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The Accountability Board, an advocacy and activist investor group, filed a shareholder proposal that would prevent outgoing CEO Brian Cornell from retaining his board chair status.
The proposal, attained by RetailWire, requires Target’s board chair to be an independent director, or someone who has been a Target executive in the past three years.
The proposal comes as Target announced, in late August, plans for Michael Fiddelke, Target’s COO, to succeed Cornell as CEO in February 2026, with Cornell transitioning to “executive chairman.” Formerly leading PepsiCo, Cornell has served as Target’s chair and CEO since August 2014. Cornell can remain on the board, but can’t lead it.
The CEO change came as Target has reported 10 straight quarters of flat or declining sales due to softer demand for many of its discretionary fashion and home goods in recent years amid inflationary pressures. Target’s reputation has also been blemished with both conservatives and liberals over mishandling of DEI initiatives.
The Accountability Board said in its filing that an independent chair is a “crucial step” to ensure the board represents shareholder interests “free from executive entanglements.”
“With sustained challenges in both performance and reputation, it’s a tough time for Target — to put it mildly,” the proposal states. “Sales growth has been inconsistent, there have been declines in foot traffic, and controversies abound. As an August 2025 New York Times article observed, ‘Target’s stock has lost more than a fifth of its value over the past two years, while Walmart’s has nearly doubled in price.'”
The letter noted that Target’s stock dropped over 6% on the announcement of the CE0 change and lost another 31% over the next month as an “individual who oversaw Target’s operations during its recent struggles was promoted to CEO — with continued oversight by the previous CEO, now positioned as Executive Board Chair.”
Many investors had reportedly been seeking an external candidate to replace Cornell as CEO to enact broader changes.
Target Says it Will Consider Proposal Related to Leadership
The Accountability Board, which focuses on environmental, social, and governance issues, noted that while Target has pointed out that it has a lead independent director to counterbalance insider influence, “given the company’s ongoing underperformance (and other significant challenges), this structure clearly hasn’t proven sufficient to protect shareholder interests.”
Target responded to the proposal in a media statement, “We have received this shareholder proposal and the board will consider it in conjunction with planning for our 2026 annual shareholders meeting. We always welcome shareholder input and feedback.”
Separating CEO and chairman roles has been gaining traction. While in 2014, 47% of S&P 500 companies had separate chairs and CEOs, the share had risen to 60% by 2024, according to the latest Spencer Stuart Board Index.
Proxy advisory firms Glass Lewis and ISS have argued that companies where roles are separated tend to outperform as oversight is strengthened and conflicts of interest are reduced, but those who support CEO/chairs say the structure can streamline decision-making.
David Astorino, a senior partner at the leadership consulting firm RHR International, told the New York Times earlier this year that while he believes Target would benefit from boundaries between the duties of the executive chair and CEO, the board, “probably feels good about his strategy and not the execution of the strategy.”
In a Harvard Business Review article, Bryce Tingle, the author of “Hard Lessons in Corporate Governance” and law professor at the University of Calgary, said that with few exceptions, empirical studies have found no connection between board independence and company performance outcomes. He believes insiders often bring richer insights.
Tingle wrote, ”Inside directors have a deeper understanding of the company, its strategy, R&D opportunities, and market competitors than most independent directors will be able to manage.”