By BRENDAN M. CASE Staff Writer
Publshed: February 16, 2006
Reprinted with permission of The Dallas Morning News
RadioShack Corp.’s board of directors said Wednesday that it would retain independent legal counsel to investigate chief executive David Edmondson’s portrayal of his academic credentials.
The decision was announced a day after a news report questioning whether Mr. Edmondson had earned a degree from a small, unaccredited Baptist college in California.
“Counsel will be assigned to advise the board on the facts and on RadioShack’s employment policies,” the board said in a statement, issued in the late afternoon.
Mr. Edmondson acknowledged in the same statement that he had misstated his academic record.
“I clearly misstated my academic record, and the responsibility for these misstatements is mine alone,” he said.
“I apologize to the board and the employees for the confusion I have created by carrying erroneous information on my résumé and mishandling my explanation of it.”
Mr. Edmondson continued: “I love my work at RadioShack and am eager to increase shareholder value moving forward.”
It’s unclear how much time the independent counsel will need to complete the investigation, a RadioShack spokeswoman said.
Mr. Edmondson’s original corporate biography described him as having earned a degree from Pacific Coast Baptist Bible College.
That school, which later moved to Oklahoma and renamed itself Heartland Baptist Bible College, has no proof that he graduated, according to the report this week in the Fort Worth Star-Telegram.
The man who served as his academic adviser said he could not recall whether Mr. Edmondson had completed his studies.
Business experts interviewed earlier Wednesday pointed out that Mr. Edmondson’s college experience has little to do with his ability to run a public company.
After all, such business legends as Microsoft Corp.’s Bill Gates and Dell Inc.’s Michael Dell did not finish college.
But misrepresentation is another matter, said Robert J. Potter, a Las Colinas business consultant who serves as a board member at several publicly held companies.
“To be a college graduate is not a required credential” to be a CEO, he said.
“To tell the truth is a required credential.”
Personal trials
In addition to the controversy surrounding his academic credentials, Mr. Edmondson is awaiting trial in April on a charge of driving while intoxicated.
Also, Mr. Edmondson filed for divorce last week from his wife of 26 years.
But RadioShack faces challenges that go well beyond its CEO’s personal issues.
Downward trend
The Fort Worth-based company’s share price has been steadily declining in recent years.
It has fallen by 18 percent since Mr. Edmondson took over in May 2005, closing Wednesday at $21.27, down 33 cents.
RadioShack has said it will miss 2005 earnings targets.
The electronics retailer is scheduled to announce 2005 financial results on Friday, during an investor conference that starts today.
Mr. Edmondson told analysts last month that RadioShack needed to get back on track. The company recently revamped its mobile phone business, switching from Verizon Wireless to Cingular Wireless.
It’s also remodeling stores in a bid to increase foot traffic.
The business backdrop intensified concern over Mr. Edmondson’s personal problems.
‘Distractions’
“These are distractions for a company that can’t afford distractions right now,” said Greg Bustin, a Dallas business consultant.
“It creates a distraction for the board, it creates a distraction for senior management. It creates a distraction around the water cooler. What it ends up doing is causing people to take their eyes off what they need to be focused on.”
Copyright 2008 by Greg Bustin & Co., unless otherwise specified. All Rights Reserved.
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