Source cites CEO-employee relationship
BY CAROL HYMOWITZ & CHRIS BURRITT Bloomberg News
Friday, April 13, 2012
4/13/12 at 6:06 AM
Best Buy's investigation of former CEO Brian Dunn's personal conduct centers around an inappropriate relationship with a female employee, according to a person familiar with the matter.
People close to Best Buy Co. were concerned that Dunn's behavior was threatening the company, said the person, who asked not to be named because the matter is private.
The Star Tribune in Minneapolis reported on the nature of the investigation earlier, citing a person familiar with the situation.
Richfield, Minn.-based Best Buy announced Dunn's resignation earlier this week, saying the change was part of a "mutual agreement" that new leadership was needed. The electronics retail chain later said that a board of directors committee was investigating Dunn's "personal conduct, unrelated to the company's operations or financial control."
The investigation is continuing and Best Buy has no additional comment, Ron Hutcheson, a Best Buy spokesman who works for Hill & Knowlton Strategies in Washington, D.C., said Thursday in an emailed statement.
"The board's findings will be made public and appropriate action will be taken if warranted," Hutcheson said.
Dunn didn't immediately reply to a message left for him Thursday at company headquarters.
Shares of Best Buy rose 1.3 percent to $22.24 at the close in New York. They have fallen 4.8 percent this year.
Dunn's resignation has hurt employee morale and makes the company's turnaround more difficult, former Best Buy CEO Brad Anderson said.
"When that happens at the top, it shakes the whole organization," Anderson said Thursday in a telephone interview. "To really do great work, people have to believe in what they are doing and be inspired. You've got to establish and sustain a trust with the people who are touching your customers. This is pretty devastating to that."
Best Buy probably will look outside of the organization for its new CEO after the loss of sales to Amazon.com Inc. and Apple Inc. requires Best Buy to figure out how to survive, Anderson said.
U.S. online sales reached $202 billion last year and may climb 62 percent to $327 billion in 2016, according to Forrester Research Inc. in Cambridge, Mass. At that level, online commerce would account for 9 percent of total retail sales, up from 7 percent in 2011.
"You adapt to where the customer is going," Anderson said. "They've got to find a CEO with the enthusiasm for that kind of change and vision."
Anderson said he groomed Dunn to succeed him when he retired in 2009, making his departure a "sad story."
Brian Dunn: He resigned this week as CEO of Best Buy and is under investigation