Uber Leadership Disarray Persists as it Adopts Management Reforms

NEWS ANALYSIS: An Uber board member resigns after making a demeaning comment to another member, Arianna Huffington, even as it acts to implement policies that improve corporate governance—including sexual harassment prevention.

Uber

The management disorder at Uber showed few signs of abating this week, even as the ride sharing company's board of directors decided to adopt 10 recommendations for improving corporate governance that was drafted by an investigative team lead by former U.S. Attorney General Eric Holder.

Uber board member David Bonderman resigned on June 13 reportedly after making comments demeaning to women in response to a comment by fellow board member Arianna Huffington, co-founder of the Huffington Post news website.

The board was discussing the addition of a new female board member, Wang Ling Martello, executive vice president of Nestle in South Asia. Arianna Huffington reportedly said that the presence of one woman on the board would eventually lead to more. Bonderman reportedly retorted that “actually what it shows is that it’s much more likely to be more talking.”

Earlier the same day, Uber released the 10-point list of recommendations prepared by Holder and his team with the law firm of Covington & Burling. The recommendations consist of a basic course in corporate governance, along with specifics aimed at Uber and its leadership. Those recommendations include a process for improving workplace diversity and preventing sexual harassment.

Also that same day, Uber CEO Travis Kalanick announced that he was taking a leave of absence.

In an email to employees, Kalanick said that he was taking time off to mourn his mother, who was killed in a boating accident and to consider what to do to bring about "Uber 2.0." He also said that before that, he needed to create "Travis 2.0." Kalanick said that the company would be run by his direct reports and that he would be available as needed.

However, the Holder report, which the board had already adopted, specifically identifies Kalanick as part of the problem. The first line of the report begins, “Review and Reallocate the Responsibilities of Travis Kalanick.”

The second point calls for the appointment of a chief operating officer who “will act as a full partner with the CEO, but focus on day-to-day operations, culture, and institutions within Uber.”

The recommendations also include ways to hold senior leaders accountable through the performance review process and compensation. This would include metrics on diversity, responsiveness to employee complaints, employee satisfaction and compliance. The recommendations call for a more senior role for the company’s head of diversity and head of human resources.

In addition to giving Uber’s board of directors more authority and independence, the Holder report calls for an oversight committee. But perhaps more important, recommends that Uber hold leaders accountable through their compensation through a set of metrics where meeting goals can directly affect their income.

The recommendations call for holding key members of senior management accountable for their performance and withholding all or part of their pay if they fail, even to the point of losing their jobs.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...