The following editorial appeared in the Chicago Tribune.
The details are important in the firing of McDonald’s CEO Steve Easterbrook. What matters more broadly is the message: Rules for employee behavior must be followed by everyone, including the boss. No, especially the boss.
Chicago-based McDonald’s said Sunday Easterbrook lost his job because he was engaged in a consensual relationship with an unidentified employee. He “violated company policy and demonstrated poor judgment.” The company’s code of conduct states that employees who have a direct or indirect reporting relationship to each other are prohibited from dating or having a sexual relationship.
There’s more to the story that should be relevant to employees, shareholders and customers, including whether the board of directors discharged all its duties responsibly. According to the Wall Street Journal, McDonald’s said the board was alerted to the relationship, conducted a thorough investigation and acted swiftly. On Monday, McDonald’s said its top human resources executive, David Fairhurst, left the company but didn’t give a reason. Related events? That’s another question for McDonald’s about the judgment level in its C-suite.
As CEO, Easterbrook was the boss of every McDonald’s employee. The most important reason nonfraternization policies exist in the workplace is because supervisors have authority over employees. That power imbalance renders any such relationship susceptible to abuse. It’s difficult to see how someone can enter a consensual relationship with the person responsible for his or her paycheck. But that’s only half the problem. When a manager has a relationship with a subordinate, how can other employees be sure they’re being treated fairly?
Look back some years and you’ll find other examples of prominent CEOs who lost jobs over office affairs. In 2005, Boeing fired CEO Harry Stonecipher for having a relationship with a female executive. The company said his poor judgment had impaired his ability to lead. Yet it’s also easy to imagine other corporate boards overlooking bad behavior by the CEO, especially when the stock price is up.
The difference today, in the era of the #MeToo movement, is growing public pressure on organizations to hold powerful people accountable for sexual abuse, harassment and other bad behavior. Big institutions often struggle to confront their failings. When faced with a humiliating or legally vulnerable situation, their instinct for stonewalling and secrecy emerges. For those who need a shove to do the right thing, #MeToo delivers it.
McDonald’s immediately replaced Easterbrook with another senior executive, Chris Kempczinski, while making clear Easterbrook didn’t get the boot because of the company’s performance. In fact, McDonald’s is doing well in a competitive marketplace, and its stock took a large hit on the news of the CEO’s departure.
But bosses are leaders. They have the power to enforce their organizations’ priorities — but not the power to violate them.