STARK RAVINGS
The Newsletter of the IMA Canton Chapter

October 2018

 http://canton.imanet.org

Jeff Walters, President
Cullen Bahler, Editor

In this issue:

This Month's Tech Sessions

Take Our Survey

Ethics Case Study:
Uber Culture Causes Big Losses

Webinar Schedule

IMA Technical Sessions

Connect with Us!

Do you have info to share with our chapter? Email it to news@cantonima.org.

If you wish a colleague to receive these announcements, send an email to news@cantonima.org and we will add them to our announcement list.

Please join Us!

October 17 |  5:00 - 7:30 pm
Kozmo's Grille: 37 1st St SW, Massillon OH 44647 (directions)
Reservation Deadline:
Friday, October 13

Pre-Dinner Technical Session (5:00 - 6:00 pm)
The Opiate Epidemic
Presented by Gary Seech, Regional Director of Operations, Glenbeigh

After-Dinner Technical Session (6:30 - 7:30 pm)
The Canton Health Department
Presented by Gus Dria, Community Services Supervisor, Canton City Health Department

click here for more information about the speakers

click here to register

 

Take our Survey for the October Meeting

Our October speaker, Gus Dria, Community Services Supervisor for the Canton City Health Department, would like our members to take a brief survey so he can bring some additional insights to his presentation. We are asking that you complete the survey by September 22nd so that Gus can have time to compile the results for his presentation.

Please go to the following link to complete the survey: https://www.surveymonkey.com/r/3CDNS8V

Strategic Finance
ETHICS CASE STUDY: UBER CULTURE CAUSES BIG LOSSES
BY CURTIS C. VERSCHOOR, CMA, CPA

Ride-sharing giant Uber Technologies, Inc. has faced continuing steep operating losses since its launch seven years ago. Headquartered in San Francisco, Calif., the company has autonomous app-based operations in roughly 270 cities in 60 countries globally. Uber also invests in self-driving technology, with engineering sites in the United States and elsewhere. Since the corporation is owned by venture capital firms and individuals, and not the general public, its market value of some $69 billion is only an estimate. Eric Newcomer of Bloomberg Technology reported that Uber’s adjusted 2016 losses amounted to $2.8 billion.

The governance structure of Uber is dissimilar to that of a publicly owned company. The board of directors is said to consist largely of personal allies of former CEO and cofounder Travis Kalanick and of venture capitalists who have large investments in the company. They appear to have exercised insufficient oversight and allowed an overbearing management style and culture of bullying and harassment to become widespread. The company has faced lawsuits from drivers, regularly fought with regulators, and endured inappropriate comments from Kalanick.

Uber’s emphasis on a competitive “win at any cost” culture under the guise of meritocracy rather than a teamwork approach has been viewed as the cause of much of the turmoil and trouble. According to a July 2, 2017, story in the Chicago Tribune, all of Uber’s negative coverage and bad news led to a decline in its market share both at the Chicagoland level and in the U.S. as a whole while that of its major competitor, Lyft, has increased. “Uber has not shown that it can profitably produce better taxi service under competitive conditions,” says Hubert Horan, a transportation consultant who has written extensively about the company at nakedcapitalism.com. “A battle between fragmented, poorly capitalized incumbents and Silicon Valley billionaires supplying billions in predatory subsidies is not neutral market competition.”

The beginnings of better management accountability began in early 2017 when Susan Fowler, a former software engineer, circulated a critical blog post that outlined systemic sexual harassment at Uber and went viral. Since then, senior executive turnover has been extreme:

February 28, 2017: Amit Singhai, senior vice president of Engineering, is asked to resign.

March 15, 2017: Zoubin Ghahramani is appointed Uber’s new chief scientist.

March 19, 2017: President Jeff Jones quits.

May 30, 2017: Gautam Gupta, head of Finance, leaves the company.

May 30, 2017: Anthony Levandowski, head of the driverless car project, is fired.

June 12, 2017: Emil Michael, senior vice president of Business, announces resignation.

June 13, 2017: CEO Travis Kalanick announces indefinite leave of absence.

June 20, 2017: Kalanick announces forced resignation.

