WEB EXTRA: Read The Released Report (.PDF)
MINNEAPOLIS (WCCO) — Best Buy founder Richard Schulze is stepping down as chairman after an investigation found that he knew that the CEO was having a relationship with a female employee and did not alert the audit committee.
The company’s board of directors announced they had elected Hatim Tyabji to serve as chairman of the company following their annual meeting this June. Tyabji has been on the board since 1998.
Dunn announced he was leaving the company last month, prior to the completion of an internal investigation. Dunn was a 28-year Best Buy veteran who had been CEO since 2009.
College of Saint Benedict and Saint John’s University professor Louis Johnston said it was both surprising to see the founder step down from the company he created and also not surprising “given that the investigation into Brian Dunn is getting deeper and wider.”
The board released the results of the investigation, which says Dunn violated company policy by carrying on a relationship with an employee. The report says, however, that there was no misuse of company resources.
The investigation determined that Schulze acted inappropriately by failing to bring the relationship to the board’s audit committee last year, when he was first made aware of the allegations.
Johnston commented on where the company is currently.
“They’ve been doing about as well as can be expected. They have a situation on their hands that’s very difficult. They’re fighting off Amazon, and the online retailers on one hand, and Wal Mart and Target on the other are eating into their situation, and so they really need some radical changes. And they’re doing the best they can to kinda keep the ship afloat,” said Johnston. “I think it will actually help in the sense that one of the things people out in the market are looking for is true reform. They’re looking to make sure that this investigation is thorough, that it is clean, and that there really are gonna be changes at the company. And with Schulze’s stepping down that’s a clear sign that this is gonna be the case.”