Kohl’s Fired Him Fast. That Doesn’t Mean They Fixed It.
Credit where it's due: once Kohl's found out what Buchanan had done, the company moved fast. The board brought in outside counsel. The audit committee oversaw the investigation. When the evidence came back, they didn't try to negotiate a quiet exit or let Buchanan resign with a vague press release. They fired him "for cause" on April 30, 2025, the same day the board chairman confronted him with the findings (Kohl's Corporation, 2025a).
That designation matters. "For cause" terminations are rare at the CEO level because they come with real financial consequences. Buchanan lost all of his equity awards, worth $17 million. He had to pay back a portion of his $2.5 million signing bonus. His board seat was revoked. His nomination for re-election to the board was pulled (Lake, 2025). Michael Bender, the board chair, stepped in as interim CEO the same day, and the company announced it would retain an outside search firm for a permanent replacement.
The public messaging was controlled. Kohl's stressed that the termination was "unrelated to the company's performance, financial reporting, results of operations and did not involve any other company personnel" (Kohl's Corporation, 2025a). They wanted a hard line between the scandal and the business. The message to investors was: this was one person's misconduct, not a company-wide problem.
And honestly, the immediate response was solid. They investigated. They didn't cover it up. They used the strongest language available. They clawed back the money. Those are all the right moves.
But the things Kohl's hasn't addressed are what bother me.
First, how did Buchanan get through the hiring process? According to the Wall Street Journal, he had been hiding this same relationship from employers for years, at Walmart and then at Michaels (Safdar & Kapner, 2025). A more thorough background check or reference process might have caught it. Bloomberg reported that the relationship was considered an "open secret" among some former colleagues (Bloomberg, 2025). Kohl's hasn't said anything publicly about what went wrong in its vetting or what it's doing differently this time.
Second, the fallout didn't end with Buchanan. Four days after the firing, board director Christine Day resigned.
The Christine Day story is worth spending time on because it reveals something the press release didn't.
Day had been on Kohl's board since 2021. She served on the audit and compensation committees. She's a former CEO of Lululemon. She's not someone who leaves a board seat casually.
On May 5, she emailed her resignation, canceling her travel and skipping a scheduled compensation call. On May 8, Kohl's filed an 8-K with the SEC that said Day's departure "was not due to any disagreements with the company on any matter relating to the company's operations, policies or practices" (Kohl's Corporation, 2025b).
That wasn't true. And Day made sure everyone knew it.
Between May 8 and 9, Day sent a series of emails to the board that were eventually included in an amended SEC filing. She wrote that she was "continually disappointed with the level of governance process" and criticized the lack of transparency. She said that decisions were being made unilaterally, with some board members getting information that others didn't, and that real discussions "rarely occur" (Howland, 2025b).
In a draft of her resignation statement, she wrote: "All board members should have equal access to information and fully discuss risks before votes are held. All shareholders should have equal access to the same information. When mistakes are made, reflection of accountability and root causes should be rigorously examined, not smoothed over" (SEC Form 8-K/A, May 9, 2025).
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Read Fortune's coverage of the resignation emails.
Kohl's response to all of this was to say it "strongly disagrees with the assertions in Ms. Day's emails" and reduce the board from 11 to 10 members, without seeking a replacement (Kohl's Corporation, 2025b). No structural changes. No governance review. No acknowledgment that Day's concerns might have merit.
That response feels insufficient. When a board member with Day's experience and track record publicly criticizes the governance culture in an SEC filing, dismissing it without engaging with it is a problem. Day didn't just complain vaguely. She identified specific issues: selective information sharing, lack of delegation, top-down decision-making. These are exactly the kind of governance gaps that allowed someone like Buchanan to operate without oversight for as long as he did.
So here's my take. Kohl's handled the Buchanan firing well. The investigation was independent, the consequences were real, and the messaging was clear. If you graded the company purely on crisis response, it would score high.
But a crisis response is different from a structural fix. Kohl's treated this as a problem with one person. Day's resignation suggests it's a problem with the system. Until the company addresses the governance weaknesses, the vetting failures, and the board culture that Day described, the same kind of thing could happen again under a different name.
