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« What does it take to change the world? | Main | Legal advice privilege survives UK test, with caveats »
Wednesday
Dec042013

Wal-Mart should lead in ethics, not just compliance

To balance the excitement over recent reports of the DOJ’s tough investigation and a new CEO at Wal-Mart, we could consider what compliance officers are taught by the SCCE: Lawful but awful does not mean everything is OK; it’s a wake up call and a test of the company’s identity.

Whether Wal-Mart’s past conduct was “lawful” or not remains to be seen. At this juncture, however, I am struck by the difference between the DOJ’s resolve to serve the public in the criminal enforcement sphere verses Wal-Mart’s reluctance to fulfill its ethical responsibilities to the public. Those responsibilities don't depend upon Wal-Mart's day in court and have nothing to do with the presumption of innocence relevant to criminal activity.

Wal-Mart's s stores, its global supply chain, its brand name and its status as the icon of business success affect the lives of literally millions of people in hundreds of nations around the world, many of them terribly poor, or the “working poor,” or in the rising, struggling middle class. These people hate corruption, and they want change. Wal-Mart should acknowledge its role and responsibility for the change desperately desired by its stakeholders.

Wal-Mart's failure to become transparent, to engage in a dialog, is troublesome. So far, the company has only been reactive to the demands of the criminal justice system and media damage control.  Why not open the door to a public roundtable of what went wrong ethically and what needs repair? What structural changes to business and business training does Wal-Mart, the icon of business success, recommend so the world feels Wal-Mart is a powerful ally for anti-corruption, not a reluctant defendant in the dock?

To the new CEO, consider a study now, not later, of what Siemens did to emerge from its scandal. Siemens did not circle the wagons awaiting the legal conclusions of all of the criminal allegations against its executives. Rather it showed its change of heart by a public admission of error and taking actions dictated by remorse, including nurturing innovations in anti-corruption projects. What Wal-Mart is doing now is not illegal stonewalling, but is it displaying an ethical attitude toward the public that makes Wal-Mart all that it is.

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Michael Scher is a contributing editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He is affiliated with ethiXbase, the owner of the FCPA Blog. He can be contacted here.

Reader Comments (1)

Wal-Mart does not have "stakeholders"; it has shareholders. Those shareholders expect Wal-Mart's board and management to squeeze as much profit as (legally) possible from the "terribly poor, ... the 'working poor,' [and] the rising, struggling middle class".

I would be interested in data to support that the typical Wal-Mart shopper "hate[s] corruption" and "want[s] change". My guess is that the typical shopper is more interested in cheap prices than in global corruption.

I am a compliance professional who works in the real, not so pretty, world. My job, first and foremost, is to keep a company out of trouble and out of the press. The capitalism of a publicly-traded company is not for the faint of heart or the bleeding heart.
December 8, 2013 | Unregistered CommenterReg Reader
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