Good morning. Kohl’s needs to appoint its fourth CEO in less than three years after its chief executive was ousted due to an ethics violation linked to a compromising personal relationship.
Kohl’s board chair Michael J. Bender said of Buchanan in January: “We know he will be a great leader for Kohl’s and will bring a new perspective in our next chapter.”
Following an investigation conducted by outside counsel and overseen by the board’s audit committee, Kohl’s terminated Buchanan for cause, citing undisclosed conflicts of interest related to vendor transactions. The company stated in the announcement that his firing was unrelated to Kohl’s performance, financial reporting, or operational results.
So what will become of Buchanan’s career? I asked Shawn Cole, president and founding partner of executive search firm Cowen Partners, for his assessment, and I think it serves as a warning for anyone in a C-suite role. “His career is effectively over,” Cole told me.
“This is a major embarrassment for Kohl’s, the board and shareholders,” he said. “This situation underscores the importance of backchannel references; even minimal due diligence could have revealed any prior issues.”
It’s also an embarrassment for the search firm that recommended Buchanan, Cole said. “I’m unclear if it is the same search firm continuing the new search, but this would certainly fall under the replacement guarantee,” he said.
Bender is now serving as interim CEO. He is a former president and CEO of Eyemart Express. Bender also previously served as COO of global eCommerce at Walmart.
Kohl’s CFO, Jill Timm, has been with the company since 1999, becoming finance chief in 2019. Over the years, she has served in several finance roles, such as VP of financial planning and analysis and EVP of finance. “Timm is clearly a highly qualified CFO and has done a commendable job maintaining the business despite declining sales,” Cole said. But as for choosing the next CEO, Kohl’s board will most likely select an external candidate to address a glaring issue—a deep disconnect with customers.
“Kohl’s doesn’t have a margin or efficiency problem—it has a revenue problem,” he said. “What Kohl’s needs is a retail veteran with a background in marketing, operations, and turnarounds.” The company needs a CEO who can rebuild trust through private label revitalization and frictionless shopping experiences.
Have a good weekend. See you on Monday.
