Moneybox

Uber Is Not Serious About Changing Its Toxic Culture

Ronald Sugar.
Ronald Sugar, former chairman and CEO of Northrop Grumman, at the Torrance facility in 2009.
Robert Lachman/Los Angeles Times via Getty Images

Uber is still in the early days of trying to become a kinder, gentler company. CEO Dara Khosrowshahi is trying to eradicate the toxic culture that was created by his predecessor, Travis Kalanick, and replace it with something more inclusive, a very difficult job with no guarantee of success. Simultaneously, he has to deal with a famously fractious board that still includes Kalanick and his other tech-bro founder.

Now, after a yearlong search, that board has a new chairman: Ronald Sugar, a 70-year-old white man who made his fortune as an arms dealer. This is an unusual choice for several reasons.

It’s almost unheard-of for the chairman of a private company to be an independent appointee, rather than a founder or major shareholder. Then again, if any private company needed an independent chairman, someone without a dog in any of its many, many boardroom fights, it was Uber. The question is: After spending more than a year looking to fill the job, why did Uber pick someone with such atrocious optics?

Sugar is in many ways an archetypal tech-company board member. He has CEO experience at a multibillion-dollar company, he’s a trained engineer, and he’s learned the arcane skills of board membership at giant companies such as Apple and Chevron. (Given that Apple and Uber might well soon be competing on the driverless-car front, it will be interesting to see whether this appointment means that he’ll step down from his Apple board seat.) If Uber were a mature public company, people would take no more notice of this appointment than they did when he joined the Apple board.

But Uber is neither mature nor public, and the biggest task facing its board is to support Khosrowshahi in his corporate-culture-turnaround efforts. The open board-chair position was a prime opportunity to lead by example and to appoint someone who embodies the idea of strength through diversity and empathy. Instead, they appointed the former CEO of Northrop Grumman—a position that requires, more than anything else, the ability to be OK with making billions of dollars even as your products maim and kill hundreds of thousands of people around the world. That’s not the kind of skill Uber needs right now.

The message being sent by the appointment of Sugar, then, is the same as the message being sent by the rehabilitation of disgraced former SoFi CEO Mike Cagney, who was forced out of his company for creating and perpetuating a harassing, “frat house” work environment: that at the very topmost echelons of Silicon Valley, everybody else’s rules still don’t apply.