We are a trusted brand around the world, and we deliver that trust every day by being resilient and agile in the face of challenging circumstances beyond our control.
We work to anticipate risks and develop robust mitigation plans through our evolving enterprise risk management, business continuity and crisis management processes. We think holistically about resilience throughout the McDonald’s System, to help secure raw materials and processing capacity in the near term, while building the flexibility to deliver quality, value and trust over the long term.
Unexpected events and evolving issues, ranging from the impact of climate change to the humanitarian crisis in Ukraine and the ongoing COVID-19 pandemic, can impact our people and communities, disrupt operations and supply chains, damage restaurants and compromise information security. To respond and mitigate against such challenges, we have continuity plans in place that help us protect our business and continue delivering the quality food and familiar experience our customers know and love.
Governance and Oversight of Our Approach
McDonald’s enterprise-wide risk management (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 the ERM framework and incorporate learnings to drive transparency and enable strategic decision-making.
Management is responsible for the design and execution of the ERM framework. The ERM framework leverages internal risk committees comprised of cross-functional leadership, which meet regularly to evaluate and prioritize risk in the context of our Accelerating the Arches strategy, with further escalation to our CEO, Board and/or Committees, as appropriate.
Our Board exercises oversight of the ERM framework, both as a full Board and through its standing Committees. An important element of this oversight involves regular interaction among our Board and senior management regarding our risk exposures and mitigation effects, as they relate to our business strategy, operations and values.
Our 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. Our internal auditors also support risk identification and monitoring.
Supply Chain Resilience
We depend on effective supply chain management to ensure the reliable and sufficient supply of quality products. A resilient supply chain drives competitive advantage and business growth by successfully anticipating and recovering from disruptions, proactively adjusting to external change, consistently assuring supply and delivering against expectations on quality, value and trust. Importantly, a resilient supply chain also works to safeguard the communities and ecosystems that we rely on. This is how we strive to remain competitive, customer-centric, flexible, forward-looking, safe and resilient.
While many of the products we sell are sourced from a variety of global suppliers, some rely on a more limited supplier base, which may increase our reliance on those suppliers. We can also be impacted by supply chain interruptions caused by shortages, unexpected increases in demand, transportation issues, labor issues and weather-related events, natural disasters, hostilities or other factors beyond our control. We have accelerated the development and deployment of technology with the goal of having the information necessary for fast decision-making, activating contingencies where needed. Due to our investments in a more sustainable supply chain, we have helped to minimize supply chain interruptions despite challenges.
We apply years of effective contingency planning experience to build greater resiliency into our supply chain, from farm to restaurant. We do this by strengthening the identification and mitigation of risks, and activities that help to drive the sustained availability of each of our commodities. We also assess the necessary trade-offs between competitiveness and customer and stakeholder expectations to inform our long-term sourcing strategies.
By working alongside a diverse, global network of suppliers, nongovernmental organizations (NGOs) and scientists for over a decade, we’ve also collaborated with farmers and ranchers to help support long-term livelihoods and resiliency. This includes embedding beef farming methods that help protect and maintain native landscapes, improve biodiversity and sequester carbon in soils. We believe that regenerative agriculture – the process of restoring and rebuilding ecosystems – is an essential way to actively mitigate negative climate impacts, while also amplifying and creating new environmental benefits.
With the increasing adoption and reliance on information technology within the McDonald’s System, the capability to restore the availability of business-critical functions in the event of disruption continues to be a significant business priority. An event causing damage or loss could compromise McDonald’s ability to provide critical functions, processes or services, which has the potential to cause customer, financial, operational, reputational and even human impact.
Partnering with the McDonald’s business and infrastructure teams, our Business Technology Resilience team (BTR) within Global Technology is responsible for ensuring the necessary steps are taken to identify the impact of potential losses, maintain viable recovery strategies and implement plans to ensure the continuity of critical services. This reduces McDonald’s exposure to the impacts caused by a disaster.
BTR is focused on 24/7 availability of McDonald’s technology, maintaining business productivity and promoting investment in platforms for growth by aligning business needs with IT.
Our Approach to Business Continuity and Crisis Management
The Enterprise Business Continuity & Crisis Management Governance program provides a common structure and operational framework to govern and sustain McDonald’s preparedness and resilience to enterprise-level disruption. This program connects with and supports existing response capabilities at McDonald’s functional and market levels.
The program provides increased governance infrastructure that supports cross-functional transparency and consistency and offers greater resilience to disruption through proactive business continuity planning and scenario-based exercises.
It also aligns crisis management playbooks and protocols to enable a streamlined response in the event of disruption, and supports continuous improvement through root cause analyses and after-action reporting.
To help ensure an effective response to enterprise level disruption, we leverage an Enterprise Crisis Management team consisting of cross-functional leaders and subject matter experts.