In Post 4, I'll look at what outside voices are saying about all of this, from retail analysts to governance experts.
References:
- Bloomberg. (2025, May 3). Fired Kohl's CEO said to have had history of mixing relationship with work. https://www.bloomberg.com/news/articles/2025-05-03/fired-kohl-s-ceo-said-to-have-had-history-of-mixing-relationship-with-work
- Howland, D. (2025a, May 1). Kohl's fires CEO Ashley Buchanan over conflicts of interest. Retail Dive. https://www.retaildive.com/news/kohls-ceo-ashley-buchanan-fired-conflicts-of-interest-vendor-transactions/746843/
- Howland, D. (2025b, May 13). Kohl's paperwork reveals board member left due to governing concerns, lack of transparency. Retail Dive. https://www.retaildive.com/news/kohls-christine-day-board-resignation-executive-pay/747875/
- Kohl's Corporation. (2025a, May 1). Kohl's Corporation announces CEO transition process [Press release]. https://investors.kohls.com/news/news-details/2025/Kohls-Announces-CEO-Transition-Process/default.aspx
- Kohl's Corporation. (2025b, May 8-9). Form 8-K and Form 8-K/A. U.S. Securities and Exchange Commission. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000885639
- Lake, S. (2025, May 1). Kohl's just fired its CEO after only 100 days on the job. Fortune. https://fortune.com/article/kohls-fires-ceo-ashley-buchanan-ethics-conflict-interest-unusual-vendor-relationship/
- Lake, S. (2025, May 15). A Kohl's board member resigned because she was "continually disappointed" by governance. Fortune. https://fortune.com/2025/05/15/kohls-board-member-christine-day-resigns-disappointed-by-governance-lack-of-transparency/
- Safdar, K., & Kapner, S. (2025, May 1). Kohl's CEO was fired over a relationship he hid from employers. The Wall Street Journal.
- SEC Form 8-K/A. (2025, May 9). Kohl's Corporation. Exhibit 99.5: Christine Day resignation statement draft. https://www.sec.gov/Archives/edgar/data/0000885639/000119312525116699/d917496dex995.htm
How can Kohl's make sure that this doesn't happen again with its hiring and management strategy?
ReplyDeleteGreat question Mandip. I think reinforcing their hiring screening and applying regular check ups on leadership roles would ensure that those kind of problems don't occure in the future.
DeleteI believe that firing the CEO was severe but did not resolve the issue. I feel that fairness and justice require change in structure rather than simply removing someone, because without improved background checks and board oversight, future leaders may repeat the same mistakes. In theory, a poor hiring procedure and leadership culture can result in the same situation.
ReplyDeleteYour post taught me that it's important to act quickly, but long-term answers are needed to solve ethical problems. If you don't fix the root cause, the same problem will happen again.
I really like how you framed that—removal alone doesn’t fix the system. I agree that without stronger governance, better vetting, and clearer oversight, the same issues could repeat.
DeleteYour post effectively argues your point that, although the company has taken steps to deal with the Buchanan dismissal, the problem of governance and transparency may not necessarily be solved. I also liked how you used specific details such as the “for cause” dismissal, the financial penalties, and the resignation of Christine Day to support your argument, as it lends credibility to your argument. I think your analysis of the disparity between the company’s actions and the concerns such as poor vetting and boardroom dynamics really illustrates the idea that it’s not just the actions of one individual.
ReplyDeleteDo you think the company should admit to the problems within the company, and also let the public know or will it further damage the company’s reputation?
Thank you, I appreciate that!
DeleteI think some level of transparency is important because it builds long-term trust, even if there’s short-term reputational risk. Acknowledging internal issues and showing clear steps for improvement can actually strengthen credibility.
This is very interesting that the company is sort of dismissive of some details in these instances. As you mentioned, some of these occurrences should be taken more seriously. It makes me wonder what is happening on the inside at Kohls.
ReplyDeleteThat’s a sharp observation. For sure, when companies downplay issues, it can point to the deeper internal problems that made this kind of issue possible to happen.
ReplyDelete