Amid ongoing challenges, shareholder group wants a more independent board at UnitedHealth Group

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.”

The proposal notes that UnitedHealth Group was hit by a huge cybersecurity lapse in 2024, a criminal probe disclosed this summer that apparently involves the company’s Medicare business and an extreme stock price plunge earlier this year.

“UnitedHealth is suffering one major setback and scandal after the next, and we think the board needs more — not less — independent oversight," Prescott said.

The activist investor did not disclose the size of its holdings in UnitedHealth. The group is not listed among the 100 largest investors in UnitedHealth Group.

The Accountability Board filed a proposal earlier this week with Minneapolis-based Target saying it doesn’t want Brian Cornell to retain his board chair status when Michael Fiddelke takes over as the company’s CEO. The group also wants the Target board to permanently reshape how the retailer governs its boardroom leadership.

The Accountability Board invests in 100 of the largest publicly-traded companies and pushes for transparency and policy compliance as well as reforms to corporate governance. The group hasn’t previously targeted UnitedHealth Group, although the company periodically receives shareholder proposals.

Earlier this year, UnitedHealth Group avoided shareholder resolutions asking the company to audit how often it denies paying for members’ health care. The proposals followed an outpouring of public anger on the subject after the fatal ambush in New York City of company executive Brian Thompson.

The shareholder request for an independent board chair at UnitedHealth would be considered by investors at next year’s annual meeting, which hasn’t been scheduled but typically is held in June.

The proposal doesn’t specifically mention Hemsley, but notes “a single person” now holds both board chair and CEO roles. This is “as far as it gets from the independent oversight shareholders so critically need,” according to the Accountability Board’s proposal.