McDonald’s has been accused of “trying to hide from public scrutiny” by banning the media from this week’s shareholder meeting, which staff have promised to gatecrash with the biggest ever protest demanding an end to “poverty wages” paid to many of its 420,000 staff.
Shareholders and corporate governance groups said it was “extremely shocking” that a company the size of McDonald’s would try to hold its annual meeting behind closed doors, especially so soon after its new chief executive, Steve Easterbrook, promised to act as an “internal activist” and turn the struggling company into a “modern and progressive” burger chain.
The AFL-CIO, the largest federation of US trade unions and holder of more than $30m worth of McDonald’s shares, told the Guardian that: “We can’t think of a single other company who has dared to ban the press from an annual meeting. What does the company have to hide?”
“We call on McDonald’s to reverse their decision and allow the media,” Vineeta Anand, the AFL-CIO chief investment research analyst, said. “Sunshine is the best disinfectant, when you shine a light on a company it changes their behaviour. They are acting like some sort of secret society.
“McDonald’s is not an insignificant company, they are one of the nation’s best-known household names and it is extremely shocking and troubling that a company of its size would ban the press.”
When the Guardian asked McDonald’s for permission to report from the meeting at its headquarters in Chicago on Thursday, the newspaper was told its reporters would be prevented from entering. “We will not be hosting media inside the meeting,” a McDonald’s spokeswoman, Heidi Baker, said. “Media are invited to listen to the meeting via webcast.”
The company has previously banned media from attending the event. Barker confirmed that Easterbrook was involved in the decision to continue the ban, a highly unusual move at a major listed company. Easterbrook declined to comment and failed to respond when asked directly on Twitter.
Barker denied that McDonald’s was banning the media to try to avoid reporting of the low-wage protest, and said it was because “our priority is to accommodate our valued shareholders”.
However, shareholders contacted by the Guardian said transparency at McDonald’s was vital and allowing the media would allow more small shareholders to be able to learn about what happened in the meeting. Last year 101 protesters were arrested and part of McDonald’s sprawling Chicago campus was forced to close.
Anand said McDonald’s suggestion that there would not be room to accommodate the media was “the lamest of lame excuses”. “How many press were they expecting and how many investors?” she said. “If it’s a question of hundreds of people, maybe they should rent a bigger room, and if they can’t afford that it is pretty pathetic.”
Timothy Smith, director of governance and shareholder engagement at Walden Asset Management, which holds $21m of McDonald’s shares, said: “Obviously many companies would like to keep such controversies under wraps. Since McDonald’s proudly declares it believes it must be accountable to consumers, employees and the public as well as shareholders, it is surprising that they wish to hold their annual meeting in secret without press allowed to observe.”
Eleanor Bloxham, chief executive of the Value Alliance and Corporate Governance Alliance, which advises many of the Fortune 500 companies on corporate governance issues, said McDonald’s ban on the media was “a very fearful move”.
“It signals fear of scrutiny, and it’s not going to help them build trust with shareholders or the public,” she said. “They should want people to be able to understand the conversation between McDonald’s and its workers and shareholders. In terms of rebuilding its reputation and regaining public trust, this goes against everything they have been trying to do.
“It is a very fearful move that is not going to create confidence on behalf of shareholders or the public.”
Father Seamus Finn, chairman of the Interfaith Center on Corporate Responsibility (ICCR), a coalition of asset management firms with more than $100bn under management, said McDonald’s exclusion of the press was “deeply disturbing and quite perplexing”.
“At a time when the company is struggling to regain its footing on a number of fronts and working to attract new customers this is no time to hide from public scrutiny,” he said. “This is not the kind of behaviour that I would expect to see from any public global corporation that relies on the trust of its customers on a daily basis.”
Adriana Alvarez, a McDonald’s worker who will be protesting outside the meeting on Thursday, said that while she could understand why the company would prevent its protesting staff from attending it should allow independent observers.
“We may not have a seat inside, but we’re sure McDonald’s will hear us, and see the value of investing in its workforce, instead of making decisions to further line the pockets of wealthy shareholders and executives,” she said.
This article was written by Rupert Neate in New York, for theguardian.com on Monday 18th May 2015 12.00 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010