MGT712 - McDonald's Corporation: Corporate Governance, Ethics, and CSR

This presentation provides a detailed analysis of McDonald's Corporation's corporate governance, ethics, and corporate social responsibility (CSR). It begins with an overview of the company, including its history, board structure, and financial performance. The presentation then delves into a significant corporate scandal involving racial and sexual discrimination, analyzing it through the lens of utilitarianism. A key focus is the identification of various stakeholder groups, particularly employees and customers, and their respective interests. The evaluation of McDonald's against the ASX (Australian Securities Exchange) principles, specifically principles 3 and 5, is presented, highlighting the company's ethical and timely disclosure practices. Carroll's pyramid of social responsibility is applied to assess McDonald's CSR initiatives, covering areas such as food safety, employment development, and environmental contributions. Finally, the presentation offers several recommendations for improvement, including diversifying top management, implementing stricter disciplinary actions, developing healthier food options, and refining marketing strategies to address customer interests and health concerns. The presentation is well-researched, citing multiple sources to support the findings and recommendations.

Corporate Governance, Ethics and
Corporate Social Responsibility

CONTENTS
 Company Overview
 Board Structure
 Corporate Scandal
 Stakeholders
 Evaluation of ASX – Australian Securities
Exchange Principles
 Caroll’s Philanthropic Model

SUMMARY
• One of the oldest and popular global business organisations.
• Comprehensive and diverse corporate governance structure.
• Involved in numerous corporate scandals in context of employee rights, health
concerns, food quality and the marketing strategies.
• Numerous stakeholders group, the most significant ones customers and
employees.
• Abides by ASX Governance principles in context of transparency, reporting, risk
management and others.
• Engaged in numerous philanthropic activities to serve the interests of the
stakeholders.
• Recommended to pay attention to health concerns and the food menu in terms
of CSR for the customers.
• Recommended to include diverse personnel in top management to represent the

COMPANY OVERVIEW
• Full name: McDonald’s Corporation
• Headquarters: Oak Brook, Illinois
• Founded Year: 1948
• Founders: Brothers Maurice (“Mac”) and Richard McDonald
• First restaurant opened: Year 1955
• Global Expansion: Year 1967 onwards
• Global Ad Campaign Launched: Year 2003
• Number of employees: 210000, year 2018 end (McDonalds,
2019a)
• Revenue: $ 21,025 million, year 2018 (McDonalds, 2019a)

BOARD STRUCTURE
• Multidisciplinary leadership approach (McDonalds, 2019a).
TOP LEVEL EXECUTIVES
FUNCTIONAL
DEPARTMENTS
FINANCE
DEPARTMENT
MARKETING
DEPARTMENT
SALES
DEPARTMENT
RESTAURANT
LEVEL
EXECUTIVES

EXECUTIVE BOARD
(Source: McDonalds, 2019a)

CORPORATE SCANDAL
• The McDonald’s Virginia Lawsuit
2015
• Central Issue: Racial and Sexual
Discrimination (Hansen, 2015).
• Franchise accused by the workers
for firing them based on their
minority status (Jamieson, 2015).
• Claims of passing on derogatory
comments.
• Lawsuit type: Civil rights lawsuit
(Reuters, 2015).

CORPORATE SCANDAL
• Ethical Theory in consideration:
Utilitarianism
• The theory states that an action is
ethical if it leads to general
happiness and utility (Broad, 2014).
• The allegations included the
organisation’s full control over
hiring, firing, wage-setting,
scheduling, training and discipline
activities.

STAKEHOLDERS
Employees
Customers
Regulators
Communitie
s
Investors

STAKEHOLDERS
• Employee Interests: Rewards and
recognitions (Lawrence and Weber,
2014) .
• Customer Interests: Healthy food
options.

EVALUATION OF ASX – AUSTRALIAN SECURITIES
EXCHANGE PRINCIPLES
Principle 3: Act ethically and responsibly
• Developed Company’s Corporate Governance Principles.
• Developed the charters for each of the Committees.
• Developed the Code of Conduct for the Board of Directors
• Implemented the Company’s Standards of Business Conduct, which applies to
all officers and employees (McDonalds, 2019b).

EVALUATION OF ASX – AUSTRALIAN SECURITIES
EXCHANGE PRINCIPLES
Principle 5: Make timely and balanced disclosure
• The entity McDonald’s files periodic reports, proxy statements and other
information with the SEC, under the Securities Exchange Act of 1934
(McDonalds, 2019b).
• Some of the chief current reports of the company are the annual report on
Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.
• Additionally amendments to above reports are filed as prescribed under the
Section 13(a) or 15(d) of the Exchange Act (McDonalds, 2019b).