For HP's Hurd: Boardroom Power Play

The controversy at HP won't go away. Perhaps it didn't help that the company's investigator searched the personal records of journalists (yes, this is usually a bad PR move).

In fact HP had an emergency board meeting on Sunday. There was no indication what the topic was. But, hey, what else could the board be talking about?

Thomas Perkins, who resigned from the HP board when he learned about the investigation of the company's board, made his opinion clear: the chairman of the board, Patricia Dunn, must resign.

He certainly has a lot of credibility on the matter. After all it was in 1963 that Bill Hewlett and Dave Packard selected Perkins to head-up the research department at HP.

As for Dunn, she led the investigation of the HP board. And there is always a risk these things can go awry.

And things certainly did. A contractor of the investigation firm used the questionable technique of pretexting, which involves personating people to obtain phone records. Now California Attorney General Bill Lockyer is looking into the matter.

Interestingly enough this mess may be great news for HP's current CEO, Mark Hurd. Over the past year he has greatly improved the operations of the company, as the stock price has soared. He is also making significant headway against fierce competitors like Dell.

Given all this the board will probably be very reluctant to rid HP of Hurd.

But if Dunn leaves, as well as George Keyworth, the board member under investigation. Hurd will be able to name his own board members. What's more, he may even become the new chairman of the board.

Perhaps this is why HP's stock has held strong throughout the drama.

But the drama is going to continue. The board is going to resume its meeting today. Stay tuned.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.