TCB Survey: 55% Say Schulze’s Actions Didn’t Merit His Exit
More than half of the respondents to a recent Twin Cities Business survey said they believe that the recent actions of Richard Schulze were not severe enough for him to exit his role as chairman of Richfield-based Best Buy Company, Inc., which he founded.
On the heels of an investigation into the alleged misconduct of former Best Buy CEO Brian Dunn, the company announced that Schulze would step down in June from his role as chairman.
Global law firm WilmerHale, which Best Buy’s audit committee hired to conduct the investigation, found that Dunn violated company policy by engaging in “an extremely close personal relationship with a female employee that negatively impacted the work environment.”
It also found that Schulze “acted inappropriately” when he failed to notify Best Buy’s audit committee after learning in December about allegations of such a relationship. When a company executive provided Schulze with a written statement from an employee that contained allegations about a possible inappropriate relationship, Schulze confronted Dunn but failed to inform the audit committee, the investigation found.
Fifty-five percent of respondents to a TCB survey said that Schulze’s actions didn’t merit his exit; 40 percent said they did; and the remaining 4.5 percent said they were undecided. A total of 110 people responded to the survey.
“Mr. Schulze stepping down seems disproportionate to the findings,” one respondent wrote. “Unless, of course, there is something else that led to his departure that isn’t being shared publicly.”
Another respondent described Schulze’s actions as inappropriate, but said that the board currently needs the knowledge of its founder in order to succeed—especially given the recent departure of several key executives.
“Accountability is critical in today’s business world,” wrote another. “Integrity needs to be maintained all the way up and down the chain of command.”
Others claimed that the investigation report didn’t provide sufficient information to judge whether Schulze’s exit was merited.
Following the release of the report’s findings, experts weighed in on how Best Buy handled the matter. Some praised the company’s actions, while others claimed it didn’t go far enough.
F. Daniel Siciliano, a law professor and head of Stanford University’s Rock Center for Corporate Governance, told the Star Tribune that Schulze’s exit was a “very good sign” that corporate governance is being taken seriously by the company’s independent directors.
Jeffrey Sonnenfeld, senior associate dean for executive programs at the Yale School of Management, told the Minneapolis newspaper that he found the board’s response to both Dunn and Schulze “amazing” in terms of its leniency.
Best Buy’s board of directors elected director Hatim Tyabji to succeed Schulze as chairman, effective at the conclusion of the annual meeting on June 21. When Schulze steps down as chairman, he will become founder and chairman emeritus, an honorary position. Schulze will serve the remainder of his director term, which goes through June 2013.