Dive Brief:
- Target shareholders did not approve a proposal for a policy that the company’s board chair be an independent director, according to the final votes from the retailer’s annual shareholder meeting released on Friday.
- The proposal had been prompted by Target’s decision to make former CEO Brian Cornell executive chair of the board.
- Shareholders approved the election of all 12 board nominees put forward by the mass retailer.
Dive Insight:
Target’s announcement last year that Cornell would step down from his CEO position and become Target’s executive chair brought on criticism from some experts. However, the annual meeting votes rejecting a policy change solidify the retailer’s approach to the position.
Cornell’s appointment to the role wasn’t an unusual move for the retailer, as it previously kept longtime CEO Bob Ulrich on as executive chair of the board through the end of the 2008 fiscal year.
However, Target’s more recent string of declining sales and traffic under Cornell brought on special scrutiny from some shareholders and industry analysts.
“The need for stronger independent Board leadership has been painfully clear,” investment organization The Accountability Board said in a proposal letter filed last year. “This proposal’s adoption would be a crucial step toward establishing a firewall of independent leadership that ensures the Chair is positioned to oversee management and represent shareholder interests free from executive entanglements.”
Cornell’s role on the board puts him in close proximity to his successor as CEO, Target veteran Michael Fiddelke.
“You have to ask, well, what is he going to be able to decide with the executive chair in the room where you don’t want to step on toes, the person who got you this job is sitting across the table from you, and you might want to reverse some of the decisions that he made,” Jason Schloetzer, Georgetown Associate Professor at the McDonough School of Business, told Retail Dive in an interview when the move was announced in August.
Lead independent director of the board, Christine Leahy, previously sounded upbeat on the executive’s impact on the company.
“Under Brian, Target has become a $100+ billion company, with revenues increasing by $34 billion in 11 years,” Leahy said in a statement at the time his role transition was announced. “Target has been transformed into a true omnichannel retailer as Brian and the team pioneered the stores-as-hubs concept, developed industry-leading same-day services like Drive Up, grew digital performance and built private labels into desirable brands of their own.”
