We have a new entry in the CEO-fired-for-an-undisclosed-relationship sweepstakes. In this case, the paramours didn’t toil for the same company. Rather, the newly installed (now canned) CEO is accused of steering business to the other party. People are asking if the firm did enough due diligence in hiring the new boss. We reluctantly conclude it didn’t.

The company in question is department-store chain Kohl’s, based in Menomonee Falls, Wisconsin. On May 1, it announced it had fired Ashley Buchanan, installed as CEO in January, after an investigation by outside counsel found he “violated company policies by directing the company to engage in vendor transactions that involved undisclosed conflicts of interest.” The firing “did not involve any other company personnel,” Kohl’s said.

That was it as far as revelations in the public statement go. The company’s filing with the U.S. Securities and Exchange Commission went a little further. It said Buchanan directed Kohl’s to “conduct business with a vendor founded by an individual with whom Mr. Buchanan has a personal relationship on highly unusual terms favorable to the vendor.” He also “caused the company to enter into a multimillion-dollar consulting agreement wherein the same individual was a part of the consulting team.”

The SEC filing went on to say that “in neither case did Mr. Buchanan disclose this relationship as required under company’s Code of Ethics.”

Sam’s Club

It was left to enterprising scribblers to dig out the details. Both Bloomberg and The Wall Street Journal, for example, relying on unnamed sources, reported that the other individual is Chandra Holt, with whom Buchanan worked at Walmart and its Sam’s Club division and with whom he had (or has) a romantic relationship, as revealed in his divorce case going back to 2020.

Holt has since launched a company called Incredibrew, which sells vitamin-infused coffee. Incredibrew was the vendor Kohl’s mentioned in the SEC filing. She also was a senior advisor at Boston Consulting Group, which had the multimillion-dollar contract with Kohl’s.

Bloomberg raised the issue succinctly: “The decision to part with Buchanan — made only months after his arrival — raised questions about what the company knew, or should have known, about a relationship that had long blurred the lines between personal and professional.”

According to news reports, that relationship was an open secret among colleagues, some of whom said Buchanan gave Holt preferential treatment at Walmart. RetailWire quotes consultant Brittain Ladd saying he had warned Kohl’s about Buchanan’s alleged laxed ethics, including at art retailer Michaels, which he left to take the Kohl’s gig. RetailWire links to a negative blog post Ladd wrote about Buchanan in 2023.

Executive Vetting

Kohl’s said that in hiring Buchanan it did the typical executive vetting, including using an investigative firm, but that process didn’t turn up behavior that would be considered a violation of company policy. It said the policy no-nos turned up during the vendor onboarding (apparently a reference to Incredibrew or Boston Consulting).

The whole episode shows the difficulty of doing the due diligence to avoid a crisis. What can we say? Kohl’s undertook the standard procedures but they weren’t enough or they weren’t executed well enough. Lesson learned?

Boston Consulting announced that, because Holt didn’t disclose her relationship with Buchanan, it terminated its contract with her. “BCG was shocked to learn of the relationship between Chandra Holt and Ashley Buchanan,” it said.

Photo Credit: Kohl’s

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