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Schulze didn't tell the board when he learned about former CEO Brian Dunn’s relationship with an employee.
Richard M. Schulze, the founder of Best Buy, resigned today after the company’s audit committee said he acted improperly when he learned about former CEO Brian Dunn’s relationship with an employee, the New York Times reported.
A whistle-blower alerted Schulze in December 2011 to the 51-year-old Dunn’s relationship with a 29-year-old employee, the New York Times reported.
“The growing awareness and speculation surrounding the friendship created friction and disruption in the workplace and, according to her supervisor, impeded efforts to supervise the female employee,” the committee said in a report released today, according to Bloomberg Businessweek.
Schulze talked to Dunn about the allegations, and Dunn denied that he was having a romantic affair, Bloomberg Businessweek reported.
The audit committee said Schulze acted improperly because he showed Dunn a signed, written statement from the whistle-blower, and he failed to inform the board that the allegations had come up, according to the New York Times. “Following this conversation, the chairman did not share information about the conversation, the CEO’s denial, or any of the related allegations with the audit committee, the general counsel, the head of human resources, the chief ethics officer or any other board member,” the audit committee said in its report.
Ultimately, the board learned about the relationship from a human resources executive in mid-March, according to the New York Times. Dunn resigned over the incident in April.
Schulze, who helped launch Best Buy with three employees in 1966, had known Dunn for years, Bloomberg Businessweek reported. When Dunn, who joined Best Buy as a salesman in 1985, became CEO in 2009, Schulze hailed him as a product and steward of Best Buy’s “unique culture,” according to Bloomberg Businessweek.
Director Hatim Tyabji will replace Schulze as board chairman after the annual meeting on June 21, Bloomberg Businessweek reported.
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