This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2017/06/13/technology/uber-travis-kalanick-holder-report.html

The article has changed 7 times. There is an RSS feed of changes available.

Version 3 Version 4
Travis Kalanick, Uber’s C.E.O., to Take Leave Amid Inquiry Into Workplace Culture Uber Embraces Major Reforms as Travis Kalanick, the C.E.O., Steps Away
(about 3 hours later)
SAN FRANCISCO — Travis Kalanick, Uber’s chief executive, said he would take a leave of absence from the ride-hailing service after an investigation into the company concluded that Uber must repudiate its aggressive start-up culture. SAN FRANCISCO — In Uber’s continuing attempt to repair its reputation over a series of scandals stemming from its bad-boy culture, its co-founder Travis Kalanick said he would take a leave of absence as chief executive. The company also announced it would embark on a sweeping reorganization to ensure that executives are more closely supervised by its board of directors.
The developments were part of a flurry of actions at Uber on Tuesday morning, which began with an internal email from Mr. Kalanick right before a staff meeting got underway. In the email to employees, Mr. Kalanick said he would take a leave of absence to work on himself and reflect on building a “world class leadership team” for the company. He did not specify how long he would be away. At a packed meeting with employees on Tuesday morning, Uber released 13 pages of recommendations compiled as part of an investigation into sexual harassment and other wrongdoing conducted by the former attorney general Eric H. Holder Jr. and his law firm, Covington & Burlington.
Minutes later, Uber released 13 pages of recommendations to change the company, which were the result of an investigation into its culture conducted by the former attorney general Eric H. Holder Jr. and his law firm, Covington & Burling. But even as Uber promised to reform itself, an exchange between board members on stage highlighted the company’s challenges. In front of employees, the board member Arianna Huffington talked about how having one female director typically leads to more women directors. David Bonderman, a fellow board member and a founding partner at the private equity firm TPG, replied that adding more women to the board would result in “more talking.”
The recommendations included limiting Mr. Kalanick’s responsibilities by reallocating some of his duties, with an increased emphasis on a chief operating officer at the company. Uber also should appoint an independent chairman and create an oversight committee on the board, in an effort to bolster the checks and balances on management, according to the recommendations. The remark left people aghast, according to those who were there, and set off a storm of criticism on Twitter.
The proposed changes amounted to a rejection of the methods and culture that Uber has used to build itself into a nearly $70 billion company that has upended the transportation status quo worldwide. Under Mr. Kalanick, Uber flouted rules and regulations to bring its ride-summoning service to hundreds of cities, prized growth above all else, and often turned a blind eye to corporate misbehavior. Mr. Bonderman later apologized to Ms. Huffington and Uber’s employees in an email. “It was inappropriate,” he said. “I deeply regret it.”
That ballooned into a crisis starting in February, when a former employee wrote a blog post detailing what she said was a history of sexual harassment and lack of response from management at the company. The post set off a deluge of complaints from staff about Uber’s culture, exposing a toxic environment. Before the meeting, Mr. Kalanick said in an email to employees that he would take time off to work on himself and reflect on building a “world-class leadership team” for the company. He did not specify how long he would be away, and he did not appear at the staff meeting.
Uber has since moved to clean up the situation. It has fired 20 employees in the last few months for transgressions including sexual harassment. Emil Michael, a top lieutenant of Mr. Kalanick’s, left the company this week. And many other executives have departed, leaving something of a leadership void at the company. Uber did not release Mr. Holder’s full report. Instead, the company highlighted the changes it would make to fix its problems. The recommendations included limiting Mr. Kalanick’s responsibilities by reallocating some of his duties, and by giving a chief operating officer more responsibilities at the company. Mr. Holder also recommended that Uber appoint an independent chairman and create an oversight committee on the board. The goal is to bolster the checks and balances on management, according to the recommendations.
The proposed changes amounted to a rejection of the practices and culture that Uber has used to build itself into a nearly $70 billion company and upend the way people use transportation worldwide. Under Mr. Kalanick, Uber flouted rules and regulations to bring its ride-summoning service to hundreds of cities, prized growth above all else, and often turned a blind eye to corporate misbehavior.
Uber’s practices ballooned into a crisis starting in February, when a former employee wrote a blog post detailing what she said was a history of sexual harassment and lack of response from the company’s management. The post set off a deluge of other complaints from staff members about Uber’s culture, exposing a toxic environment.
Uber has tried to clean up its act. It has fired 20 employees in the last few months for transgressions that included sexual harassment. Emil Michael, a top lieutenant of Mr. Kalanick’s, left the company this week. And many other executives have departed, creating something of a leadership void at the company.
On Sunday, Uber’s board met for nearly seven hours at Covington & Burling’s office in Los Angeles. Afterward, the board said it had unanimously voted to adopt all the recommendations in Mr. Holder’s report.On Sunday, Uber’s board met for nearly seven hours at Covington & Burling’s office in Los Angeles. Afterward, the board said it had unanimously voted to adopt all the recommendations in Mr. Holder’s report.
“Implementing these recommendations will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated,” Liane Hornsey, Uber’s chief of human resources, said in a statement. “While change does not happen overnight, we’re committed to rebuilding trust with our employees, riders and drivers.” “Implementing these recommendations will improve our culture, promote fairness and accountability, and establish processes and systems to ensure the mistakes of the past will not be repeated,” Liane Hornsey, Uber’s chief of human resources, said in a statement on Tuesday. “While change does not happen overnight, we’re committed to rebuilding trust with our employees, riders and drivers.”
