Uber Board members unanimously adopted a new corporate culture on Sunday that was recommended by former U.S. Attorney General Eric H. Holder, Jr., including parting ways with the company’s number two executive and potentially asking its founder to take a leave of absence.
Uber’s Board of Directors held a special board meeting on Sunday, June 11 with the law firm of Covington & Burling LLP, to receive an investigative report by Holder regarding accusations that Uber senior executives ignored or encouraged inappropriate activities and sexual harassment, according to the San Jose Mercury News.
Uber is not making comments about the topics discussed at the lengthy meeting with Holder and his partner Tammy Albarrán. But Emil Michael, Uber’s senior vice president of business and number two executive to CEO Travis Kalanick, left the company on Monday morning in response to Covington’s recommendations.
Michael issued a departing email to all Uber employees, stating that the company has a great future. He reportedly added, “David is an extremely talented leader and I have high confidence in his ability to help drive the company forward,” according to the Mercury News.
Uber’s Board also added Wan Ling Martello, a Nestle SA Executive Vice President, as another female independent Board member.
Despite Uber never making a profit in eight years and currently running at about a $3 billion annual loss rate, the company has amassed a private market valuation of $62.5 billion. A big part of that value creation has been faith in the hard-charging Kalanick.
But that faith has been under attack since former Uber computer science engineer Susan Fowler wrote a devastating blog post titled “Reflecting On One Very, Very Strange Year At Uber.” Ms. Fowler stated that when she complained to Uber Human Resources that her manager openly was asking to have sex with her, HR suggested she be transferred to a lower status department because the offending manager “was a high performer (i.e. had stellar performance reviews from his superiors) and they [Uber] wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part.”
Ms. Fowler revealed that only 3 percent of Uber’s 150 engineers were women and several had told her similar stories about being sexually harassed by their managers, but receiving no help from HR. Ms. Fowler added that she left Uber after being falsely accused of poor technical performance and labeled a troublemaker for complaining.
Th firestorm that followed the article forced Uber to hire the Perkins Coie law firm, which advises venture capital start-ups. Perkins worked with Kalanick to set up a confidential hotline to investigate complaints by female employees.
According to a June 6 Recode article, Perkins Coie collected 215 incident reports, which included issues regarding sexual harassment, bullying, bias, and retaliation. The investigation led to 20 terminations, 31 employees in training or counseling, 7 written warnings, 100 cases with no action taken, and 57 cases still open.
Although the Uber ride-sharing service has been extremely popular, Morning Consult marketing advisors found only an average of 50 percent of U.S. adults have a positive opinion of the corporation. That number crashed to a new low last week of 40 percent.
Rumors are swirling in Silicon Valley that the Board on June 13 will demand Kalanick take a mandatory leave of absence, be formally counseled, or be terminated.
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