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The Dilemma – When Your CEO Breaks the Rules He’s Supposed to Enforce




Kohl's had a problem. Sales were tanking. Stores were closing. The company had burned through three CEOs in under three years. So in January 2025, the board went out and hired Ashley Buchanan. He was a person with senior experience at Walmart and a CEO stint at Michaels, and handed him a compensation package worth $20.9 million. More than double what his predecessor made.

His job was to fix things. He lasted about 100 days.

The three central figures in the Kohl's scandal.


On April 30, 2025, Kohl's fired Buchanan "for cause." That's a loaded phrase in corporate America that means the company found serious enough misconduct to justify stripping an executive of their golden parachute. It doesn't happen often at the CEO level, and when it does, it makes noise.

So what did he do?

An outside investigation found that Buchanan had directed Kohl's to enter into vendor deals with someone he was romantically involved with and never told anyone about the relationship (Kohl's Corporation, 2025). Specifically, he pushed through a deal to sell products from Incredibrew, a coffee brand founded by Chandra Holt, on terms the SEC filing described as "highly unusual" and "favorable to the vendor" (Kohl's Corporation SEC Filing, April 30, 2025). He also arranged a separate multimillion-dollar consulting contract with Boston Consulting Group, where Holt happened to be working as an adviser (Griffith, 2025).

The two had been together since around 2015, when they were both at Walmart. Buchanan never disclosed the relationship at Walmart, at Michaels, or at Kohl's, despite all three companies having conflict-of-interest policies that required it (Farient Advisors, 2025).

A Kohl's employee actually caught it. During routine vendor vetting, someone on the team noticed the deal terms didn't look right and raised a flag. The board's audit committee brought in outside lawyers. When board chairman Michael Bender and the attorney confronted Buchanan with the findings on April 30, he admitted the relationship. He was fired that day. Boston Consulting Group terminated Holt's contract the same afternoon (Buchanan, 2025).

The financial fallout was immediate. Buchanan forfeited $17 million in stock awards, had to pay back roughly $2.5 million of his signing bonus, lost his board seat, and had his nomination for re-election pulled (Lake, 2025). His total package had been more than double that of his predecessor Tom Kingsbury, who made about $9 million.

And here's the part that surprised Wall Street: the stock went up.

Kohl's shares jumped as much as 8% on the day of the announcement (Meyersohn, 2025). Investors read the firing as a positive signal. The board was willing to enforce its own ethics standards, even when it meant blowing up its own leadership plan. But long-term, the stock kept falling. The company's deeper problems (declining revenue, store closures, competition from Amazon and Walmart) were still there. Getting rid of a bad CEO doesn't fix a broken business model.


To put the financial context in perspective: Kohl's had already posted a 9.4% drop in Q4 net sales and a 74% collapse in net income. They'd closed 27 stores across 15 states. The company cut its dividend. Fitch downgraded them and flagged "ongoing operational challenges." Revenue had fallen from $19.2 billion in FY 2019 to $15.5 billion in FY 2024, a decline the company hasn't been able to reverse (Howland, 2025).

Kohl's was already in financial trouble before the scandal broke.

This is a case about conflicts of interest, but it's also about something bigger. Kohl's has a code of ethics. It's on their website. It says executives should "Act with Integrity." Buchanan didn't just break a policy. He broke the one that the company says defines them. And he did it knowingly, across three employers, for nearly a decade.

That gap between what a company says it values and what its leaders actually do is what I'm going to dig into over the next four posts. In Post 2, I'll look at Kohl's as a company: their mission, values, and the image they've built. In Posts 3 through 5, I'll get into how they handled the fallout, what analysts think, and which ethical framework I think should guide what happens next.

