Best Buy’s directors want shareholders to reject a proposal...

21 at its Richfield, Minn., headquarters. Under Best Buy’s current “classified” structure, board members serve staggered terms and only some stand for re-election at each annual meeting. The declassification proposal was submitted by the Florida State Board of Administration, an investment manager for the Florida Retirement System, which owns about 2/10 of one percent of Best Buy shares, the proxy said. “Having directors stand for elections annually makes directors more accountable to shareholders, and could thereby contribute to improving performance and increasing firm value,” says the proposal, as quoted in the proxy. “Over the past decade, many S&P 500 companies have declassified their board of directors” because there’s “evidence in academic studies that classified boards could be associated with lower firm valuation and/or worse corporate decision-making,” it says. But Best Buy’s board disagrees, the proxy said. Best Buy’s classified board structure has “served the shareholders very well” since the company went public many years ago, it said, and it remains “in the best interests of Best Buy and our shareholders.” The proposal “cites studies which link classified boards with lower firm valuation and/or inferior corporate decision-making as an argument to change our current board structure,” it said. “Our company has demonstrated both superior performance and high business ethics including strong corporate governance practices."