An activist investor wants Unitedhealth Group, based in Eden Prairie, adopts a new policy and changes the regulations so that future board chairs are independent of the company.
The push is an indirect challenge for the current chairman of the board of directors Stephen Hemsley, the former CEO of the company who returned as general manager this year in the midst of unprecedented financial schemes.
In listed companies, CEOs are initiates who make daily operating decisions, while the boards of directors meet regularly to provide independent surveillance on strategic orientation, audit, remuneration of managers and other questions. At Unitedhealth, as in some other companies, the CEO and the Chairman of the Board of Directors are the same person.
The proposed policy would actually separate the roles of the CEO and the presidents. This would not apply directly to Hemsley, but he could move voluntarily as president “if a majority of shareholders expressed their support for an independent,” said Matt Prescott, president and chief executive officer of the responsibility board by email.
The group based in Massachusetts submitted its proposal on Friday. He argues that the lack of independence from Hemsley as chairman of the board of directors is preceding at an “extremely precarious moment” for Unitedhealth while the company is faced with “challenges supported both in performance and reputation”.
“Unitedhealth is undergoing a reversal and a major scandal after the next one, and we think that the Council needs more – no less – independent surveillance,” said Prescott.
Unitedhealth Group immediately responded to a request for comments on Friday.
