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Will Uber change its toxic culture?

Tom Fox | August 28, 2017

Dara Khosrowshahi was been named as the new chief executive of Uber Technologies, Inc. He was hired away from Expedia, the travel bookings Website. Khosrowshahi certainly has his hands full as Uber does not currently have the following positions filled: SVP of business, no formal No. 2, no chief operating officer (COO), no chief financial officer (CFO), no general counsel (GC), no chief marketing officer, no SVP of engineering or chief diversity officer. It probably should go without saying the company does not have a CCO or anyone who might be responsible for compliance and ethics at the company.

For The Man From FCPA, it is this final opening which, at the end of the day, may be the most critical. Obviously, the tone set by former CEO Travis Kalanick was devoid of anything close to compliance and ethics. But there was also a failure at the board of directors level to reign in the toxic culture prior to its termination of Kalanick as CEO. The board has taken steps to improve the culture such as the board’s unanimous acceptance of the recommendations of the Holder Report. However, these are only the beginnings of steps which can move the company to a culture of compliance and ethics.

Uber has an excellent service as demonstrated by its faithful customers (The Man From FCPA is one) and still high share valuation. Khosrowshahi has a good business foundation to work from. Yet to keep its share valuation and business model, Khosrowshahi will have to change how the company does its business. Usually in FCPA compliance, it is the employees in the field which engage in nefarious behavior. In Uber’s case, it was not the field employees but the corporate office employees who most often lied, cheated, and engaged in unethical practices.

Uber will be studied in Business Schools for some time to come. The Man From FCPA hopes that part of the curriculum will be how the new CEO, Dara Khosrowshahi led a turnaround to make the company do business more ethically and in compliance.