REFORM SCHOOL

The official recommendations for reforming Uber describe the perfect modern company

After four months immersed in the muck of Uber’s corporate culture, former US attorney general Eric Holder and his colleagues issued a list of recommendations for the beleaguered ride-share company Tuesday (June 13).

If they’re implemented, the suggestions—which run the gamut from when the office serves shared meals to major changes to the structure of its board—may help Uber regain the confidence of its investors, employees, and customers. But they also form the template for the governance and human-resources policy of the ideal modern company, most of which should be considered by all corporations. Here are some of the keys:

Corporate governance

Holder recommends that Uber install an independent chairman, long a cherished cause for good-governance advocates. An independent chair can provide oversight and scrutiny, and protect a company from self-dealing from its CEO. While Uber CEO Travis Kalanick doesn’t also serve as chairman—a common, and compromising, practice at US companies—the position is held by Garrett Camp, who co-founded Uber with Kalanick. That close connection means Camp can’t serve “as an independent check on Uber’s management,” as Holder recommends.

Holder also suggests Uber add more independent board members—and there may be at least one board vacancy, as of June 13—as well as create an ethics oversight committee. It should also beef up its audit committee with an independent auditor or ombudsman who can “bring significant compliance or harassment issues to the attention of the Audit Committee without having to go through management or the CEO.”

Executive pay

Advocates for effective management have understood for decades that executive pay should be tied to the performance of the company. In recent years however, there’s been a recognition that tying pay to financial metrics like share prices or earnings-per-share can distort the goals of the CEO, pushing them toward short-term goals at the expense of the company’s long-term health. In fact, research shows that companies that use non-financial incentives, like employee turnover, out-perform companies that don’t. Holder recommends Uber include incentives for adherence to ethical business practices, and progress toward building a diverse workforce, part of executive pay packages.

Hiring

Silicon Valley is wrestling with how to improve hiring practices, and Holder’s recommendations square with some of the best new practices urged by experts like Iris Bohnet, a behavioral economist at Harvard and author of What Works, a guide to promoting inclusive work places. Uber should implement hiring training, so interviewers are aware of their unconscious biases, and questions should be standardized, so candidate responses can be measured fairly, Holder says. Resumes of job candidates should be blinded, so their reviewers don’t see clues about gender and race.

Holder also recommends Uber adopt a version of the Rooney Rule, a practice used in the NFL that requires that at least one minority candidate be interviewed for every opening for a head coach. Uber should include at least one woman or under-represented minority in every pool of job candidates. The company should also require that a woman or minority be included on every interview panel.

Read this next: How to really reform a toxic culture, a Uber or anywhere else

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