matters and will take those views under advisement when making future decisions relating to executive compensation,&amp;#8221; HP said in a statement.  So where does HP go from here?\nDespite the multiple rounds of criticism, the company\u2019s newish chairman of the board, Lane, maintains that HP is in a good position to move forward.  \u201CThe outcome [of overhauling the board] was that we got through this and we now have a forward-looking board,\u201D Lane, also a managing partner at venture capital firm Kleiner Perkins Caufield &amp;amp; Byers, told Fortune in a recent interview about the incidents.\n\u201CThis board doesn\u2019t have the baggage of looking backwards,\u201D Lane continued. Unfortunately, that&amp;#8217;s probably not completely accurate. The company does have to look backwards &amp;#8212; it has to contend with years of cost-cutting, layoffs, and seemingly ill-managed acquisitions meant to bolster an enterprise software and services\u00A0business\u00A0that has yet to pay off\u00A0significant\u00A0dividends. And it hardware business can only shore up the company for so long, as margins there continue to erode in the face of overseas competition. The board will have to look back constantly, to do a best-guess accounting of how long the &amp;#8220;old&amp;#8221; HP can financially support the company while Apotheker hurriedly builds the &amp;#8220;new&amp;#8221; HP out of nearly whole cloth. It won&amp;#8217;t be an easy time, and in that way, what&amp;#8217;s facing the company has surprisingly little do with whether Mark Hurd had stayed or gone: a new strategy was going to be needed sooner rather than later, no matter who was sitting in the CEO suite.\nOf course, making nice with shareholders will go a long way &amp;#8212; and doing that will take a lot more than swapping out a few board members. To finally move past the Hurd debacle, HP will need to prove to investors that this new strategy, under its new management, will succeed. Lane has argued that the board needed to match the company&amp;#8217;s new aims, something board guru Ram Charan has also defended as necessary. However, now that the team is in place, the direction is set, and the task is clear, the palace intrigue has to die down to normal levels for the company to move beyond dysfunction into turnaround mode. In other words, what&amp;#8217;s really needed to get shareholders, customers and employees past the machinations of the late-Hurd and early-Apotheker/Lane eras, and on board with the new Hewlett Packard, might be as simple as this: transparency.\nMore from Fortune:\n\nMicrosoft&amp;#8217;s office: Why insiders think management has lost its way\nOracle&amp;#8217;s bold moves\nSteve Ballmer&amp;#8217;s hits and flops"^^<http://www.w3.org/2001/XMLSchema#string>
<http://fortune.com/2011/03/31/has-hp-finally-moved-past-the-hurd-scandal/>