Changing Course At Best Buy
Professor Dan Siciliano spoke with Jennifer Bjorhus of the Star Tribune on why it was a "good sign" for corporate governance for Best Buy Chairman Richard Schulze to step down after an investigation found that he knew the company's CEO was having a relationship with a female employee and failed to alert the audit committee.
The investigative report that Best Buy directors received over the weekend presented them with their second sensitive personnel situation in just a couple of months.
First they'd learned of what the report called an "inappropriate relationship" involving CEO Brian Dunn, leading to his April departure. Now they faced a situation that was in some ways even trickier: a report that reflected badly on company founder Richard Schulze, the man who has led Best Buy in one capacity or another for nearly half a century.
F. Daniel Siciliano, a law professor and head of Stanford University's Rock Center for Corporate Governance, said Schulze's departure was a "very good sign" that corporate governance is being taken seriously by the company's independent directors, who asserted their power.
"The board acted pretty quickly and decisively about the chair's coverup," Siciliano said. "That behavior is more clearly inappropriate than the CEO's behavior. Sitting on an allegation? There is no real excuse."