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Chief Executive At Uber Resigns. Consultant Recommended Many Changes

Uber logo Travis Kalanick, the chief executive at Uber, resigned on Tuesday. Mr. Kalanick’s departure occurred after pressure from the ride-sharing company's investors. The New York Times reported:

"Earlier on Tuesday, five of Uber’s major investors demanded that the chief executive resign immediately. The investors included one of Uber’s biggest shareholders, the venture capital firm Benchmark, which has one of its partners, Bill Gurley, on Uber’s board. The investors made their demand for Mr. Kalanick to step down in a letter delivered to the chief executive while he was in Chicago, said the people with knowledge of the situation.

In the letter, titled “Moving Uber Forward” and obtained by The New York Times, the investors wrote to Mr. Kalanick that he must immediately leave and that the company needed a change in leadership. Mr. Kalanick, 40, consulted with at least one Uber board member, and after long discussions with some of the investors, he agreed to step down. He will remain on Uber’s board of directors."

Uber has been in the news recently for a variety of reasons. During February and March of this year, there were several executive changes, and an investigative report about "Greyball," a worldwide program to thwart code enforcement inspections by local governments. In April, a class-action lawsuit claimed that Uber manipulated its mobile app to simultaneously short-change drivers and over-charge riders.

After a February, 2017 blog post by a former engineer described her workplace experiences, the company engaged Eric Holder and Tammy Albarrán, partners at the law firm Covington & Burling LLP (Covington), to conduct a thorough and objective review of the workplace issues raised by Susan Fowler in her blog post. On March 1, 2017, Uber’s Board of Directors approved the establishment of a Special Committee of the Board to oversee that review, which included the evaluation of:

"... three issues: (1) Uber’s workplace environment as it related to the allegations of discrimination, harassment, and retaliation in Ms. Fowler’s post; (2) whether the company’s policies and practices were sufficient to prevent and properly address discrimination, harassment, and retaliation in the workplace; and (3) what steps Uber could take to ensure that its commitment to a diverse and inclusive workplace was reflected not only in the company’s policies but made real in the experiences of each of Uber’s employees."

These evaluation objectives and recommendations from Covington are available online in Uber's website. Uber's board adopted all of Covington's recommendations, which cover ten areas including senior management, internal controls, training, human resources, diversity, and more. Below is an outline from the detailed, 13 page recommendations document by Covington (Adobe PDF):

"1. Changes to Senior Leadership:
a) Review and Reallocate the Responsibilities of Travis Kalanick,
b) Use the Chief Operating Officer Search to Identify Candidates Who Can Help Address These Recommendations,
c) Use Performance Reviews to Hold Senior Leaders Accountable,
d) Increase the Profile of Uber’s Head of Diversity and the Efforts of His Organization,
e) Employment Actions

2. Enhance Board Oversight:
a) Enhance the Independence of the Board,
b) Install an Independent Chairperson of the Board,
c) Create an Oversight Committee,
d) Use Compensation to Hold Senior Leaders Accountable,
e) Nominate a Senior Executive Team Member to Oversee Implementation of any Recommendations

3. Internal Controls:
a) Implement Enhancements to the Audit Committee,
b) Implement Enhancements to Uber’s Internal Controls,
c) Human Resources Record-Keeping,
d) Track Agreements with Employees

4. Reformulate Uber’s 14 Cultural Values

5. Training:
a) Mandatory Leadership Training For Key Senior Management/Senior Executive Team Members,
b) Mandatory Human Resources Training,
c) Mandatory Manager Training,
d) Interview Training

6. Improvements to Human Resources and the Complaint Process:
a) An “Owner” of Resources-Related Policies Should be Identified or Hired,
b) Increase Management Support for Human Resources,
c) Provide a Robust and Effective Complaint Process,
d) Establish Protocols with Respect to Escalating Complaints,
e) Devote Adequate Staff and Resources to Human Resources

7. Diversity and Inclusion Enhancements:
a) Establish an Employee Diversity Advisory Board,
b) Regularly Publish Diversity Statistics,
c) Target Diverse Sources of Talent,
d) Utilize Blind Resume Review,
e) Adopt a Version of the “Rooney Rule,”
f) Adopt and Promote a Sponsorship Program,
g) Recognize and Support Employee Diversity Efforts,
h) Recognize Managers for their Diversity Efforts,
i) Review Benefits Offerings
j) Unconscious Bias Review,
k) Coordinate Efforts,
l) Solicit Feedback from Employees

8. Changes in Employee Policies and Practices:
a) EEO Policies,
b) Prohibit Romantic or Intimate Relationships Between Individuals in a Reporting Relationship,
c) Institute and Enforce Clear Guidelines on Alcohol Consumption and the Use of Controlled Substances,
d) Remove Transfer Barriers,
e) Modify Uber’s Performance Review Process,
f) Make Promotion Requirements Clearer,
g) Flexible Work,
h) Catered Dinner,
i) Even Application of Policies and Practices

9. Address Employee Retention

10. Review and Assess Uber’s Pay Practices"

The recommendations seem to cover all areas of the company and its operations. Uber and its board will be judged based upon how well they implement the recommendations. What are your opinions of Uber? The recommendations?


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