McDonald’s hires an outside firm to assess its diversity efforts
Burger chain investors had demanded a civil rights audit as shareholders focused more on social issues
McDonald’s said diversity and inclusion are core corporate values.
McDonald’s Corp. said it hired a third party to assess its diversity, equity and inclusion efforts, after the burger giant’s investors asked the company to conduct a civil rights audit.
A shareholder proposal submitted by labor pension fund advisory firm SOC Investment Group had asked McDonald’s to analyze the impact of the company’s policies on civil rights across the chain’s operations.
The proposal came as McDonald’s, America’s biggest restaurant company by sales, faced criticism over its handling of racial issues, and as investors pressed other big companies to assess their records. on race and related issues.
McDonald’s reported in a filing Thursday that about 274 million shares of common stock in the company voted in favor of the proposed audit, based on a preliminary count following the company’s annual meeting of shareholders. last week.
About 217 million shares voted against the proposal, with about six million abstaining. Bloomberg first reported preliminary vote tallies.
McDonald’s said diversity and inclusion are core company values and it is committed to providing opportunities for employees, franchisees and suppliers.
“While we are proud of our progress, our efforts continue and we will continue to focus on actions that have a meaningful impact,” the company said.
The SOC said in its proposal that McDonald’s should solicit feedback from franchisees, employees, suppliers and customers, and make its findings public.
Civil rights audits assess company policies regarding race, sexual orientation, gender and other characteristics, the group said.
McDonald’s had said in a separate filing ahead of the vote that such an audit would bring no benefit to shareholders because the company had already committed to new standards of conduct across its operations.
Chain executives are now being assessed on their progress in increasing minority representation in their ranks as part of their annual compensation review, and last year McDonald’s said it would offer loans to low interest rate to new franchisees to help increase diversity among the ownership of its American restaurants.
Proxy firm Glass, Lewis & Co. had advised shareholders to support the proposal, writing that taking on a third-party audit would help McDonald’s identify and mitigate risks.
Failure to do so could potentially harm shareholder interests, Glass Lewis said.
Dieter Waizenegger, executive director of SOC, said Thursday the company hoped to work with McDonald’s on the assessment.
Civil rights audits have become more common in recent years as investors scrutinize how companies treat their employees and issues of race have taken on greater prominence in the United States.
Some companies have chosen to carry out such audits themselves.
In 2019, Starbucks Corp. engaged law firm Covington & Burling LLP, led by former U.S. Attorney General Eric Holder Jr., to assess and provide recommendations on how the company could better manage diversity and inclusion in its stores .
Starbucks in 2018 came under fire after two black men were arrested at one of its Philadelphia cafes.
This year, Google parent Alphabet Inc., Apple Inc. and cigarette maker Altria Group Inc. were among the companies that faced proposals from investors demanding independent audits of the companies’ management of the race and other civil rights issues.
In recent years, McDonald’s has been sued by former and current franchisees, two former executives and a media company for its alleged bias in its treatment of minorities.
The company said the cases were unfounded and decided to dismiss or settle many of them.
In a lawsuit brought by black franchisees of four restaurants, the owners agreed last year to leave the chain and drop the lawsuit, while the company bought the restaurants for a total of $6.5 million, said McDonald’s.
The company said it was confident its case was strong, but the settlement allowed everyone involved to move forward.
McDonald’s chief executive Chris Kempczinski apologized last November for a text exchange with Chicago’s mayor over the shooting deaths of two Chicago children that critics called racially insensitive.
Mr. Kempczinski said the comments were wrong and discussed the matter with employees, franchisees and local leaders.