McDonald's Corporation - Serving Local Communities At Home And Abroad

Thursday, July 1, 2004 - 01:00

The Editor interviews Gloria Santona, General Counsel, McDonald's Corporation

Editor: How has McDonald's commitment to social responsibility evolved?

Santona:
McDonald's commitment to social responsibility dates back to our founder, Ray Kroc. Forty-nine years ago, long before the term "social responsibility" surfaced, Ray Kroc understood how important it was to give back to the community. It's part of our DNA. Supporting charitable activities addressing diabetes, arthritis, multiple sclerosis and chemical dependency, Ray Kroc provided our first model for McDonald's outreach.

Initially, we focused on giving back to the local communities where our restaurants are located. Through the years, our special bond with children has grown through a host of activities, such as supporting local youth sports teams and hosting Ronald McDonald safety programs. Broadening our focus in recent decades, we continually assess our impact globally, forming relationships in places you might not expect. For example, in developing our policies on environmental issues, we have worked with Environmental Defense (formerly known as Environmental Defense Fund).

Many of our environmental principles apply throughout our supply chain, where our greatest impact lies through agricultural practices. Our requirements often go beyond what we have to do as a matter of law. For example, since beef safety is a paramount concern for our Company, our CEO encouraged the U.S. Secretary of Agriculture to promote tighter regulations, consistent with the stricter standards that McDonald's had voluntarily adopted some time ago.

We gather advice and have a healthy dialogue with experts and scientists to learn as much as we can about how we can establish principles that our entire company can live by. We are committed to these principles as a system, as opposed to separating them country by country or store by store.

Editor: What are the ethical principles that provide a cornerstone for McDonald's successful global structure?

Santona:
One of our tremendous strengths is that we are not monolithic. Although we are a global company, we are comprised of interrelated local businesses. Our local partners benefit from the structure, training and other resources we provide to help them run great restaurants. In turn, we benefit from what we learn from the local community. We are a global corporation, but at the end of the day, we are a local business, employing local owner/operators and creating about 60 jobs at each restaurant, using local suppliers, all of which helps many local economies.

Our Standards of Business Conduct provides on-line ethics training that is a cornerstone for our successful global structure. We have built on Ray Kroc's vision of "a solid, permanent, constructive ethical program that will be in style É years from now even more than it is today."

Honesty and integrity continue to be the heart of McDonald's success. Years ago a code of conduct could be as simple as "We are ethical, truthful and dependable." Today, public expectations compound the complexity of the laws and regulations impacting the way we do business.

Ray Kroc believed that McDonald's should be a company that's known to do the right thing. He instilled these values in everyone who worked for him and this philosophy continues to be a part of our culture.
To learn more about McDonald's values, I'd like to encourage your readers to visit our website at www.mcdonalds.com/corp/values.html. Our values are put into action through practical guidelines, which we monitor and enforce. A copy of our Standards of Business Conduct is accessible at www.licenseenews.com/ethics9.html.

Editor: What training does McDonald's provide to put its code of conduct into action?

Santona:
Several elements contribute to the success of our compliance training. First, we use leading-edge technology from Integrity Interactive to deliver on-line ethics training around the globe. Each user can access training sessions at a time convenient for him or her, wherever they are located. If the user does not complete a session in one sitting, it can be bookmarked for completion at a later date.

Second, we tailor our training to the people who face the highest risks. Thus, our Standard of Business Conduct is delivered to many, many people. For those with a high-degree of discretionary authority or direct conduct with competitors or customers, we add courses focused on topics corresponding to their job functions and activities.

Third, the topics corresponding to job functions and activities are specifically targeted to the concerns of our business. For example, modules which we will roll out in the future will address privacy, confidentiality, antitrust, insider training, eCompliance (which includes such topics as corporate use of the Internet) and mutual respect (which includes such topics as zero tolerance on harassment).

The Integrity Interactive system enables individuals to enroll in classes via e-mail. If a user does not complete a course, the system sends an e-mail reminder from his or her supervisor or other McDonald's leader. In addition, a user is not allowed to enroll in a second course until the first is completed.
The tools available through the Integrity Interactive system help to identify which courses should be taken by which individuals, make the training available to them, track the progress of their completion and generate reports on who has taken what when.

