Walmart is now the world's living laboratory for compliance
Wednesday, May 21, 2014 at 7:28AM
Michael Scher in China, India, Jay Jorgensen, Latin America, Siemens, Walmart

Image courtesy of WalmartAfter two years of investigation, Walmart's audit committee has released the company's Global Compliance Program Report on Fiscal Year 2014.

The Report’s description of Walmart’s new compliance program is stunning and deserves line-by-line scrutiny by the compliance profession. It’s a complex, “living laboratory” for compliance innovations. And there's the big picture: After extensive risk assessments in 2013, Walmart has prepared an ongoing multi-year plan to challenge the status quo of global corruption.

A copy of the Report is available here.

Walmart’s new SVP and Global Chief Compliance Officer, Jay Jorgensen, explained the company’s turn-around attitude toward compliance in a candid two-part interview focused on the Report’s three sections: people, policies and systems, particularly innovative technology. Former CECO and commentator Donna Boehme sums it up, “Make no mistake these are big reforms.”

The Report, a summary, is far from self-explanatory. It raises questions we should seek to clarify with Walmart, or by observation, in the coming year regarding the following major points:

Walmart has launched something new and important in the world of global compliance program management and innovation. By this time next year, they will have another year’s worth of compliance results to evaluate. What works and what does not work can be tested not in academic or blogger debates, but in the arena of global business competition and corruption risks. Starting now, compliance professionals will benefit from catching up to what Walmart did in 2013-14 and tracking results and innovations in 2014-15.

Beyond the details in the Report, there is the big picture of the challenge facing Walmart’s compliance system. The company is the world’s biggest retailer, with over $460 billion in revenues in over 20 countries, including most of Latin America, China, India, and other countries with high corruption risks. Without saying it explicitly, Walmart is committed, like Siemens (Only Clean Business is Siemen’s Business), to doing only bribe-free business. Walmart is not running a world-class compliance program just for show; it will detect and must turn down deals and partners involved in bribery.

Will revenues and profits go down? How will the Board and shareholders react? How will the company keep its resolve -- or be incentivized by the compliance system of checks and balances -- to lead the business world and to see this transformation to fruition?


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.

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