Best Buy board says it stands by CEO following investigation

Best Buy CEO Corie Barry will keep her job following an independent investigation into whether she had an inappropriate relationship with a former colleague.

After reviewing the findings, the Richfield-based company's board said Tuesday that it stands by its leader.

"Ms. Barry fully cooperated with the review, which has now concluded," the company said in a statement. "The board supports the continued leadership of the company by Ms. Barry."

The board, which added that it takes allegations of misconduct seriously, said it would have no further comment to preserve the "confidentiality and integrity" of the process.

In December, Best Buy received an anonymous letter accusing Barry of having an affair for years with a former colleague, Karl Sanft. Sanft, who was a senior executive in the retail division, left Best Buy early last year before Barry was promoted to CEO. The board hired an outside law firm, Sidley Austin LLP, to look into the claims raised by the letter.

Sanft, who is now chief operating officer for California-based 24 Hour Fitness, told the Star Tribune in an e-mail last week that the affair did not happen.

A source familiar with the investigation said the board had no reason to believe that Sanft was lying.

According to the anonymous letter, Sanft had at one time been Barry's boss. The two then rose up through the ranks in different parts of the organization — Barry mostly in finance and Sanft in retail. The company's policy requires disclosure of close personal relationships between employees who are direct or indirect reports, according to the source.

"I appreciate the board's support and look forward to continuing to execute on our strategic vision," Barry said in a statement on Tuesday.

Barry, 44, has worked at Best Buy for more than two decades, rising quickly through the ranks and becoming an important figure in the retailer's turnaround under former CEO Hubert Joly. A Minnesota native, she was Joly's hand-picked successor and became one of the youngest CEOs to lead a Fortune 500 company and one of two dozen female CEOs among that group.

The company has continued to perform well under Barry, lengthening its streak to 11 consecutive quarters of positive sales growth in the U.S.

Carol Spieckerman, a retail consultant, said that the company's statement about Barry, without providing details, speaks volumes.

"To announce that they've done the investigation and they're going to stand by her implies the investigation found either non-incriminating or exonerating information," she said. "They're wise to move on and not give it any more energy."

Furthermore, if they had revealed details of the findings, they could have risked invading Barry's privacy and made her seem like a victim of the board, she said.

"Instead, the implication is, 'Trust us, we did the work. And whatever we found or didn't find made us confident in moving forward,' " said Spieckerman. "Any more color than that could put them in dangerous territory. I don't think the public or shareholders are owed any more information than that."

Neil Saunders, an analyst with GlobalData Retail, said this is good news for Best Buy because it means there's no disruption in leadership.

"The worst possible thing would have been having to remove a CEO they had just put in power," he said.

Now that the matter is resolved, he said, the company will want to draw a line under it and move on.

Kavita Kumar • 612-673-4113