Best Buy founder Richard Schulze is stepping down as the company’s Chairman of the Board after it was revealed he failed to inform the Board when he learned that CEO Brian Dunn was having an inappropriate relationship with a female employee. Dunn resigned last month.
Once again, careers are destroyed and company reputation’s harmed because key executives do dumb things—one having a relationship with a subordinate and the other for failing to report it after receiving a written statement about it, in clear violation of their company’s policy.
Best Buy acted appropriately in accepting both “resignations.” Their internal audit showed Dunn’s behavior was inappropriate and resulted in a negatively impacted work environment. Turns out this apparently consensual relationship was not a secret at Best Buy as the consenting partner spoke openly about her friendship.
As for Schulze, his 46 year career at Best Buy ends because his failure to report “exposed the employees to potential retaliation and the company to potential liability” according to the company.
While there has been no claim of sexual harassment, the potential exposure is there. All executives and managers can learn from this:
- Have clear policies and procedures outlining appropriate workplace behavior;
- Have in place policies on fraternization and sexual harassment and follow them strictly;
- Conduct annual training;
- When violations occur, take the appropriate actions, regardless of who may commit them—and never delay in taking action.
Finally, managers and executives must understand, having a relationship with a subordinate, whether consensual or not, is like playing with fire—eventually someone is going to get burned.
If you and your organization need help in addressing such problems or want to take proactive steps to prevent this from happening in your company, give me a call.