Governance Gone Wild: Epic Misbehavior at Uber Technologies

Abstract

In this Closer Look, we examine the roles that leadership and culture play in contributing to chronic misbehavior and the manner in which it takes root in an organization. We use the example of Uber Technologies. Between 2012 and 2017, Uber Technologies faced a series of governance challenges including regulatory battles, relations with drivers, intellectual property theft, cybersecurity breaches, allegations of sexual harassment, and boardroom battles. We discuss these in detail and ask:

• Did Uber’s early risk-seeking behavior cause larger problems down the road? • How important is CEO personality and behavior in influencing the collective behavior of an organization? • How difficult is it to change culture, once it is established? • To what extent is culture created top down and to what extent bottom up? • Does Uber need a substantial turnover of management and key non-management employees to successfully complete a cultural shift?

Note: The Stanford Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance and executive leadership. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

Keywords: Corporate Governance, Risk, Reputational Risk, Risk Management, Scandal, Culture, Tone at the Top, Leadership, Incentives, Compensation, Controls, Oversight, Board of Directors, Corporate Governance Research

JEL Classification: G3, G14, G30