Editor: How does McDonald's contribute to the prosperity and the well being of the countries in which it operates?

Santona:
We bring a lot to each area. We create entrepreneurial opportunities for our local partners, owner-operators and suppliers. The employment opportunities we create extend from restaurant workers to the agricultural industry and those who work in food processing plants. In our restaurants, we teach the skill sets needed to be good employees and supervisors to encourage success and advancement.
Our footprint extends broadly throughout our supply chain. When we entered Russia's marketplace, for example, we developed new opportunities for local enterprises, all the way back to Russian farms.
Throughout our footprint, everyone is encouraged to be active in civic and charitable activities. World Children's Day is one example of where we mobilize our restaurants in the 119 countries where we do business. For example, McDonald's China raised funds on World Children's Day in 2002 to donate more than 300,000 dictionaries to poverty-stricken children in mountain areas of China. In 2003, McDonald's Mexico raised funds to benefit a Mexican government institution whose mission it is to help children with auditory diseases.

Editor: How do McDonald's efforts to be a responsible corporate citizen in the foreign countries in which it operates contribute to the prosperity of the U.S. and its citizens?

Santona:
McDonald's has a global brand that arches over everything. Our owners, operators, franchisees and employees are all very committed to the McDonald's brand because building the brand benefits us all.
Our strong brand creates opportunities for prosperity for investors, restaurant owner-operators, employees and suppliers around the world. For example, our recent global "i'm lovin' it" campaign connected with customers throughout the world in an exciting way, driving increased sales. We're proud that the campaign was ranked as one of the five best in 2003 by The Wall Street Journal.

Editor: Congratulations on the awards your legal department has received for its pro bono services from the Chicago Public Interest Law Initiative, American Bar Association and others. Please describe a few of your outreach activities.

Santona:
When considering candidates for our legal teams - whether for our in-house staff or the law firms who support us Ñ I look for those with not only the best skills, but also a deep commitment to the world around them. I'm very proud of the wide variety of pro bono projects our legal teams have undertaken.

In collaboration with the Constitutional Rights Foundation, our Litigation Practice Group has taught students from the Gladstone Elementary School about the legal system. Through the Midwest Immigrant & Human Rights Center (MIHRC), our E-Commerce & Supply Chain Management Group has helped immigrant children.

We participate in a variety of community outreach activities as well. For example, we worked with Career Options and Future Teachers of Chicago in hosting a day-long seminar for 200 fifth through eighth grade inner-city school students at Hamburger University.

Editor: Do you partner with law firms in service to the public?

Santona:
Our work with Baker & McKenzie is just one example of how in-house counsel and law firms can jointly develop and implement pro bono projects. Attorneys from both McDonald's and Baker & McKenzie serve on the board of the Center of Disability and Elder Law, which screens clients to determine their need for pro bono services.

Drawing on their skills and talents from their commercial practice as well as training provided by Baker & McKenzie on the nuances of residential matters, the attorneys in McDonald's Real Estate Group review files of the Center's disabled and elderly clients to assess loan applications for predatory lending practices, identify defenses for impending foreclosures and suggest strategies for achieving the best deal in other transactions.

Editor: Under your leadership in expanding opportunities for minority attorneys, McDonald's legal department was honored by the Minority Corporate Counsel Association as an Employer of Choice. Among your many other contributions to the legal profession, you serve on the Board of Directors of the Association of Corporate Counsel. In what ways do such organizations help companies to be good corporate citizens?

Santona:
Both organizations make a wealth of resources available to their members through workshops and seminars, as well as on line. Their award dinners, as well as annual, regional and other meetings provide invaluable opportunities for networking. Your readers can learn more by visiting their websites www.acca.com and www.mcca.com.

Such professional associations offer in-house counsel myriad outreach opportunities. One example is the apprentice program; I worked with ACC in developing this program with Street Law, Inc. Working with a few high schools in Chicago, we sponsor a day at McDonald's to teach the students about contracts, personal injury claims and the other types of legal issues that arise in a business, like McDonald's, that is so understandable to most people. Throughout the day, the students meet many of our staff - from our corporate officers to our administrators - to see what kinds of careers might interest them. We have received some wonderful letters from the students about how much they enjoyed learning about what they could grow up to be.