Best Buy founder Richard Schulze stepping down as chairman in wake of CEO scandal
According to today's press release, Schulze "acted inappropriately" with his handling of the Dunn scandal.
This morning, Best Buy announced that founder Richard Schulze is stepping down as chairman in the wake of the scandal surrounding former CEO Brian Dunn.
The announcement comes after an independent investigation into the Dunn scandal found that Schulze "acted inappropriately" when he first heard about Dunn's "extremely close" relationship with a female staffer last December. Instead of informing other board members about the allegations, Schulze confronted Dunn but apparently kept the matter between the two of them.
Dunn's resignation last month was originally portrayed as a "mutual agreement that it was time for new leadership to address the challenges that face the company," but just hours later the Star Tribune reported that the company's board of directors had begun an investigation into Dunn's personal conduct.
According to a press release, Schulze will become Chairman Emeritus, an honorary position. He'll continue to serve as chairman through June 21 of this year. Hatim Tyabji, currently director of Best Buy's board, will succeed Shulze.
The same press release announcing Schulze's resignation also reveals the key findings of the investigation into Dunn's conduct. Dunn reportedly had an inappropriate relationship with a 29-year-old female staffer possibly named Dayna Cline. Here are the investigation's findings:
-- 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.
So Schulze "acted inappropriately" in not reporting Dunn's behavior to the rest of the board when it was first brought to his attention. In the release, Schultz says, "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."
Schulze's scandal-ridden departure from Best Buy's chairmanship ends a remarkable and lucrative run at the company he founded. Last year he was ranked 157th richest person in America by Forbes, with an estimated worth of $2.5 billion. He used some of his wealth to co-found the St. Thomas Law School in downtown Minneapolis, where numerous buildings bear his name.
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