Ethics and Corporate Governance in Wal-Mart

Ethics and Corporate Governance 1
ETHICS AND CORPORATE GOVERNANCE
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Ethics and Corporate Governance 2
Corporate Governance in Wal-Mart
General Management Issues
For any business organization to succeed, it is vital that it establishes a robust framework for its
corporate governance. Therefore, the creation of the “Wal-Mart Board" proves to be one of the
essential assets that the company possesses (Cobb, 2014). The asset is strategically vital in
oversight provision, governance, shared value delivery, and ensuring that the company operates
according to the laid mission and vision. As the manager of HRM Department, I am quite aware
that the company’s board meet five to six times every fiscal year to review developments and
issues that would most likely affect the operations of the company, act in matters of approval, as
well as taking part in processes of strategic planning (Brunn, 2016).
a) Structure of leadership
The leadership framework of Wal-Mart has three main categories, the CEO, Chairman, as well
as the Lead Independent Director. The work of the chairman is to provide oversight for the
board. Other related duties may, however, include presiding and governing meetings carried out
by shareholders and the board as well as counseling the CEO and managers on how to
appropriately handle business operations (Bruton, 2012). On the other hand, the Lead
Independent Director is charged with performing board evaluations annually, reviewing business
agendas, as well as presiding over business meetings among others. The most suitable candidate
for this position is elected every year by directors that are independent of the board. On the other
hand, there is the CEO who leads the company into performing every business operation. The
duties of CEO comply with general management responsibilities such as supervision and

Ethics and Corporate Governance 3
execution of sales and marketing tasks. All the same, the board is composed of seven committees
including:
- The Audit Committee
- CMDC (Compensation and Management Development Committee)
- The Executive Committee
- The Global Compensation Committee
- The Governance and Nominating Committee
- The Finance and Strategic Planning Committee; as well as
- e-Commerce and Technology Committee
As recommended by the New York Stock Exchange body, most of the Wal-Mart’s directors are
independent workers. Therefore, as listed in New York Stock Exchange body’s provisions,
management exceptions are provided to "controlled organizations," Wal-Mart will not rely on
such exemptions because it is confident that with most of its board members being independent,
a long-term shareholder interest is promoted (Coffman, Freire, Heaver and Soltis, 2012). The
governance and strategic oversight, for instance, ensure that the board gets entrusted with matters
that are sensitive to the company. All the committees highlighted above are chaired by directors
that are independent. Such is because the committees are vital components in the overall
operation of the company (Bustillo, 2011). Therefore, every committee is given access to
authority and mandate to choose and retain independent consultants and advisors.
On the other hand, Wal-Mart's committees are ruled by principles or a scribbled charter with
outlined roles for every position in the company. The Governance and Nominating Committee,
for instance, is charged with the provision of guidance and oversight to the entire corporation.

Ethics and Corporate Governance 4
The committee also defines the environment in which Wal-Mart operates including the
governance and social aspects of such environment (Conor, 2014).
b) The composition of the Board
Many global research activities have noted that business organizations face a lot of issues
regarding their business operations. Such management hurdles result from factors like
technology, globalization, shifting or changing demographics among other social trends. As a
result, the needs of clients are slowly getting reshaped while competition stiffens. Therefore,
Wal-Mart has realized that having a diverse board and operational team is a crucial functional
factor that would encourage success. Apart from that, the company will also be in the sole
position of providing its customers with quality goods and services. As the HRM Department
manager, I believe that delivering high-performance starts with management efficiency. Such
would also lead to improving business performance as well as the engaged associate base.
Therefore, Wal-Mart ensures that its shareholders are provided with an opportunity of choosing,
annually, independent directors who will oversee the general performance of the corporation
(Euromonitor, 2014).
Wal-Mart is also different from other corporations in the sense that it has a Corporate
Governance Guidelines. The Corporate Governance Guidelines has policies and principles of
governance. For instance, it is evident in the Corporate Governance Guidelines that independent
directors are given a term limit of 12 months. With the Corporate Governance Guidelines, the
board is confident that the framework will provide and improve the levels of discipline in the
processes of board refreshment (Gangar, 2013). Every policy, structure, or strategy put in place
to guide Wal-Mart in its operations also ensure that the corporation achieves an expertise mix