Best Buy Shareholders Should Fire Board of Directors

NEW YORK ( TheStreet) -- Sports fans spew discontent in many directions -- players, coaches, owners. I have even heard a few blame the media or an apathetic fan base for their team's problems.

Investors have a habit of focusing on the CEO when things go wrong. That's often the correct move. Rarely, however, do you hear investors calling for the board of directors' collective head. It should probably happen more often.

I have questioned Bill Gates's sanity for not doing anything about the circus Steve Ballmer runs at Microsoft ( MSFT). Inversely, Yahoo!'s ( YHOO) board deserves chest bumps for making the bold move and naming Marissa Mayer CEO.

I touch on these situations in many previous articles, including Monday's CEOs Who Will Get Fired In 2013. If you're reading this before 10:20 a.m. Eastern time, Tuesday, you can see me discuss that story on CNBC's Squawk On The Street. After the fact, check my Twitter feed (@rocco_thestreet) for the link.

In that article, I call for Best Buy ( BBY) CEO Hubert Joly to lose his gig after just a few months on the job.

A reporter from The Minneapolis-St. Paul Business Journal tweeted that I was being a bit harsh. I asked why. Before observing that I didn't include JCPenney ( JCP) CEO Ron Johnson on my list ( get with program man!), he hit the nail on the head regarding Joly: "Overall, more of an indictment of original hire than his performance so far?"

Right on.

Don't get me wrong, his performance has been bad. He hasn't done anything. One look at and listen to Best Buy's recent Analyst and Investor Day makes it painfully obvious: The company could have -- and probably should have -- hired a consultant to do what Joly is doing.

The dude came in and conducted what amounts to a SWOT analysis. Then he recites the results -- in wholly uninspiring fashion -- from the stage in New York City. I'm headed to TheStreet this week for some meetings; I will tell you this right now. If I perform as poorly as Joly did that day for Best Buy, I would ask to be terminated. You have got to come to play or don't bother coming at all.

But, criticism of Joly only goes so far. He has no business as CEO of a dying retailer in need of wholesale, visionary transformation. That said, I can't blame him for taking the gig. It's a sweet deal (you can see details at the SEC Website). More power to Joly.

But less power to the Best Buy board of directors for making this move in the first place. They not only hired Joly, they waited a month for the guy's visa to clear before he could start. They waited for Hubert Joly ... seriously.

The board, with the assistance of the same search firm that helped Yahoo! nail Mayer, hired Joly. Joly reports to this board. It's their fault, not his, that he's failing.

Investors need to go after the Best Buy board. In a perfect world that makes sense, but it doesn't work that way.

Unless a major shareholder -- a big fund, a Carl Ichan, a Warren Buffett -- makes a move, there's not much investors, particularly at the retail level, can do to rattle an inept board of directors' cage.

While it's often the guy who loses his butt on 100 or 1,000 shares that gets hurt the most, these people have no recourse. Thousands of disparate shareholders, each with a few shares here or there, can't possibly band together to send the message and incite change within a company the size of Best Buy. Founder Richard Schulze is having a hard enough time and he's actually got some clout.

All you can do is write off up to $3,000 of your loss on your taxes each April.

In a perfect world, shareholders could band together -- like voters are able to do, theoretically, in American politics -- and oust a board for driving a hurting company further into the ground. But this world's not perfect. Joly and the board that hired him keep getting richer, while the rank-and-file BBY shareholder suffers.

--Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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