An activist investor wants Eden Prairie-based UnitedHealth Group to adopt a new policy and change bylaws so future board chairs are independent of the company.
The push is an indirect challenge to current Board Chair Stephen Hemsley, the former company CEO who returned as chief executive earlier this year amid unprecedented financial missteps.
At publicly traded companies, CEOs are insiders who make day-to-day operating decisions, while boards of directors meet regularly to provide independent oversight on strategic direction, auditing, executive compensation and other matters. At UnitedHealth, like at some other companies, the CEO and board chair are the same person.
The proposed policy would effectively separate the CEO and chair roles. It would not directly apply to Hemsley, but he might voluntarily step down as chair “if a majority of shareholders voiced their support for having an independent one,” Matt Prescott, president and CEO at the Accountability Board, said via email.
The Massachusetts-based group filed its proposal Friday. It argues that Hemsley’s lack of independence as board chair comes at an “extremely precarious time” for UnitedHealth as the company faces “sustained challenges in both performance and reputation.”
“UnitedHealth is suffering one major setback and scandal after the next, and we think the board needs more — not less — independent oversight,” Prescott said.
UnitedHealth Group did not immediately respond to a request for comment Friday.
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