Resolved: That the board of directors report to shareholders, at reasonable cost and omitting proprietary information, on actions the company is taking to ensure decent work practices are upheld in the company’s owned and franchisee operations, including:

1. Information on the company’s overall approach and board-level oversight of human capital management in the context of emerging workforce-related risks and opportunities in the quick service restaurant sector; and
2. Comprehensive workforce metrics that effectively demonstrate the success and/or challenges the company faces in its management of human capital.

Supporting Statement

Demand for better corporate disclosure on human capital management is growing amongst investors and regulators. Jay Clayton, Chairman of the SEC, said in April 2019 to the House Appropriations Subcommittee on Financial Services and General Governance that he “would like to see more disclosure from public companies on how they think about human capital”. Human capital is increasingly seen as a primary source of value for many public companies, and by extension, it represents a source of value creation for investors. Therefore, a company’s disclosure should reflect the importance of human capital in its strategy and business operations, especially in customer-facing service industries where an employee’s conduct and efficiency are critical to the customer experience.

Over the past few years, a number of widely-publicized issues with McDonald’s workers have emerged, including a class-action lawsuit on sexual harassment and retaliation, a complaint filed with the U.S. Occupational Safety and Health Administration regarding workplace violence pattern in its franchisees’ operations, and workers’ protests for better working conditions in several countries including the US. Yet McDonald’s current disclosure does not provide sufficient information to understand the company’s approach to human capital management in its branded and franchisee operations. Disclosure of information such as the company’s minimum requirements and standards related to workforce practices (including wages and benefits, working hours and breaks, health and safety, grievance mechanisms, shift scheduling and training) would help investors to assess the effectiveness of the company’s approach to human capital management and the robustness of its board’s oversight.

McDonald’s disclosure also falls short in how it is addressing workforce-related risks and concerns raised by its employees. For example, the company does not disclose information about the number and types of complaints received from employees, or the corrective measures taken to address workforce-related risks and concerns raised by its workforce as well as health and safety key performance indicators. This information is key to understanding McDonald’s approach to human capital management and the degree to which the company is effectively managing risks that are emerging in the quick service restaurant sector including reports of a negative workplace culture.

Investors need further information about McDonald’s approach and board oversight of human capital management in order to understand and evaluate how it is responding to the concerns raised by its workforce, and the steps it is taking to deliver a positive worker experience and therefore, ultimately, a positive customer experience.