Best Buy Probing Ex-CEO Brian Dunn's Alleged Relationship With Subordinate

MINNEAPOLIS -- Best Buy Co.'s board is investigating whether its former CEO, Brian Dunn, misused company funds while carrying out a relationship with a female subordinate, reports said Thursday.

The Star Tribune in Minneapolis and The Wall Street Journal attributed their reports to people familiar with the matter. The sources were not named in the reports.

Dunn resigned abruptly Monday. The company announced the resignation Tuesday, saying it had launched an investigation into Dunn's "personal conduct" that was unrelated to its "operations or financial controls."

Dunn was a 28-year company veteran who had been head of Best Buy, the nation's largest consumer electronics chain, since 2009.

Ron Hutcheson, a spokesman for Best Buy's board, said Thursday the investigation is ongoing and said the board's findings will be made public and "appropriate action will be taken if warranted."

Hutcheson declined to comment on the details in the reports Thursday. He only said Washington, D.C.-based law firm WilmerHale is working with the board's audit investigation committee on the matter.

According to the Journal, the 29-year-old woman who was allegedly involved with Dunn worked in a leadership-training institute at the company's Richfield, Minn., headquarters. The paper said it could not be learned whether she still worked there. The newspaper didn't reveal her name.

The Star Tribune reported that the company is investigating multiple complaints of Dunn behaving inappropriately with a female subordinate.

The cloud surrounding the resignation adds to Best Buy's problems. Up until a few years ago, it was the place Americans went to buy TVs and cameras. But the chain suffered in the economic downturn and has been widely criticized for not being quick to respond to growing competition and the changing shopping habits of Americans.

The company said Thursday that it had created a search committee to find Dunn's replacement.

It said the committee will run a global search that will look at internal and external candidates. Interim CEO Mike Mikan will be among those considered for the job. Mikan formerly served as executive vice president and chief financial officer of UnitedHealth Group Inc. and chief executive officer of Optum, a health care services company affiliated with UnitedHealth.

The search could take up to nine months, Best Buy said.

Its shares ended Thursday up 28 cents at $22.24. They have lost 27 percent in last year and more than half of their value since April 2006.

Best Buy's declining value makes it among companies where employees are losing hope. Check out some other struggling companies below:

Comments

[rrshere]

08:29 PM on 04/23/2012

If it were Dianne in Wooster, Ma............I'd really be postal

[gjackson]

04:24 PM on 04/13/2012

another employer with benefits

[Sonzy]

04:21 PM on 04/13/2012

Sorry fellows! I'd been reading "Jefferson" lately. Got carried away.

[Capn Scott]

04:20 PM on 04/13/2012

There's nothing wrong with Best Buy, other than sometimes they're not. Great place to go and look at hardware, though.
After Best Buy follows CircuitCity, what large electronics retailer is left?

[WorldGoneWild]

04:27 PM on 04/13/2012

A new one in my area is kicking Best Buys butt...HHGregg.

[Thegta Headmaster]

04:17 PM on 04/13/2012

After being married for so long, Dunn wanted to make his personal life the same as what he was trying to do to his company. He wanted to go from a Big Box to a a nice tight smaller one.

[GraniteSkyline]

04:10 PM on 04/13/2012

What do you expect from a guy still sporting a 70s p0rn 'stache?

[ydnas639]

04:28 PM on 04/13/2012

Stache? Nah. It's that caterpillar that Reince Priebus has been going on about.

[GraniteSkyline]

09:33 PM on 04/13/2012

Hello! I hope all is well with you!

[GraniteSkyline]

09:35 PM on 04/13/2012

You're right. Its more of a dork-stache.

[Jen Celli]

02:27 PM on 04/13/2012

Well it was obvious that there was an issue with conduct; but they said they needed and investigative team to audit, so the message was inconsistent. Which really meant, the whole mess would come out sooner or later to clear up the muddled mess of their original statement. Why not just say he was banging a subordinate and there may have been funds used improperly and let it die out in a few days. Now if will just keep popping up until all of the sordid details are finally made public.

