Three Corporate Governance Red Flags Behind the 'Sweetheart' Consulting Deal that Got Kohl's CEO Fired
Four CEOs in three years. A multimillion-dollar deal with a girlfriend's firm. And a board that was the last to know what was considered an 'open secret.'
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Kohl’s Corporation, the large U.S. department store chain, terminated CEO Ashley Buchanan last week after an internal investigation revealed he had hired his girlfriend’s consulting firm, Boston Consulting Group (BCG), without disclosing the relationship.
Buchanan arranged a multimillion-dollar consulting deal with unusually favorable terms for BCG, directly benefiting his girlfriend and creating a significant conflict of interest. The breach was severe enough to warrant termination for cause, requiring Buchanan to forfeit equity awards and bonuses and repay part of his $2.5 million signing bonus.
Here are the three governance red flags behind the fiasco at Kohl’s:
Four CEOs in 3 years 🚩🚩🚩
Kohl's is now searching for its fourth CEO in less than three years. Since 2022, the company has had three chief executives: Michelle Gass, who left to lead Levi's; Tom Kingsbury, who served for about two years as part of a planned succession; and now Ashley Buchanan, whose tenure ended in scandal.
I've been on boards and in boardrooms where someone needed to point out that the board itself was a problem. Perpetually choosing the wrong leaders often means that the board's management of leadership talent is fundamentally broken. From proactive succession planning to identifying, selecting, persuading, and ultimately retaining the right leaders, Kohl's appears to have dropped the ball in each of these areas.
This can happen for several reasons. In my experience, common culprits include:
Overreliance on personal relationships. Many boards choose leaders they know rather than the best candidates. Familiarity can also reduce the likelihood of conducting thorough diligence, leading to surprises.
Reluctance to consider up-and-coming talent. Boards often overlook first-time CEOs, rising stars, leaders with unconventional backgrounds, or those who don't fit the typical CEO mold. For example, research suggests first-time CEOs often outperform more experienced ones in certain areas. They tend to lead longer, deliver more consistent performance, focus on top-line growth over cost-cutting, and adapt more readily to change.
Distance from day-to-day operations and culture. A disconnected board can miss key insights about the company’s realities.
Blind spots in critical areas. These may include technological illiteracy, outdated responses to emerging challenges, or a lack of understanding of capital market dynamics.
No Checks in the Procurement Process 🚩🚩🚩
Kohl's CEO directed the company to enter into a multimillion-dollar consulting agreement with Boston Consulting Group (BCG), where his romantic partner served as an advisor. The "multimillion-dollar" contract was described as "highly unusual" and included "exceptionally favorable terms for the vendor."
Having the CEO unilaterally choose the consulting firm isn't the world's greatest sin, but it feels like the way Kohl's chooses large vendors is light on process, diligence, and perspective — to say the least. Large and expensive contracts, those dealing with core strategic matters should go through an efficient yet thorough process. While no company wants to be mired in process, having one person sign off leaves the company too susceptible to self-dealing.
While it is not necessarily the board's job to manage how Kohl's picks vendors and doles out contracts, it is the board's job to ask questions that surface broken processes and undisclosed conflicts. In this case, that oversight mechanism clearly failed.
Not in on the "Open Secrets" 🚩🚩🚩
Should the board have known enough about the CEO's romantic partners to know that one of them worked with a consulting firm they'd hired? I think so.
While the relationship was not formally disclosed to Kohl's or BCG as required by corporate conflict-of-interest policies, and both companies stated they were surprised to learn of the connection during the investigation, the relationship was described as an "open secret" among colleagues at their previous employer, Walmart, and in the retail industry's circles in Bentonville, Arkansas.
The best boards are tapped into the stuff that doesn't appear in reports and forecasts. Typically, this means maintaining proximity to on-the-ground conditions: the products and services, the customer experience, the organization's cultural conditions. For a large retailer like Kohl's, that may mean the quality of the inventory, the store experience, or employee morale. But it can also mean the water cooler conversations, especially those involving senior leadership.
When a board is the last to know what many industry insiders consider common knowledge, it suggests a dangerous disconnection from the realities of the business they're supposed to govern.
Lessons for All Corporate Boards
If you’ve followed me for a long time, you know I believe every corporate scandal is a failure of corporate governance. This particular scandal at Kohl's reminds us that issues often stem from systemic weaknesses rather than isolated incidents.
Effective corporate boards must develop both formal checks and informal intelligence networks. They need processes that can't be circumvented by a single executive, combined with the cultural awareness and industry connections to detect problems before they become embarrassing PR disasters or worse.
This isn't merely about preventing scandals—it's about creating the conditions for sustainable leadership and organizational health. The retail sector, already facing existential challenges from e-commerce and changing consumer behaviors, can ill afford governance distractions like those plaguing Kohl's. For shareholders, employees, and customers alike, board effectiveness isn't an abstract concept—it's fundamental to whether companies like Kohl's can navigate their way to a viable future.
Does your board need members who can reveal blind spots, anticipate risks, tackle M&A, or engage confidently with capital markets? Let’s connect. Reach out if your board is seeking fresh, financially sophisticated leadership.
👋🏿 I’m Jamaal Glenn. I serve on boards to help organizations navigate growth, risk, and complexity with financial discipline and bold, future-focused strategy. My career spans $70 billion in capital markets and M&A transactions, venture capital leadership, and scaling technology and media businesses backed by luminaries like Eric Schmidt, Pierre Omidyar, and leading global family offices. I’ve chaired audit and finance committees and advised institutional investors deploying billions into cutting-edge sectors including AI, fintech, and digital infrastructure. As a Qualified Financial Expert, I bring not only deep capital markets and deal expertise, but also operational leadership—having built, scaled, and exited ventures, raised over $150 million from institutional investors, and helped shape the growth strategies of both startups and Fortune 500-caliber enterprises. I pair financial rigor with a governance mindset, positioning me to join—and ultimately chair—an audit committee while driving long-term value creation.