Mr. Kalanick’s leave of absence was largely left to the chief executive to decide himself, people with knowledge of the situation have said. He has been under pressure for his aggressive management style, and had acknowledged he needed leadership help after a video of him berating an Uber driver became public. Mr. Kalanick, 40, is also grappling with a boating accident last month that left his mother dead and his father in the hospital. Mr. Kalanick’s leave will be a significant change for a company that was molded in his image. He helped found Uber in 2009 and has been its fiercest supporter. Mr. Kalanick, 40, retains a large amount of control over the company, which is privately held, because it was structured to favor its founders.
“The ultimate responsibility, for where we’ve gotten and how we’ve gotten here rests on my shoulders,” Mr. Kalanick wrote in the email to employees. “There is of course much to be proud of but there is much to improve.” The decision to take time off was largely left to Mr. Kalanick himself, people with knowledge of the situation have said. He has been under pressure for his aggressive management style, and had acknowledged he needed leadership help after a video of him berating an Uber driver became public. He is also grappling with the death of his mother in a boating accident last month that sent his father to the hospital.
The recommendations to change Uber’s culture from Mr. Holder and Covington & Burling consisted of 10 main categories aimed at creating checks and balances on Uber’s senior management, enhancing the board’s oversight and revamping the company’s internal controls. “The ultimate responsibility, for where we’ve gotten and how we’ve gotten here, rests on my shoulders,” Mr. Kalanick wrote in the email to employees. “There is of course much to be proud of but there is much to improve.”
Many of the recommendations involve putting in processes to professionalize the way that Uber is run. They included performance reviews of senior leadership to hold executives accountable, better record-keeping in human resources, reformulating the company’s cultural values, mandatory manager and human resources training, and an emphasis on diversity and inclusion. His absence raises questions of how Uber will be managed while he is away. Mr. Kalanick said in the email that the managers who directly report to him will be in charge of the company, although he added that he will remain available as needed “for the most strategic decisions.” The managers who report to him include David Richter, the senior vice president for business, and Rachel Holt, the general manager in charge of Uber’s business in the United States and Canada.
The recommendations to change Uber’s culture consisted of 10 main categories aimed at creating accountability for Uber’s senior management, enhancing the board’s oversight and revamping the company’s internal controls.
Many of the recommendations involved professionalizing the way Uber is run. Those included performance reviews of senior leadership, better record-keeping in human resources, reformulating the company’s cultural values, mandatory manager and human resources training, and an emphasis on diversity and inclusion.
“We recommend that Uber focus on four prevailing themes with regard to taking the following remedial measures: tone at the top, trust, transformation, and accountability,” the report said.“We recommend that Uber focus on four prevailing themes with regard to taking the following remedial measures: tone at the top, trust, transformation, and accountability,” the report said.
Uber presented the recommendations to employees at its regular Tuesday staff meeting at its headquarters, which attendees described as packed. A special subcommittee of Uber’s board took the stage, including Arianna Huffington, David Bonderman and J. William Gurley, with each addressing the crowd and highlighting different deficiencies discussed in the report, along with how the company would have to overcome the problems. Mr. Kalanick did not attend. Uber presented the recommendations to employees at its regular Tuesday staff meeting at its headquarters. A special subcommittee of Uber’s board took the stage, including Ms. Huffington, Mr. Bonderman and J. William Gurley, with each addressing the crowd and highlighting different deficiencies discussed in the report, along with how the company would overcome the problems.
The difficulties of changing Uber’s culture were captured during the meeting, when Mr. Bonderman told Ms. Huffington that adding more women to the company’s board would result in “more talking.” The remark left people aghast, according to attendees. “We’re in a reputational deficit, and it’s going to take us a while to get out of this,” Mr. Gurley, a venture capitalist at Benchmark, said to Uber’s employees. “We have to hold ourselves accountable to a higher bar.”
Mr. Bonderman later apologized to Ms. Huffington and Uber’s employees in an email after the meeting. “It was inappropriate,” he said. “I deeply regret it.” Ms. Huffington said that she understood how the scandals had taken a toll on Uber. “I know how hard it has been to see demoralizing stories in the press and then go home and explain them to your friends and families,” she said, adding that changes had already begun. A room at Uber called the War Room, for example, had been renamed the Peace Room, she said.
The recommendations immediately elicited a positive response from some. Mitch and Freada Kapor, who were among Uber’s early investors, said in a statement that Mr. Holder’s proposals were “both thoughtful and extensive” and that “the company deserves some room to put the plan into effect.”
Many employees, too, said they were largely happy with the detailed recommendations and report, according to current and former employees who spoke on condition of anonymity because they were not authorized to speak publicly.
But other employees said Uber executives should have listened to complaints years earlier. Susan Fowler, the former Uber engineer whose blog post sparked the firestorm over the company’s culture, suggested on Twitter on Tuesday that the recommendations were largely window dressing.
“They’ll never apologize,” Ms. Fowler said, referring to Uber. “I’ve gotten nothing but aggressive hostility from them. It’s all optics.”