Back in April, the CEO of Best Buy resigned after an investigation of his conduct was started by the board. Today, Best Buy announced the conclusion of the investigation and the resignation of the founder. Read on for details.
According to the news release that announced the investigation’s conclusions and the resignation of the Chairman and founder, the former CEO, Brian Dunn, carried on an affair with a female staffer and the Chairman failed to notify the full Board on a timely basis. Here is a summary of the findings:
The Board also publicly released the results of an independent investigation into personal conduct allegations involving former CEO Brian Dunn, who resigned in April. When these allegations, which were unrelated to the company’s operations or financial controls, were brought to the Board’s attention, the Audit Committee immediately initiated an investigation. Prior to the completion of the investigation, Mr. Dunn resigned.
When the Audit Committee was first informed of the allegations in mid-March 2012, it hired outside law firm WilmerHale to conduct an independent investigation. In the interest of transparency and accountability, the board made a commitment to publicly release the findings.
Key findings of the investigation include:
· The CEO violated Company policy by engaging in an extremely close personal relationship with a female employee that negatively impacted the work environment.
· The CEO’s relationship with the female employee demonstrated extremely poor judgment and a lack of professionalism, but the inquiry revealed no misuse of Company resources. The inquiry also revealed no misuse of aircraft.
· In addition, as part of the investigation, it was determined that the Chairman of the Board of Directors acted inappropriately when he failed to bring the matter to the Audit Committee of the Board of Directors in December 2011, when the allegations were first raised with him.
“In December, when the conduct of our then-CEO was brought to my attention, I confronted him with the allegations (which he denied), told him his conduct was totally unacceptable and contrary to Best Buy’s policies and everything I, and the Company, stand for. I understand and accept the findings of the Audit Committee,” said Mr. Schulze.
Before you feel too badly for the founder, he admitted he made a mistake, and still is Chairman Emeritus through June 2013! And Dunn gets a cool $6.6 million to go away.
Here’s hoping that the new Chairman, Hatim Tyabji, can focus BBY on actually selling electronics at a profit in the future!
BBY was trading at $19.28 at 1400 hours Eastern today, up $0.28 (1.48%), down from $32.85 as the high point in the last year, last seen on June 21 2011.
Best Buy News Release BBY Quote: NYSE
