The drama around former McDonald’s (tkr: MCD) CEO Steve Easterbrook could have been avoided if the Board had been engaged. Similarly, the company’s HR function failed. Self-preservation is to blame. Ironically, McDonald’s Board is at risk of being purged and HR leadership has already turned over under new MCD CEO Chris Kempczinski.
How is self-preservation a factor? CEOs to a degree control who sits on the Board. Further, don’t fool yourself into believing that Board members serve some higher purpose. They are career-minded. Many are full-time board members who make a career sitting on corporate boards. Many board members fear rocking the boat and developing a reputation as a trouble-maker for this could jeopardize their board seat and potentially torpedo the opportunity for future board seats. It’s easier to turn a blind eye than to risk becoming a dissenter.
A CEO’s power over a department head is obvious and therefore there is no great mystery as to why McDonald’s former HR head failed to act.
If you are unfamiliar with the Steve Easterbrook story, CNBC and the WSJ provide decent primers. Cultural rot starts at the top.