REFERENCES:

  1. Buchanan, A. (2025). In Wikipedia. https://en.wikipedia.org/wiki/Ashley_Buchanan
  2. Farient Advisors. (2025, May 30). Kohl's caught in controversy: Rapid exits of CEO, board member. https://farient.com/2025/05/30/kohls-controversy-board-member-ceo-exit/
  3. Griffith, J. (2025, May 2). Kohl's CEO fired for steering business to a person with whom he had a relationship, retailer says. NBC News. https://www.nbcnews.com/news/us-news/kohls-ceo-fired-steering-business-person-relationship-retailer-says-rcna204441
  4. Howland, D. (2025, 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/
  5. Kohl's Corporation. (2025, 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
  6. Romero, D. (2025, May 1). Kohl’s stock rises after CEO ousted for inappropriate vendor relationships. Yahoo Finance. https://finance.yahoo.com/news/kohls-stock-rises-after-ceo-ousted-for-inappropriate-vendor-relationships-150721761.html
  7. Kohl's Corporation. (2025, April 30). Form 8-K. U.S. Securities and Exchange Commission.
  8. 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/
  9. Meyersohn, N. (2025, May 2). Kohl's just fired its brand new CEO for unethical behavior. CNN Business. https://www.cnn.com/2025/05/01/business/kohls-ceo-change
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Comments

  1. Mandip RaiMarch 25, 2026 at 7:46 PM

    The post clearly shows that the issue is unethical leadership, not company success, because the CEO established a conflict of interest, rendering judgments unfair. It relates to duty based ethics since he failed to obey corporate regulations and when leaders disregard rules, it undermines faith in the entire organization.

    I learnt that ethics is critical at the leadership level, particularly for CEOs, since when a leader breaks the rules, it can undermine trust throughout the company.

    I have a question regarding the post, Should leaders face stricter punishments than employees when they violate ethical rules?

    ReplyDelete
    Replies
    1. Amina AMarch 26, 2026 at 12:37 PM

      Thanks, Mandip. You're right that this maps cleanly onto duty-based ethics. He had a specific obligation and broke it. But punishment alone won't fix this. Buchanan hid this relationship across three companies. That's not a compliance gap, it's a character gap. Better consequences help. Hiring leaders with actual integrity matters more.

      Delete
  2. A GRGMarch 25, 2026 at 9:58 PM

    The Dilemma
    Your post is excellent, especially in the way you provided detailed evidence and structure in explaining the ethical situation with the new CEO and his personal relationship and failure to disclose this information. I liked the way you structured your writing with the use of numbers and facts that made the situation easy to understand. You have effectively demonstrated how this situation is not just a personal situation but also a major situation of transparency and violation of the company policy, especially at a difficult time for the company.

    Do you think situations like this can be fully prevented through stricter policies and oversight, or does it ultimately come down to the personal ethics and accountability of top executives?

    ReplyDelete
    Replies
    1. Amina AMarch 26, 2026 at 12:40 PM

      Thanks for the kind words. To your question: I don't think stricter policies alone can prevent this. Kohl's already had a conflict of interest policy. Buchanan just ignored it, and did the same thing at Walmart and Michaels before that.
      So I'd say it's both, but if I had to weigh them, personal ethics matters more. You can build the best guardrails in the world, but someone determined to get around them will find a way. The harder, slower work is making sure the people at the top are worth trusting in the first place.

      Delete
  3. Amina AMarch 26, 2026 at 12:39 PM

    This comment has been removed by the author.

    ReplyDelete
  4. Gabriel MundyMarch 26, 2026 at 9:34 PM

    This post does an incredible job of efficiently explaining the issues present within the Kohls company. I have not heard of this news at all so this is quite the surprising situation. Do you know why Kohls was already in trouble before Buchanan? And do you think things would have still gone further downhill for the company if it was somebody else in that leadership role?

    ReplyDelete
    Replies
    1. Amina AMarch 27, 2026 at 10:11 AM

      Thank you, I really appreciate that! Well, as mentioned in the post, sales were declining, there was increased competition from companies like Amazon, and there were brand identity problems. If someone else were in Buchman's place, sales could still be declining, but his actions definitely accelerated the loss of trust.

      Delete

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