Uber CEO Travis Kalanick to Take Leave of Absence

HIGHLIGHTS

  • Uber has also released the recommendations of an internal investigation
  • Among other things, they called for reducing Kalanick’s authority
  • The recommendations were unanimously adopted by the Uber board on Sunday

Uber Chief Executive Officer Travis Kalanick told employees on Tuesday he will take time away from the company he helped to found, one of a series of measures the ride-hailing company is taking to claw its way out from under a mountain of controversies.

Kalanick’s move comes after a months-long investigation led former US Attorney General Eric Holder, who was hired by Uber to look into its culture and workplace practices after a female former employee publicly accused the company of what she described as brazen sexual harassment.

Uber CEO Travis Kalanick to Take Leave of Absence

Uber on Tuesday released the recommendations from that report, which include reducing Kalanick’s sweeping authority and instituting more controls over spending, human resources and the behavior of managers.

Kalanick’s departure, even if it is temporary, is a thunderclap for the Silicon Valley startup world, where company founders in recent years have enjoyed great autonomy and often become synonymous with their firms.

It also marks a pivotal moment for the world’s most valuable venture-backed private company, which has been largely defined by Kalanick’s brash approach.

Kalanick, 40, said he needed the time away to grieve for his recently deceased mother and to work on his leadership skills, according to a staff email seen by Reuters. He did not say how long he would be away.

“If we are going to work on Uber 2.0, I also need to work on Travis 2.0 to become the leader that this company needs and that you deserve,” Kalanick wrote in his email. “During this interim period, the leadership team, my directs, will be running the company.”

According to a source familiar with the matter, Kalanick can return to the company whenever he would like.

More oversight needed
The company on Tuesday shared with its staff 47 recommendations for management and policy changes that were unanimously adopted by the board on Sunday. Kalanick was not at the meeting, said a source who was present.

The meeting was marred by private equity executive David Bonderman making a sexist remark about women talking too much. He later resigned from the board of directors, calling his comment “careless, inappropriate, and inexcusable.”

The recommendations from Holder’s firm, Covington and Burling, include adding an independent director to the board and considering an independent chair; mandated manager training; and a bigger and more independent audit committee to oversee spending and management.

“I would now suggest to any startup, here are the Covington rules, and when you get passed 100 people, put these in place,” said Steve Blank, a startup founder and mentor and adjunct professor at Stanford University.

Other recommendations prohibit romances between bosses and their subordinates and create clearer guidelines on the use of drugs and alcohol.

 

“I think it paints a picture of a company pretty out of control with no oversight from the board or basic controls,” said Elizabeth Ames, senior vice president at the Anita Borg Institute, which advocates for women in technology.

At Tuesday’s employee meeting, human resources chief Liane Hornsey thanked the former employee who wrote about harassment, Susan Fowler, for being a catalyst for the changes. She received applause from employees, according to the source at the meeting.

Holder’s recommendations stressed the importance of a new chief operating officer. The company has been searching for a No.2 executive for more than three months and is also looking for a chief financial officer.

A number of senior Uber managers left in recent weeks as the Holder investigation and a parallel probe focused strictly on sexual harassment and other employee complaints, conducted by the law firm Perkins Coie, moved forward.

The most recent departing executives included Emil Michael, head of business and Kalanick’s closest confidant, and Eric Alexander, who ran the Asia Pacific region.

Uber said last week it had hired two women to fill top roles: Harvard Business School management professor Frances Frei will serve as an executive coach and Apple marketing executive Bozoma Saint John was hired to mend Uber’s brand. Uber also added a second woman to its board, Wan Ling Martello, an executive vice president at Nestle, to serve as an independent director.

There are 14 people at Uber who report directly to Kalanick and who will likely take on more responsibility in his absence. They include Ryan Graves, head of operations and one-time chief executive at Uber.

Founder power
Uber grew to a valuation of $68 billion in seven years amid non-stop controversy. It has upended the tightly regulated taxi industry in many countries and changed the transportation landscape, but has run into legal trouble with a rough-and-tumble approach to local regulations and the way it handles employees and drivers.

Uber has suffered a series of damaging setbacks in recent months, including a federal probe into the company’s use of technology to evade regulators in certain cities and a trade secrets lawsuit filed by Alphabet Inc’s self-driving unit, Waymo.

Some venture capitalists say Uber’s challenges should serve as a warning that the Silicon Valley ethos of leaving founders in control of companies, even after they grow into big corporations, can be a dangerous proposition.

“Inevitably, this will help drive the pendulum back toward better governance inside an organization,” said Robert Siegel, a lecturer at Stanford University and venture capitalist at XSeed Capital. “Sometimes we conflate great business leaders with strong personalities with great governance.”

Facebook CEO Mark Zuckerberg to Return to Harvard Today as Commencement Speaker

HIGHLIGHTS

  • Zuckerberg on Tuesday live-streamed a visit to his dorm room
  • The Facebook CEO will address its graduating class on Thursday
  • Bill Gates has also spoken to Harvard graduates in 2007

One of Harvard University’s most famous dropouts, Facebook founder Mark Zuckerberg, returns on Thursday to the Ivy League school to address its graduating class.

The 33-year-old tech titan, who dropped out the college to found the pioneering social network company, has been on a nostalgia trip during the week leading up to Harvard’s commencement. On Tuesday, he live-streamed a visit to the dorm room where he started the website he initially called “thefacebook.com” and made available just to his classmates.

Facebook CEO Mark Zuckerberg to Return to Harvard Today as Commencement Speaker

“This is literally where I sat. And I had my little laptop here and this is where I programmed Facebook. It took me about two weeks,” Zuckerberg said in the video. “This is where it happened.”

Since its launch in 2004, Facebook has grown into the world’s largest online social network and inspired a host of competitors, including Twitter and Snapchat.

Today some 1.9 billion people use Facebook each month. Its broad reach has made the company a lightning rod for controversy, most recently for the ways that producers of fake news stories used it to influence public opinion during the 2016 US presidential election and for a pair of incidents last month in which users posted videos of two murders, one of them live.

The Menlo Park, California-based company has vowed to tackle both problems and earlier this month said it would hire 3,000 new workers to speed up the removal of videos depicting murder, suicide and other violent acts.

Zuckerberg’s speech on the 381-year-old school’s leafy campus in Cambridge, Massachusetts, will not be the first by a successful dropout who has returned to address a graduating class.

Microsoft co-founder Bill Gates spoke to graduates in 2007, shortly after saying that he would step away from his day-to-day role with the world’s largest software company to focus his time on philanthropy.

“Dad, I always told you I’d come back and get my degree,” Gates joked to the crowd as he accepted an honorary law degree. “It will be nice to finally have a college degree on my resume.”