Before I waited too long, I wanted to review the ethical misconduct case of former McDonald’s CEO Steve Easterbrook. He was McDonald’s powerful CEO for nearly five years. Nevertheless, he is proof that when a company puts policies into place, they apply to everyone. The consequences of his actions were made even more biting if we realize that Easterbrook, by his immense power and position in the organization, gave tacit approval to the sexual harassment policies he espoused. He was the definition of hypocritical.
$105 Million Settlement
On December 15, 2021, Easterbrook returned more than $100 million in cash and stock to the organization. The firing was anything but friendly, it got dragged out in the courts for more than two years. Nevertheless, it made a strong case that ethical behavior especially when it comes to sexual harassment must be pursued until fairness is served.
In giving back the funds (which was the severance agreement) occurred as the result of an inappropriate sexual relationship in 2019. However, the huge give-back came not as the result of the one inappropriate relationship (that was the firing) but other facts never revealed.
As the investigation unfolded, the organization learned that when Easterbrook was grilled by the board of directors, he straight-faced lied about his past. In fact, he concealed three additional affairs with subordinates.
When the board learned about his inappropriate behavior, they demanded he return his $105 million severance. He refused. However, after the successful conclusion of the lawsuit, he returned the money and wrote the following letter of apology:
“McDonald’s and its Board of Directors value doing the right thing and putting customers and people first. During my tenure as CEO, I failed at times to uphold McDonald’s values and fulfill certain of my responsibilities as a leader of the company. I apologize to my former co-workers, the Board, and the company’s franchisees and suppliers for doing so.”
Noble? Not so Much
Sexual harassment is a broad term that far too often covers a multitude of serious actions. The actions that brought down Easterbrook were based on sheer stupidity and decision-making that could have only been rooted in arrogance. He was an extremely powerful executive who took advantage of his position.
To no surprise, Easterbrook was found out by an unnamed whistleblower. The investigation did not reveal the sophisticated world of a multi-millionaire executive, rather the idiotic actions of a 12-year-old.
According to a New York Post piece by Lisa Fickenscher (December 16, 2021), Easterbrook sent dozens of nude pictures of his conquests as email attachments. He embarrassed his employer, the employees, and ultimately, himself.
At the conclusion of the litigation Enrique Hernandez, Chair of the McDonald’s board said:
“This settlement holds Steve Easterbrook accountable for his clear misconduct, including the way in which he exploited his position as CEO,”
Easterbrook said in his apology that he failed, at times, to uphold the corporation’s values. It would appear that at least four affairs in five years, along with inappropriate pictures and texts is much more than inappropriate behavior – at times.
He had the opportunity
For any scandalous behavior to occur, there must be an opportunity often made possible by a lack of oversite. In plain sight, who will go to HR and complain about the CEO with the multi-million-dollar salary, private jets and the like?
Easterbrook, a divorced father of three, could have easily met women away from the office environment, but his choice (and I firmly believe it was a need for power) was to sexually harass his attractive subordinates.
There are dozens of ways he could have rationalized his behavior, but I believe it was simply a matter of, “I am the CEO of a multi-billion dollar company. Who is going to challenge me?”
All it took was one whistle blower.
Unethical behavior leading to sexual harassment and/or abuse, cuts across the grain of society. It appears in organizations that lack ethical training, ethics reinforcement and ethical expectations. Not surprisingly, it is often the domain of the executive suite because “C-level” executives push back against HR claiming it’s not for them, or it’s a waste of time. More, pointedly, that it is meant for lower-level employees.
Easterbrook’s accomplishments, and there were many, will always be clouded by his prurient mistakes.
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