May 15, 2012- Richard Schulze, the Chairman of Best Buy, has stepped down following an investigation that said he knew about the inappropriate relationship Brian Dunn, the former CEO of the company, had with an employee and did not report it. Schulze is the original founder of the business, but resigned after the internal probe discovered he had knowledge of Dunn’s inappropriate relationship.
The inquiry said Schulze acted inappropriately by not raising the issue with the audit committee at the company, which did not get informed until mid March. Schulze knew about the inappropriate relationship since December.
In April, Dunn resigned and will receive severance pay of close to $6.6 million and a period of non-compete for three years that was increased from just one year, said officials at the company.
The investigation found that Dunn’s relationship with a fellow employee was poor judgment and lacking in professionalism, but did not include any misuse of resources of the company.
The board of directors for Best Buy chose a new chairman on Saturday. The board replaced Schulze with Hatim Tyabji, the Chairman of the audit committee. Tyabji has been a Best Buy director since 1998 and will take the reins of the board after the company’s June 21 annual meeting.
Both Dunn and the employee denied their relationship was romantic or inappropriate.