The last place Carly Fiorina expected to be last Wednesday was home. A hard-driving, jet-setting business titan, the CEO of Hewlett-Packard had a packed calendar that week, including a meeting with President Bush. She had recently returned from the World Economic Forum in Switzerland, where she always loomed large, even at an event stuffed with corporate Pooh-Bahs and heads of state. Now, holed up in her Los Altos Hills, Calif., home and protected by three security guards, she fielded e-mails from well-wishers and contemplated her next career move--just like so many other cashiered Silicon Valley denizens in recent years. Only none of them had made as big a thud.
She was the consummate celebrity CEO--right up until her final moment. Just a few weeks ago, the Hewlett-Packard board rapped her on the wrist for the company's dismal performance and ordered her to give some control of HP's four key divisions to line executives. Outwardly, her ever-confident manner gave no hint of the humiliating demotion, even after the reorganization leaked to the press. But charisma and confidence can go only so far. On Feb. 6, board members held an emergency meeting at an O'Hare Airport hotel. The next day they asked her to step down. And so the most powerful woman in American business, the poster girl for high-powered celebrity CEOS, was out.
The board of directors at Hewlett-Packard had admired many things about their star CEO. Asked to bring change to the doddering Silicon Valley giant, she pursued the task fearlessly, her efforts culminating in a controversial merger with Compaq. Asked to inject pizazz into HP's pedestrian marketing, she overhauled it right down to the corporate logo. Asked to create a strategic vision for a company that had none, she came up with dazzling insights into "transformational trends" and a hyperdigital future in which HP would serve consumers and corporations at every stage. But the board ultimately concluded that Fiorina had one significant weakness as a chief executive: she just wasn't very good at running the business. That's a problem when you head an $80 billion behemoth with lackluster earnings that is beset on all sides by competitors like IBM, EMC and Dell. "Looking forward, we think the job is very reliant on hands-on execution, and we thought a new set of capabilities was called for," said Patricia Dunn, an HP director who became nonexecutive chairwoman.
That Fiorina, 50, lost a power struggle to her board is emblematic of a dramatic shift taking place in corporate America. With board members of companies from Disney to Enron getting hauled into court to answer for their stewardship, directors are becoming ever more emboldened to give poor- performing CEOs the boot. In fact, 92 CEOs departed in January, the highest number since February 2001, according to Challenger, Gray & Christmas, an outplacement firm. "Boards are trying to demonstrate that they are doing their duty," says Warren Batts of the University of Chicago, former CEO and director of several FORTUNE 500 companies.