3 Uncomfortable Questions For Target’s New CEO

The impulsive reaction to Target’s long-overdue CEO change is — what took so long?

The bull’s-eye retailer’s well-publicized tribulations include plateaued sales since 2022 and shares down 60% from their 2021 peak. During outgoing CEO Brian Cornell’s 11-year tenure, Target stock grew a pedestrian cumulative 76%. That’s roughly 5% per year, just slightly over compounded inflation and risk-free rates. Conversely, rival Walmart and the S&P 500 delivered 313% and 231% returns, respectively, over that stretch.

Those dismal marks signal far scarier AI-era problems that newly appointed CEO and company lifer Michael Fiddelke must fix. Ultimately, his prospects hinge on a singular question — who (name names!) can and will you trust, welcome and encourage to ask the candid, uncomfortable and unvarnished questions every effective executive needs?

3 Uncomfortable Questions

Here are three specific examples of questions for Fiddelke:

1. Will you settle for the entrenched governance structure?

Courageous CEOs demand exceptional boards. Target’s 2025 proxy statement reveals many glaring digital era stewardship gaps.

The board lacks a technology committee, and the proxy mentions “cybersecurity” just nine times. “Artificial intelligence” astonishingly appears just once. On second glance, perhaps that’s not surprising. Only two independent directors, healthcare CEO Gail K. Boudreaux and former media and charitable foundation executive Monica Lozano, are tagged with “digital tools/data analytics” qualifications.

Yet, all 11 independent directors are designated “expert” in senior leadership, risk management and financial management. The adrift past decade suggests otherwise, and the current mix likely can’t offer “elite sparring partner” oversight to sharpen Fiddelke’s COO and CFO background.

No new director has joined the board since 2022. Excluding Cornell, who held the often-problematic dual title of board chair and CEO, the average age exceeds 66 years. One director, Douglas Baker, has board service that precedes Cornell’s tenure. Contrast that with Walmart whose board brings extensive, credible Silicon Valley tech experience at an average age closer to 50.

In bold print, Target touts a board term limit of 20 years and mandatory retirement at 75. For most, such latitude foretells a long stretch to go. The 2025 annual meeting resulted in a predictable full reappointment and renewal of annual director compensation of over $300,000. The entrenchment of organizational oligarchs is hardly unique to Target. Fiddelke’s courageous first step is to call for stern stewards.

2. What’s the AI strategy?

Tepid financial performance quietly curbs tech investment, deployment and yield. That’s a challenge as companies struggle to articulate, architect and execute AI strategy.

Walmart, through aggressive executive hiring, strategic focus and directed funding, has positioned itself as an AI leader, with advancements in agentic tools for customer experience, supply chain management and corporate work. Upstarts, such as Five Below, have smartly tapped artificial intelligence to gain market share and bolster competitive position.

Such clarity boosts digital transformation readiness, appeals to marketable top talent and monetizes frontiers. Fiddelke can do the same, if willing, to address glaring value chain pain points, demonstrate how AI forges strategic edge rather than curing operating metrics, protect digital strategists from noisy, operational IT concerns, and insist upon meaningful results accountability.

All contribute to a convincing business vision and clear investment thesis that internal and external stakeholders can understand and convey. Recent earnings call tussles indicate that Target is far from that position.

3. Can stakeholders expect and receive candid communication?

Compelling clarity is rare in a world of manufactured corporate double-speak. Such patter surfaced in the recent Target-Ulta partnership end.

Forbes senior contributor Pamela N. Danziger wrote, “In the announcement, the companies mutually congratulated themselves on revolutionizing how people experience beauty and their shared success. But now they’ve decided to go it alone, as they jointly assured shoppers, ‘Both companies remain committed to delivering a seamless shopping experience and product availability through the end of the partnership, as well as continuing to support their teams and partners during the transition.’”

The joint curated missive is far from the reality unearthed by analysts and employees, which raises questions about shrink, underutilized floor space and cash drain.

“Looking ahead, the breakup is likely to be a painful blow to the already embattled Target, facing declining sales, a shortfall in foot traffic and national boycotts. For Ulta, the exit should be of little consequence, even enhancing its reputation. As the saying goes, nobody wants to sit at the reject table,” Danzinger incisively concluded.

The initial companywide communications to employees and next earnings call are screaming opportunities for Fiddelke to choose clarity over synthetic. The market, workforce, suppliers and customers will be listening very closely.

Buckle Up

Bank of America Securities analyst Robert Ohmes just downgraded Target from hold to sell, prognosticating another 10-15% share drop. He cited “slowing digital sales growth” and limited “scale in digital advertising and third-party marketplace operations, areas where rivals like Amazon and Walmart have already built momentum.”

Ohmes also pointed to margin challenges arising from import exposure, estimating “50% of its cost of goods sold compared to Walmart’s 33%” and price hikes that may more than double Walmart’s 4% to 5% estimates. Those are strong headwinds for any new CEO. In response, Fiddelke should not not tolerate self-interested deputies who foster “strategy prevention” delays and retrospective blame-shifting. Otherwise, he will quickly be remembered as yet another incumbent board’s comfortable insider choice.

Alternatively, lasting revitalization will cast Fiddelke’s speedy 22-year jaunt from intern to $106 billion retailer CEO as inspirational and even Hollywood-esque.

Who’s comfortable asking?