The CEO of McDonald’s was terminated on Sunday by the company’s board of directors due to an inappropriate but consensual relationship with an employee.
According to a statement issued by the corporation, CEO Steve Easterbrook “separated from the Company following the Board’s determination that he violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.”
The board immediately named Chris Kempczinski as his replacement. Kempczinski was previously president of McDonald’s USA.
Easterbrook has been CEO since 2015 and successfully delivered improved results via technological advancements such as third party delivery through apps and kiosk installations allowing customized orders on-site, according to Fox Business.
“You can make a very strong argument that Easterbrook was the best CEO in the restaurant industry,” said Michael Halen of Bloomberg Intelligence.
McDonald’s corporate policy forbids managers from having romantic relationships with direct or indirect subordinates.
Before exiting, Easterbrook acknowledged in an email to employees that the relationship he had with an employee was a mistake.
“Given the values of the company, I agree with the board that it is time for me to move on,” he wrote, as reported by CBC.
Consensual relationships within an organization between bosses and employees have always been seen as troublesome, but the advent of the #MeToo movement has sensitized many companies to be increasingly vigilant in policing policy infractions in the interpersonal realm.
“Large public companies are less likely to tolerate such behavior because of reputational risk concerns,” Yuen Teen Mak, a professor at NUS Business School in Singapore, wrote in an email to Bloomberg regarding the firing of Easterbrook. “The nature of the business may also be a factor — after all, their target customers are families and children.”
On some levels, the logic in protecting corporate shareholder value from the risk of lawsuits is obvious. But at the same time, prohibiting consensual relationships between two people at the risk of termination is worthy of debate.
Fox Business reported on the development Monday morning on “FBN:am.” Guest analyst and Belpointe Chief Strategist David Nelson, expressed his frustration with how overwrought the business environment has become about such matters.
“I really hate this story,” he said. “I really hate it.”
“This is a consensual issue, a consensual relationship. I find it tragic,” he added. “But this is the world we live in today. This is where corporations have gone, corporate culture has changed. A lot of boards have put in rules in place like this.”
Host Lauren Simonetti came down on the side of defending the need for strict ethical behavior, saying, “Ethical, being ethical is more important than finances.”
“For the stock, it will be down,” Nelson said. “The knee jerk reaction will be to sell the stock. But this is not an operational issue … [A veteran] is stepping in. I’m sure he’ll shepherd the company very well.”
Video by Fox Business
McDonald’s has higher standards than Congress.
— Cog (@40to5yet) November 4, 2019
That implies the subordinate lacks the intelligence to understand the situation. The subordinate likely worked in the corporate office, likely intelligent. Abuse of power happens, but to blanket all relationships of this type as non-consensual is an insult to the subordinates.
— Darren Alexander (@DarkRoastBooks) November 4, 2019
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