Kalanick and Michael resigned after the release of the report of law firm Covington & Burling’s months-long investigation of Uber’s culture. The project was set in motion by a special committee of the board of directors after the uproar caused by Susan Fowler’s blog post titled “Reflecting On One Very, Very Strange Year At Uber.” The Covington report contains 12 pages of recommendations, many of which may be relevant to most corporations and of interest to management accountants and financial managers who are tasked by the IMA Statement of Ethical Professional Practice to “contribute to a positive ethical culture.” The report focuses on four areas: tone at the top, trust, transformation, and accountability.

The recommendations are organized into 10 categories, many of which deal with human resources, including: change senior leadership, enhance board oversight, implement training, improve the Human Resources function and the complaint process, enhance diversity and inclusion, change employee policies and practices, address employee retention, and review and assess Uber’s pay practices.

Two of the categories of greater interest to management accounting and finance professionals involve internal controls and reformulating Uber’s 14 cultural values. The Covington report recommends improvement in all internal control areas, particularly disbursement controls involving travel and entertainment expenditures. Uber’s culture apparently didn’t emphasize proper record keeping, which was mentioned in many of the recommendation categories. The report also recommends expanding audit committee responsibilities to include oversight of the code of conduct.

Uber hasn’t disclosed its core values publicly, but former employees and media reports have confirmed them. The Covington report recommends eliminating values “that have been used to justify poor behavior including Let Builders Build, Always Be Hustlin’, Meritocracy and Toe-Stepping.” Continuing, the report states that Uber should adopt and put into practice values that “are more inclusive and contribute to a collaborative environment, including emphasizing teamwork and mutual respect…not as an end in itself, but as a fundamental aspect of doing good business.”

The Uber board of directors concurred with the Covington recommendations to achieve a workplace environment where “all the great minds gather to work and succeed.” Their conclusion gives special emphasis to recommendations concerning increasing oversight by the board of directors. Covington suggests Uber create a standing board committee on ethics and culture whose mission is to enhance a culture of ethical business practices, diversity, and inclusiveness within the organization. The committee could establish and monitor compliance with Uber’s business values and promote an ethical and inclusive environment.

IMA ETHICS HELPLINE

The IMA Helpline is designed to provide clarification of provisions in the IMA Statement of Ethical Professional Practice, which contains suggestions on how to resolve ethical conflicts. The helpline cannot be considered a hotline to report specific suspected ethical violations.

For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline AT 800-245-1383.

Click here for IMA's ethics resources, including the IMA Statement of Ethical Professional Practice.

Source: http://sfmagazine.com/post-entry/september-2017-uber-culture-causes-big-losses/    

 

Webinar Schedule

You will earn CMA and CPE credits when you attend any live webinar. Replay webinars are available in the archive but do not earn credits. Advance registration is recommended—IMA webinars are popular and fill up quickly.

Personnel Planning to Impact Profits
September 27, 2017
1:00 - 2:00 pm EDT

The Good, the Bad, and the Ugly of Presentations: Tips for Giving Effective Presentations
October 3, 2017
1:00 - 2:30 pm EDT

Leadership During Times of Change
October 4, 2017
1:00 - 2:00 pm EDT

Robotics in Finance and Accounting: Separating Fact from Fiction
October 11, 2017
1:00 - 2:00 pm EDT

12 Principles of Best Practice FP&A: What a Global IMA Survey Reveals
October 18, 2017
1:00 - 2:00 pm EDT

Register for Any Webinar

 

Mark Your Calendar:
Join Us at IMA Technical Sessions

2017-2018 tech sessions will be held at Kozmo's Grille with the exceptions noted below. There are two hour-long sessions beginning at 5:00 and 6:30 and dinner in between.

§ October 17, 2017

§ November 21, 2017

§ December 12, 2017

§ January 16, 2018

§ February 20, 2018

§ March 20, 2018

§ April 17, 2018

§ May 15, 2018

Cost for dinner is $30 regardless of the location. Please look for invite emails with registration information prior to each meeting.

Schedule:

§ Social/Networking at 4:45 pm

§ Pre-Dinner Technical Session at 5:00

§ Dinner at 6:00 pm

§ Post-Dinner Technical Session at 6:30 pm

More info: http://canton.imanet.org

 


© 2010-2017 Institute of Management Accountants - Canton Ohio Chapter # 155. All rights reserved.
info@cantonima.org


The mission of the Institute of Management Accountants (IMA) is to provide a forum for research, practice development, education, knowledge sharing, and the advocacy of the highest ethical and best business practices in management accounting and finance. Please join us as we promote this mission in the greater Canton, Ohio, area.


Designed by Jacq Connectt