An alleged relationship involving a CEO and a female employee has proven costly for Best Buy Co., according to a March 15, 2012 Wall Street Journal article.
Already fighting its way through a difficult economic climate, the company now has vacant chairman and CEO positions as the aftermath of a four month internal study.
In addition to the $6.64 million the outgoing CEO will receive, Best Buy invested four months of time in a report based on 45 interviews of nearly three dozen people, along with review of volumes of phone and email records.
The study, says the Wall Street Journal, turned up 224 phone contacts for the CEO and the female employee.
While the stock market reaction to the Chairman and founder’s resignation was positive, with the stock rising 1.5 percent on the first trading day, that tick in value seems more than offset by the management time expended on the issue, the cost of the CEO’s severance package, and whatever Best Buy invests in consulting and marketing services aimed at restoration of lost respect.
Suppose Best Buy had been able to know about the 224 phone contacts before they numbered in the 50s and 100s. Suppose Best Buy had known about the issue before the alleged relationship became a problem. (posted May 17, 2012)