Boston, MA 05/30/2014 (wallstreetpr) – The board of directors of Target Corporation (NYSE:TGT) has come under fire from a proxy adviser that is now recommending an overhaul of the board. Institutional Shareholder Services (ISS) has heaped blame on the board of the discount retailer for failing to protect the business from the unfortunate data breach incident that occurred late last year.
As such, ISS wants shareholders to vote out seven of the company’s 10 board members in connection with the data breach and the subsequent damage to the company’s reputation and loss of value to the shareholders. Shareholder meeting is slated for June 11.
Target Corporation (NYSE:TGT) is no longer at ease following the attack on its electronic commerce system that led to the loss of millions of credit and debit card number from shoppers. The cyber-breach also led to reputation damage for the retailer at a time when competitors are touting their impeccable electronic systems to win over shoppers in an environment where data security is as important as attractive product prices.
Target has already disengaged its CEO and Chairman Gregg Steinhafel, who took responsibility for the data breach incident. However, ISS believe that more needs to be done to restore customer and shareholder confidence in the company. According to ISS nothing can be more convincing than sending home a majority of board members that include the interim chair and lead independent director Roxanne Austin and James Johnson, respectively.
Separate CEO and chairman positions
In addition to recommending the overhaul of the board of Target Corporation (NYSE:TGT), ISS has also recommended a permanent split of the roles of CEO and board chairman. Target has been opposed to such moves in the past but it seems the recent developments that include the embarrassing data breach might lead to a change of heart.
Faltering performance
Target Corporation (NYSE:TGT) not only suffered criminal cyber attack, but also lost many business opportunities. It missed to meet its own financial goal, and even its turnaround efforts seem troubled especially looking at the rollout in Canada that has become nothing but a big headache.