[WorldGoneWild]

04:32 PM on 04/13/2012

I was wondering the same thing. Why call for the board's audit investigation committee when the matter did not involve operation or finance controls? If Dunn took this young woman on company paid trips, then the internal controls did not work properly. The Best Buy spokesmen or women need to clarify this mess. I'm guessing this young woman received some extra compensation courtesy the company and approved by her CEO Sugar Daddy.

[Jen Celli]

05:00 PM on 04/13/2012

I'm with you. Now this will get dragged out and we'll have to weather this media storm as well. You'd think these guys were smarter than that. Just say what it is you're examining, what he did and let's move on.

[jivatma]

02:10 PM on 04/13/2012

having worked for best buy before, what i think is strange is how United Health Group former CEO is now the new CEO of best buy. United Health's biggest client is Best Buy... so tell me what does a old insurance CEO bring to the table of an electronics retailer?

[Jen Celli]

02:24 PM on 04/13/2012

Not sure what that's about; but I have to agree it's like apples and oranges. How does his experience transfer to a retail electronics business? I don't think it does.

[robinchicago]

03:42 PM on 04/13/2012

A Goldman Sachs banker is running Greece. (technocrat they call him) What does he know about running a country?

[GraniteSkyline]

04:11 PM on 04/13/2012

Since GS started much of Greece's problems, he's just there to finish the job and ki|| off Greece.

[Robert Montgomery]

02:03 PM on 04/13/2012

In the past I purchased a very expensive refrigerator and various stereo equipment from Best Buy, but when they bankrolled that homophobic Republican running for Governor of Minnesota my loyalty ENDED! Best Buy never apologized to the gay community. They drew a line in the sand and made a political statement. About family values I guess?

Wouldn't it be great to see the leader of this company caught in a very immoral situation. Yes, there is Karma!!! LOL

[Mulebone]

01:57 PM on 04/13/2012

I thought messing around with your secretary was one of the perks of being a big shot.

When did it become a crime?

[Thegta Headmaster]

02:17 PM on 04/13/2012

It's a problem when she's not a secretary and has a responsible position and he defends her incompetence and gets rid of people who complain about her. Also, when he uses company funds to woo her. That is a problem.

[bjbold]

01:56 PM on 04/13/2012

I completely understand what you folks are saying about internet shopping. However..... My husband & I wanted to buy a high end internet compatible big screen TV a couple of years ago. We ordered one through a very good reputable website. The first one came in with the screen shattered. It was documented correctly and returned to the shipper. The web company replaced it without any problems. The second one arrived in the same damaged condition, shattered screen. We received a quick refund.
After that, we gave up with the shipping and went to a higher end local store (not BB since they only carry lower cost simple big screens) and have had no problems.
The internet is not always the best place to shop.

[MFS001]

02:47 PM on 04/13/2012

True, but the unique problem facing Best Buy and electronic brick and mortar is that the products themselves are becoming obsolete. For example, you will no longer need DVDs and DVD players.

[Deaninphilly]

02:56 PM on 04/13/2012

The problem for BB is that they are overpriced.

[bjbold]

05:12 PM on 04/13/2012

Which is exactly why we chose to buy an interactive big screen tv. We have a complete computer system hooked up to it and can use the internet to it's full capability (from the comfort of our couch..... aarrrggggg!).
The selection of films and programs is wonderful. Ted Talks, Top Documentaries, YouTube, PBS.org, etc. etc.

[Char60]

01:55 PM on 04/13/2012

I suppose he got the best buy!

[MFS001]

01:43 PM on 04/13/2012

BTW, you knew Best Buy was going down when they bought the rights to the Napster name (to chase online business), and they thought that was a good idea, seemingly oblvious to the fact that they already had a brand name - Best Buy - which did not have the infamous history of association.

[MFS001]

01:38 PM on 04/13/2012

Best Buy has certainly been plagued by some poor - tired -- management, but the main problem is that they have an obsolete business model - both their products and their shopping experience is being replaced (online price comparisons and shopping, digital, clouds, etc.)

Go into their stores and you see them trying things like a fish out of water. I saw a Hello Kitty endcap recently in one. Bye bye Best Buy.

[Dan Stewart]

01:35 PM on 04/13/2012

He fell for a gold digger.