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The investigation into Uber recommends less responsibility for CEO Travis Kalanick and a more independent board

The Holder report also issued rules on partying and company romances.

former Attorney General Eric Holder
Eric Holder, who conducted the investigation
Slaven Vlasic / Getty

Uber released a series of recommendations that came out of an external investigation into the toxic culture and inept management to its staff at an all-hands meeting today.

The key one: Uber CEO Travis Kalanick should hand over some of his responsibilities to other senior managers and whoever eventually takes the role of COO.

The investigation, conducted by law firm Covington & Burling, was prompted by former engineer Susan Fowler’s account of an environment fraught with sexism and sexual harassment, as well as management turmoil, which she witnessed first hand. She reported these incidents on a number of occasions to human resources and her managers, as well as the company’s CTO Thuan Pham.

However, the investigation only called for one major executive firing: Emil Michael. As Recode reported, Michael announced to staff yesterday he was leaving the company. In the lead-up to the close to seven-hour meeting the company’s board had on Sunday, Michael was being pressured by several board members to resign.

That’s in part because many of the incidents people who were interviewed for the investigation were asked about included Michael, including an employee trip to an escort bar in Korea.

Kalanick will be taking a leave of absence for an undetermined amount of time, which he outlined in an email to the staff this morning. While he’s away, he said, his team of direct reports will be heading up the company.

Other recommendations that the company’s board voted unanimously to accept included finding a COO — a partner to Kalanick if he remains with the company — who could fulfill these recommendations. It also said it was important to increase the profile of its head of diversity Bernard Coleman by making his role report directly into the CEO and COO.

The report reads:

An empowered senior leader who is responsible for diversity and inclusion is key to the integrity of Uber’s efforts. Uber should elevate the visibility of the current Head of Diversity, Bernard Coleman, and emphasize the outreach component of Mr.Coleman’s position. Uber should increase the activities and communications of Mr.Coleman’s team. As part of these communications, the Head of Diversity could send updates to employees regarding the company’s diversity efforts, engage in outreach efforts to Uber employees and affinity groups at Uber, and serve as a resource for senior management and rank-and-file employees alike with respect to diversity and inclusion.

Minutes after the report went live, Fowler responded via Twitter.

Susan Fowler, the engineer who prompted this investigation, responds.

Former Attorney General Eric Holder and Tammy Albarran — the firm’s partners who conducted the investigation — also called for a more independent board of directors and the appointment of an independent chairperson. Kalanick has a number of allies on the board — especially co-founder Garrett Camp — giving him outsize control of the company.

The report also suggested that the board put an oversight committee in place.

“For example, the Board could create an Ethics and Culture Committee or a similar body. A committee of this nature could be organized as a standing committee of the Board, the purpose of which is to oversee Uber’s efforts and enhance a culture of ethical business practices, diversity, and inclusion within the organization. The activities of the committee could involve meeting with senior members of management who are responsible for ethics, Compliance, Human Resources, and risk.”

Already, the company has appointed Nestle executive Wan Ling Martello as an independent board member.

As a result of the Holder report, the board has decided to task a senior executive with ensuring that the recommendations are implemented. It also calls for mandatory leadership training for senior management and executives, paying specific attention to the human resources department. A common complaint about the company is that many of Uber’s managers are young and are leading teams for the first time and were thrust into the role without being properly trained.

The board also suggested being much clearer about the company’s rules on alcohol and drug use — particularly during work hours and work events.

It reads:

“Uber should take steps to provide clear guidelines about acceptable and unacceptable uses of alcohol and strictly prohibit the use of controlled substances, including prohibiting consumption of alcohol during core work hours and prohibiting consumption of non-prescription controlled substances during core work hours, at work events, or at other work-sponsored events.”

Uber’s off-sites are now notorious (see Vegas and Miami), but the drinking culture at the office was also an issue. Sources recall an instance when someone walked into a meeting with Kalanick with a beer in his hand before 5 pm at which point Kalanick said enough was enough, instituted a no-drinking policy before 5 pm rule and locked the beer tap.

The recommendations also address intracompany relationships stating that subordinates should not be involved with their managers. In fact, relationships within the company happen frequently, several sources said, which the larger Holder report covered.

Regarding relationships:

“Uber should develop specific and clear guidance concerning appropriate workplace relationships, including making clear that any type of romantic or intimate relationship between individuals in a reporting relationship (either direct or indirect) is prohibited. If employees in a reporting relationship find themselves in a romantic or intimate relationship, they must be required to immediately report it so that appropriate action can be taken, including making sure that the individuals are not in any type of reporting relationship (direct or indirect) going forward.”

Here are the full recommendations:

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