Uber Report Calls for Board Oversight Overhaul

An Uber director leaves after sexist joke about women on boards

By Eve Tahmincioglu

Faced with statistics about how one woman on a board leads to more gender diversity, an Uber director made a crack about how it actually leads to more talking.

Uber held a company wide meeting Tuesday to announced a leave of absence for the embattled CEO Travis Kalanick and to discuss the findings of a much-anticipated report led by former Attorney General Eric Holder looking at major sexual harassment and diversity issues at the firm.

Some key recommendations from the report included appointing more independent board members and have the board oversee the company’s efforts to bolster diversity.

At the meeting, Uber board member Arianna Huffington told the audience that a new female board member was recently added, and that statistics show if there is one woman on a board there’s a higher likelihood there will be more women overall.

To that, fellow board member and billionaire businessman David Bonderman said:

“Actually what it shows is, it’s much likely there'll be more talking.”

The next day, Bonderman resigned, but gender stereotypes like this, especially when it comes to positions of leadership, will remain a major diversity derailer at Uber and beyond.

"For the board room, much of Uber’s problems stem from a culture that implicitly permitted sexual harassment," says Bill Treasurer, chief encouragement officer at Giant Leap Consulting and author of A Leadership Kick in the Ass. “Aggressively hiring more women in senior level roles, and adding women board members, will be an important step way from the ‘good old boy’ culture.”

It may be “a new boardroom reality,” says Melanie Grant, a leadership & corporate governance expert with Escalatus LLC, about the Bonderman comment.

“When directors make the decision to intentionally bring in other perspectives to the boardroom, active dialogue will increase which is a positive for informed decision-making, she explains.  “Boards are asked not only to decide whether or not management should follow a particular course of action but also to consider ‘how’ those actions are implemented to advance the mission and culture of the organization.”

Some are hopeful given the public attention given to the issue.

“The very fact that all this is coming out is a sign of progress,” maintains Karissa Thacker, a management psychologist and president of Strategic Performance Solutions Inc., a management training and consulting firm.  

“Uber is not alone,” she continues. “However, the decision to conduct an outside investigation and actually implement the suggestions is a huge sign of progress. Forced or not, leadership can choose to make this moment an opportunity for transformation to a better company in terms of values and overall performance.” 

Here’s the section from Holder’s report that focuses on Uber’s governance:

A. Enhance the Independence of the Board. The Board should be restructured to include additional independent Board seats. These additional Board members should be directors with meaningful experience on other boards who can exercise independent oversight of Uber’s management.

B. Install an Independent Chairperson of the Board. The Board should consider the appointment of an independent Chairperson. The use of an independent Chairperson is viewed by many governance experts as a best practice, particularly where there is a desire to enhance the level of Board oversight. An independent Chairperson could address several of these recommendations, particularly the need to serve as an independent check on Uber’s management and the need to demonstrate to Uber’s employees, partners, and customers that the Board is taking the investigation and the need for governance reform seriously.

C. Create an Oversight Committee. The Board should create an Oversight Committee. For example, the Board could create an Ethics and Culture Committee or a similar body. A committee of this nature could be organized as a standing committee of the Board, the purpose of which is to oversee Uber’s efforts and enhance a culture of ethical business practices, diversity, and inclusion within the organization. The activities of the committee could involve meeting with senior members of management who are responsible for ethics, Compliance, Human Resources, and risk. This committee could establish and monitor metrics that are intended to measure compliance with Uber’s business values, and the promotion of an ethical and inclusive environment. Alternatively, this committee could focus solely on Uber’s remediation of recent issues.

D. Use Compensation to Hold Senior Leaders Accountable. The Board should consider incorporating ethical business practices, diversity and inclusion, and other values from Uber’s Business Code of Conduct into its executive compensation program. Experience shows that compensation provides a powerful tool for creating incentives for behavior, and reinforcing a company’s values. Many leading companies have incorporated similar metrics into the compensation packages for senior executives as a way of ensuring that their compensation practices reward conduct that is consistent with the cultural environment that they hope to create. Key members of senior management could be subjected to a probation period during which they must achieve certain minimum levels of performance in order to retain their compensation awards or to continue employment with Uber.