37.7% of Target shareholders want independent chairman

Target’s annual meeting was pretty much a non-event on June 10, aside from the fact that a corporate structure in which Brian Cornell serves as both chairman and CEO doesn’t sit well with many shareholders.

Nearly 38% of the shares voted at Target’s annual meeting supported a proposal requiring the company’s chairman to be independent. The specific proposal called for the board to adopt a policy, and amend the bylaws as necessary, that would require the chair of the board of directors, whenever possible, be an independent member of the board.

“We do not have an express policy as to whether the roles of chair of the board and chief executive officer should be combined or separated,” Target asserted in its proxy statement ahead of the meeting. “Instead, the board prefers to maintain the flexibility to determine which leadership structure best serves the interests of Target based on the circumstances.”

The circumstances for Cornell are apparently the same as for his predecessor Gregg Steinhafel. He held the titles of chairman, CEO and president and also drew the ire of a large number of shareholders. In 2014 and 2013, Target shareholders voted on a proposal calling for an independent chairman.

Although defeated both years, in 2014 a total of 45.8% of shares voted for the proposal and in 2013 more than 37% of shares voted supported the idea of an independent chairman. The strong level of support in 2014, prompted Target to hire a consultant to review its leadership structure, review academic studies and contemplate separating the positions. However, a determination was made to keep the positions combined because of Cornell’s experience.

“The board’s decision to offer Mr. Cornell both the chairman and CEO positions is also expected to serve Target’s goals by allowing Mr. Cornell to coordinate the development, articulation and execution of a unified strategy at the board and management levels,” Target explained in its proxy statement. “The board has maintained its view that Target should have the flexibility to determine whether to combine or separate the roles of chair and CEO.Through our shareholder engagement meetings following Mr. Cornell’s appointment, we concluded that, although shareholders expressed different views on their preferred leadership structure, there was no prevailing theme on a preferred structure for Target Corporation.”

An awful lot of the company’s shareholders disagreed with that position.