HR Administration

McDonald’s Chief People Officer Resigns After CEO Fired for Violating Company Policy

By Yasmeen Qahwash

Nov. 12, 2019

https://workforce.com/news/the-evolving-role-of-a-chief-people-officerFollowing the early November announcement that McDonald’s Chief Executive Officer Steve Easterbrook was fired after admitting to violating company policy by having a consensual relationship with an employee, Chief People Officer David Fairhurst resigned a day later.

While a company spokesman said Easterbrook’s firing and Fairhurst’s resignation are unrelated, experts contend that with such a drastic and sudden leadership change, it’s not uncommon for major shifts to occur in the C-suite.

“When the CEO leaves the company, it is very common for it to have a cascading effect. In some cases, other executives leave because they did not get the CEO job and therefore felt passed over. In other cases, they are not aligned with the new CEO and leave to pursue new opportunities,” said Dave Ramos, chief executive officer of consultancy Shiftpoints Inc., in an email. “Every executive will now have to switch their personal loyalty to Chris Kempczinski, their new CEO, or consider departing. Some of the senior executives may struggle to make this switch.”

In order to rebuild trust, Ramos said Kempczinski and the executive team must “address these issues in a humble, transparent and credible way.” The fast-food giant also stated in a press release that the “leadership transition is unrelated to the company’s operational or financial performance.”

Chicago-based McDonald’s leadership shake-up also serves as an example of how the #MeToo movement put a spotlight on the behavior of those who are in a powerful position in the workplace. Ramos said that “Easterbrook’s firing should be a red alert warning to any other executives who are violating McDonald’s no-dating policy.”

Rebecca Thornley-Gibson, a partner at law firm DMH Stallard, said that because of the amount of time colleagues spend together, it is common for personal relationships to occur. “Most of the time this won’t create issues and employers won’t interfere with the relationship,” Gibson said. “However, where there is a relationship that involves one of the individuals holding the balance of power in the workplace relationship, then conflict issues are more likely to arise.”

Gibson also said that when a relationship involves a party who is responsible for the other’s evaluations, pay reviews or promotion opportunities, then there is danger of favoritism and perceived bias. A subordinate may also feel as though they can’t say no to sexual advances from their superiors, which creates a risk of sexual harassment claims.

Relationships within the workplace aren’t illegal, but some companies implement non-fraternization policies to prevent allegations of favoritism or lawsuits stemming from unwanted advances or sexual harassment. If the situation does occur, experts say that it is best to notify a human resources director.

“Stopping relationships is not likely to be practical for employers but putting in place steps to minimize any fallout from the relationship should be considered,” said Gibson. “This will involve having in place, and communicating workplace policies on conduct at work, equality and diversity policies with a clear zero tolerance toward sexual harassment and also requiring employees to declare relationships which are likely to result in a potential conflict.”

Fairhurst had worked alongside Easterbrook for McDonald’s in the United Kingdom and was promoted to chief people officer soon after Easterbrook became CEO in 2015. No other details were provided as to why Fairhurst decided to step down when he did.

According to a Bloomberg article, Senior Vice President Mason Smoot was named as interim chief people officer.

Fairhurst announced his departure with a farewell post on LinkedIn that said although he was sad to be leaving, it was time for him to move on to his next career challenge.

Yasmeen Qahwash is an editorial associate for Workforce.

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