Yet the boardroom parallels in both cases cannot be ignored. The board acted quickly. Not hastily, but not with drawn-out, interim dithering, either. Just over a week separated the April 9 Compaq earnings shock and Pfeiffer's ouster. Though the board had doubtlessly been observing the situation for some time, it was able to quickly read current management strategy, judge its negative impact on both earnings and market confidence, and quickly cut its losses.
Tech companies are more likely than old-line industrials to split the positions of CEO and chairman.
By keeping the role of chairman firmly in the hands of Ben Rosen, Compaq has shown the value of an independent power center in the boardroom. A separate chairman, particularly one who owns over five million shares in the company as Rosen does, has both the means and motive to counterweigh the powers of management. However, a separate chairman is not the only venue for such board power. The most noted example was John Smale at General Motors. No sentiment in the boardroom, please.