In 2015, shortly after Hewlett-Packard announced its split into two separate companies, Lesley Slaton Brown began consulting with the company’s leadership, anchored at the time by CEO Meg Whitman.
The first thing Brown, now HP’s chief diversity officer, told them was, “We have got to start with a diverse board. There’s no better time,” she recalls. The 12 person board was to be halved—six on each side—and each faction was tasked with prioritizing diversity and their respective organization’s long-term strategy needs. Seven years later, both companies, HP Inc. and Hewlett Packard Enterprise, made the top 10 of the Modern Board 25 list, Fortune’s ranking of the most innovative corporate boards in the S&P 500.
“HP has one of the most storied and successful histories in tech,” says Levi Strauss CEO Chip Bergh, who joined HP’s board in 2015. “We knew we had all the ingredients to create something special.”
Brown, who joined HP in 2015, says the split pushed the company to rethink its approach to corporate culture.
“We believe that progress really starts from the top,” Brown tells Fortune. “The influence of our board of directors…is phenomenal,” noting that HP’s board is diverse, multi-skilled, and actively engaged with the company. She points to a reverse mentorship program in which HP’s board leaders partner with executives across the company. The initiative provides directors with increased visibility into day-to-day operations.
“Diversity was one of the key values that we embraced,” says Enrique Lores, who was tapped as CEO of HP in 2019. (He was head of the separation management office in 2015.) In 2021, 44% of U.S. hires came from diverse backgrounds, up from 34.5% in 2017. One-third of leaders at the director level and above were women, and one-third of employees in IT and engineering were from racial or ethnic minority backgrounds. Its board composition was 46% female and 46% racial or ethnic minorities.
Lores adds that the revamped board gave HP leadership the confidence to challenge the status quo. And across its workforce, all employees were encouraged to view themselves as founders of this new organization.
“This founding spirit, willingness to change things, startup mentality and strong values, I think is what helped us at the beginning and really has stayed with us through these seven years,” Lores says. He credits board leaders for their insight on a number of strategic business initiatives that have panned out for the company, including the development of subscription services, expanding mobile product offerings, establishing COVID-19 protocols, aiding in financial restructuring so that cost models became more efficient, and allocating additional resources to consumer product innovation.
“Seven years ago, this was primarily a hardware-based business,” says HP director Stacy Brown-Philpot, formerly CEO of TaskRabbit. “Today, it’s a much broader range of solutions—from growing businesses in adjacent markets like gaming and peripherals, to a rapidly expanding portfolio of services and subscriptions.”
Brown-Philpot emphasizes that immediately developing a strong organizational culture for the newly created company, along with increasing board diversity, greatly contributed to the bottom line.
“Companies are judged not only by the products they make,” she says, “but also by the progress they make.”
Aman Kidwai
aman.kidwai@fortune.com
Headlines
Underage data. Many popular apps for kids track their information, even if it’s legally prohibited for those under the age of 13. Two-thirds of the 1,000 most popular iPhone apps likely to be used by children send their personal information to advertisers, according to a report from Pixalate, thanks in large part to loopholes. For example, many apps clearly marketed to younger users claim to be for older audiences so they can continue to track user data. Washington Post
Hybrid housing. Real estate companies are reporting a new trend that correlates with the expansion of hybrid and remote work: some buyers are getting a city crash pad near their place of work—sometimes shared with coworkers—and then buying larger homes one or two hours away, where real estate is cheaper. Bloomberg
Tech’s new era. "The cost of capital has changed materially," a prominent venture capitalist recently tweeted, signaling a new era for tech startups and the industry writ large. The S&P 500’s IT sector is down 19% this year, CNN notes, and the Nasdaq index is down 20%. This is due to a maelstrom of events, including the Russia-Ukraine conflict, rising inflation, supply chain issues, and cryptocurrency crashes. CNN
Gen-Z, meet the office. While many are fixated on return-to-office strategies, employers must consider that younger employees don’t know a working world before the year 2020. As Martha Bird, business anthropologist at ADP (what a title!), writes, Gen-Z isn’t going back to the office, it’s discovering it, and employers should adjust. Fortune
BOARD MOVEMENT
Charles Kane, MIT professor and former CFO of RSA Security, is joining the board of directors at Zapata Computing and will serve as audit chair. Coupa Software added Kanika Soni, chief commercial officer at TripAdvisor, to its board. Jennifer N. Green, VP of global mergers and acquisitions at YUM! Brands, and Timothy S. Huval, chief administrative officer at Humana, are joining the board of Republic Bancorp. Software company Plume is adding three new independent directors: Magdalena Yesil, founding board member of Salesforce, Roxanne Oulman, former EVP and CFO at Medallia, and Tony Werner, former CTO at Comcast. Mark Hawkins, former president and CFO at Salesforce, is joining the board of Cloudflare. Craig MacKay, currently a partner and managing director at England & Company is joining the board of Equitable Holdings, the parent company of AllianceBernstein and Equitable.
View from the C-Suite
Employee loyalty is on the decline. That’s according to Mercer CEO Martine Ferland who says that the employee-employer relationship has permanently transformed.
These may not be such bold statements for anyone following the business world closely, but as CEO of a leading benefits consultancy, Ferland does have insight into what employers can do about these rapid changes. In an interview with Fortune’s Phil Wahba, she notes that flexibility, tuition assistance, and wellness services are now "table stakes,” and explains why organizational reputation and values are far more important to workers than they used to be.
Read the full story here.
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