Best Buy founder Richard Schulze will step down as company chairman next month after failing to tell directors that his handpicked successor was allegedly conducting an inappropriate relationship with a female employee.
Schulze’s departure follows hot on the heels of the resignation of Yahoo! chief Scott Thompson earlier this week following allegations he lied on his resume.
The electronics retailer disclosed that its board-supervised investigation into chief executive Brian Dunn concluded that he “violated company policy by engaging in an extremely close personal relationship with a female employee that negatively impacted the work environment”.
In a statement on its company website, Best Buy said Dunn’s relationship “demonstrated extremely poor judgement and a lack of professionalism”, however, the company’s investigation found no evidence that he misused company assets.
Dunn resigned before the Best Buy audit committee completed its investigation and received a severance package worth $6,639,311 including stock and a previously earned bonus.
The investigation found Schulze “acted inappropriately” when he failed to bring the matter to the attention of Best Buy’s audit committee back in December last year 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 Schulze.
Best Buy announced that its audit committee chairman, Hatim Tyabji, would succeed Schulze as company chairman.
Best Buy has 167,000 employees and in the light of the audit committee’s findings is launching “an effort to review and enhance, if appropriate, Best Buy’s relevant corporate policies and procedures.”
“The goal of this review is to ensure a positive and consistent workplace environment for all employees at all levels,” the company said in a statement.
Schulze is not the first company head to step aside in the wake of a scandal. Here are five more who took a quick exit stage left:
The founder and chief executive of utilities broker Energy Watch stepped down from his post earlier this year after making racist and offensive remarks on his personal Facebook page.
Ben Polis was also accused of suspending staff members without any supporting documentation during his tenure at Energy Watch and falsely telling another staff member he was being investigated by the Federal Police.
Hewlett-Packard’s Mark Hurd resigned as chief executive officer after an investigation found he had a personal relationship with a contractor who received numerous inappropriate payments from the company.
Hurd created a series of false expense accounts in order to hide a relationship he was having with a female contractor.
While the investigation didn’t find a violation of the company’s sexual-harassment policy, Hurd “demonstrated a profound lack of judgment that seriously undermined his credibility and damaged his effectiveness in leading HP,” General Counsel Michael Holston said.
Football club Manchester City’s chief executive Garry Cook resigned over claims he emailed defender Nedum Onuoha’s cancer-suffering mother mocking her illness.
Cook offered his resignation after an investigation by Manchester City found “there is foundation” to the allegations.
He denied sending the message, claiming his account was hacked.
Chairman Khaldoon Al Mubarak responded to the decision, saying: “Garry has made a remarkable contribution to Manchester City Football Club over the past three years.
“His judgement in this matter should in no way lead to his accomplishments being overlooked.”
The head of the Swiss central bank, Philipp Hildebrand, stepped down after being caught up in a scandal over foreign exchange trades by his wife.
“Aware of the critical situation our country is currently facing, and given my responsibility as chairman… I decided to resign with immediate effect,” Hildebrand said at a press conference in Bern.
Press reports claimed last week that Hildebrand’s wife Kashya profited after buying $504,000 (396,000 euros) last August, just weeks before an intervention by the SNB to halt the rise of the franc.
Hildebrand published emails on the SNB website to show he had no knowledge of the transaction until after the fact, but in resigning he said he was unable to “to provide irrefutable evidence” to prove his innocence.
David Jones chief executive Mark McInnes resigned following claims of “inappropriate behaviour” towards female colleague Kristy Fraser-Kirk.
McInnes said that at two company functions he acted inappropriately towards the staff member in question in a manner “unbecoming of the high standard expected of a chief executive officer”.
“As a result of this conduct I have offered my resignation to the David Jones board and we have agreed to the mutual termination of my employment with the company, effective immediately”.
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
