Business Resilience
We take action to help ensure we are building a better business and a more trusted brand for generations to come by being resilient and agile in the face of challenging circumstances beyond our control.
Our Strategy
We work to anticipate risks and help risk owners develop robust mitigation plans through our evolving enterprise risk management (ERM) framework, business continuity governance and crisis management processes. Unexpected events and evolving issues impact our people and communities, disrupt operations and supply chains, damage restaurants and compromise information security. To proactively respond to, and help mitigate, such challenges, we have continuity plans that help us protect our business and consistently deliver the quality food and experiences our customers know and love.
As of 2023, our business resilience strategy covers four key areas:
- Governance and oversight of our approach: Our ERM framework identifies, assesses and prioritizes potential strategic, financial and reputational risks that could possibly have a sustained impact on our Company. Our Business Continuity Governance framework aims to help us prepare for potential disruption in a consistent and connected way. We are always looking to incorporate new learnings and to enhance strategic decision-making.
- Supply chain resilience: We think and act holistically when it comes to driving resilience, considering the whole McDonald’s System. Effective supply chain management is vital to our success and, as such, we are developing and deploying technologies to enhance our understanding of potential risks – allowing us to make more timely decisions and activate contingencies. In the long term, increasing our supply chain sustainability will be instrumental to ensuring its future resilience.
- Technology resilience: Increased reliance on technology throughout our organization means our ability to respond quickly in the event of a disruption is vital to business continuity. Our Applied Resiliency team identifies potential risks, then implements solutions and contingencies to mitigate impacts.
- Crisis management: Our Enterprise Crisis Management program allows us to respond to enterprise-level disruptions in a more rapid and coordinated way, reducing impact and protecting the brand. A dedicated and trained team representing all functions and segments supports McDonald’s overall preparedness and responsiveness – connecting to and complementing existing response capabilities and protocols across markets and functions.
Our Approach
Governance and Oversight
McDonald’s ERM framework is designed to identify, assess and prioritize strategic, financial and reputational risks that could possibly have a sustained impact on our Company. We periodically review it and incorporate our learning to enhance strategic decision-making.
Management is responsible for ERM framework design and execution, leveraging internal risk committees comprising cross-functional leadership. It meets regularly to evaluate and prioritize risk in the context of our Accelerating the Arches strategy. The framework includes further escalation to our CEO, Board and/or committees, as appropriate.
Our Board has oversight of the ERM framework, both as a full Board and through its standing committees. This involves regular interaction between our Board and senior management regarding risk exposures and mitigation effects as they relate to our business strategy, operations and values. The Board also annually reviews strategic and enterprise risks and considers, among other items, our mitigation and overall strategy, competitive landscape, capital structure and management succession planning. Internal auditors also support risk identification and monitoring.
Along with our ERM framework, our Business Continuity Governance framework helps provide increased governance infrastructure to support cross-functional transparency and consistency, as well as greater resilience to disruption through proactive continuity planning and scenario-based exercises.
Supply Chain Resilience
Effective supply chain management is key to ensuring resilience, which helps us remain competitive, customer-centric, flexible and forward-looking. For example, it also ensures we remain safe in how we maintain food safety, quality and facility human rights standards. Our objective is to build a future-ready supply chain that assures reliable sourcing and encourages growth by anticipating, mitigating and adapting to risks and opportunities. Alongside this, it must deliver against consumer expectations on quality, value and trust. To fortify our supply chain, we have been developing and deploying technology to enable faster decision-making and contingency activation and to support our long-term growth.
In working toward a more sustainable supply chain, we are helping minimize supply interruptions. As well as working alongside a diverse, global network of suppliers, nongovernmental organizations (NGOs) and scientists for over a decade, we’ve collaborated with farmers and ranchers to support long-term livelihoods. This includes encouraging them to use regenerative beef farming methods that help protect and maintain native landscapes, improve biodiversity and sequester carbon in soils.
Read how we’re advancing regenerative agriculture principles.
Technology Resilience
Increasing reliance on technologies means our ability to restore business-critical functions – and prevent impacts to them – in the event of disruption is a significant priority. The Applied Resiliency team, which sits within Global Technology, partners with McDonald’s Business, Security, Risk and Infrastructure teams.
The Applied Resiliency team evaluates infrastructure and application criticality from the standpoint of customer, financial, operational, reputational and legal impact in the event of extended service disruption, thus determining the level of resiliency controls and recovery strategies needed for key systems.
Applied Resiliency supports integration of available technology to meet the needs of McDonald’s business and to help the Company reliably function on a global basis.
Crisis Management
As we evolve the Enterprise Crisis Management program, it will offer a common structure to support McDonald’s preparedness and ability to respond to enterprise-level disruption while enhancing response capabilities at functional and market levels. Once live, the program, aligned to our previous crisis management playbooks and protocols, will provide increased infrastructure, enable faster responses to disruptions and support continuous improvement through after-action reporting.
Our cross-functional team of leaders and subject matter experts helps ensure an effective response to enterprise-level disruption.
