We are a trusted brand around the world, delivering on that trust every day by being resilient and agile in the face of challenging circumstances beyond our control.
We work to anticipate risks and help risk owners develop robust mitigation plans through our evolving enterprise risk management (ERM), business continuity, future trends monitoring and crisis management processes. We think holistically about resilience throughout the McDonald’s System, helping secure raw materials, production inputs and processing capacity in the near term, while building flexibility to enable business growth and deliver quality, value and brand trust over the long term.
Unexpected events and evolving issues, such as humanitarian crises and the impact of climate change, can impact our people and communities, disrupt operations and supply chains, damage restaurants and compromise information security. To respond to, and mitigate, such challenges, we have continuity plans that help us protect our business and consistently deliver the safe, quality food and familiar experience our customers know and love.
In 2022, our business resilience strategy covered four key areas:
- Governance and Oversight: Our ERM framework identifies, assesses and prioritizes potential strategic, financial and reputational risks with the possibility of having a sustained impact on our Company. We are always looking to incorporate new learning to improve transparency and enable better decision-making.
- Supply Chain Resilience: Effective supply chain management is vital to our success, and we have been developing and deploying technology to enhance our understanding of potential risks – allowing us to make timely decisions and activate contingencies. Looking long term, increasing our supply chain sustainability will be instrumental to ensuring its future safety and resilience.
- Technology Resilience: Increased reliance on technology throughout our business means our ability to respond quickly in the event of a disruption is vital to business continuity. Our 24/7 Business Technology Resilience team (BTR) identifies potential risks we face, then implements solutions and contingencies to mitigate impacts.
- Business Continuity and Crisis Management: Our Enterprise Business Continuity & Crisis Management Governance program works to prepare us for enterprise-level disruptions. Through an interconnected operational framework, it governs and sustains McDonald’s preparedness – connecting to and complementing existing response capabilities and protocols.
Governance and Oversight
McDonald’s ERM framework is designed to identify, assess and prioritize strategic, financial and reputational risks with the potential to have a sustained impact on our Company. We periodically review it and incorporate our learning to drive transparency and enable strategic decision-making.
Management is responsible for ERM framework design and execution, leveraging internal risk committees comprising cross-functional leadership. They meet regularly to evaluate and prioritize risk in the context of our Accelerating the Arches 2.0 strategy, which was announced in early 2023. This further escalates 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.
Supply Chain Resilience
Effective supply chain management is key to ensuring resilience which, in turn, helps us remain competitive, customer-centric, flexible, forward-looking and safe. Our objective is to build a future-ready supply chain that assures supply and encourages growth by anticipating, mitigating and adapting to risks and opportunities, while delivering against consumer expectations on quality, value and trust. Vital to a resilient supply chain is supporting and safeguarding the communities and ecosystems we rely on.
We have accelerated development and deployment of technology to enable faster decision-making and contingency activation.
In working toward making our supply chain more sustainable, 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 using regenerative beef farming methods that help protect and maintain native landscapes, improve biodiversity and sequester carbon in soils.
We believe regenerative agriculture – the process of restoring and rebuilding ecosystems – is one important tool to help actively mitigate negative climate impacts while amplifying and creating new environmental benefits. We see regenerative agriculture as an example of a risk mitigation action that sits at the intersection of supply resiliency and sustainability.
Increasing reliance on technologies means our ability to restore business-critical functions in the event of disruption remains a significant priority. An event causing damage or loss could compromise our critical functions, processes or services – creating customer, financial, operational, reputational and even human impact.
Our BTR – which sits within Global Technology – partners with McDonald’s Business, Security, Risk and Infrastructure teams. It is responsible for identifying the impact of potential losses, maintaining effective recovery strategies and implementing plans for the continuity of critical services – mitigating disaster-related impact.
BTR focuses on 24/7 availability of McDonald’s technology, maintaining business productivity and promoting investment in platforms for growth by aligning business needs with IT.
Business Continuity & Crisis Management
In 2022, our Enterprise Business Continuity & Crisis Management Governance program provided a common structure and operational framework to govern and sustain McDonald’s preparedness and resilience to enterprise-level disruption, supporting existing response capabilities at functional and market levels.
The program provides 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. It also aligns crisis management playbooks and protocols, enabling a streamlined response to disruptions, and supports continuous improvement through root cause analyses and after-action reporting.
We help ensure an effective response to enterprise-level disruption by leveraging a cross-functional team of leaders and subject matter experts.