Uber board agrees governance reforms and Japanese investment

Violet Tucker
October 6, 2017

Uber's board of directors has unanimously voted to move forward with a proposed investment by SoftBank and Dragoneer Investment Group.

The directors also chose to pursue governance changes at Uber "that would strengthen its independence and ensure equality among all shareholders", it said, citing a company statement. The move comes after numerous scandals that have threatened the firm's reputation, including a lawsuit by investors against its former CEO, Travis Kalanick.

As a secondary investment move, the Japanese company would put out an open offer to buy 14 percent to 17 percent of outstanding shares from large investors at a discounted price, the source said. One being expanding the board of directors in the company from 11 now to 17 directors.

As part of Uber's transformation, six additional directors will be added to the current 11-member board: three independent, one new chair and two more from SoftBank.

Uber's CEO is coming to London in the hope of defusing a crisis in one of the company's biggest markets.

It's not clear whether the board chose to strip the shares of their special voting power, or if the board devised a different method to "ensure equality among all shareholders", as it said in a statement provided to Business Insider on Tuesday.

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An earlier proposal floated by Uber and Goldman Sachs had called for additional moves that would have diluted Kalanick's influence. But during the meeting, Uber's board members voted to drop the special super-voting power of class B common shares and preferred shares - Uber's two stock categories. "However, then Khosrowshahi would have to make sure Uber does change, which might be a tall order". Khosrowshahi was taken by surprise on Friday when Kalanick appointed two corporate titans - former Merrill Lynch CEO John Thain and former Xerox Corporation CEO Ursula Burns - to the board with little notice.

A new provision also makes it more hard for company leadership to fire the new CEO, Dara Khosrowshahi, before the planned IPO-they would need to vote by a two-thirds majority to make such a change. The reforms appear to be created to take power away from former chief executive Travis Kalanick, who resigned in June following pressure from shareholders over sexual harassment claims and other scandals but remains on the board. Instead, all shares in Uber will have one vote.

Uber CEO Dara Khosrowshahi, who was in London Tuesday to meet with Khan administration officials about reinstating the license, has tried to address concerns about the company's operating policies.

The board's actions are "a major step forward in Uber's journey to becoming a world class public company", Kalanick said in a statement.

Khosrowshahi is juggling the requests from TfL while a boardroom battle simmers back in San Francisco with former CEO and co-founder Travis Kalanick.

Other reports by Guamnewswatch

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