The New York Times reports this morning that “leaders of New York City’s pension funds said Monday they would vote their 4.7 million company shares against five directors standing for re-election to the retailer’s board at its annual shareholder meeting next month.” Two of the directors opposed are Mike Duke, Walmart’s CEO, and Lee Scott, his predecessor.
The move comes in reaction to the Times piece of more than a week ago that provided an inside look at Walmart’s Mexico division, suggesting that its fast growth over the past decade was fueled by bribes, and that top management was more concerned with details not being revealed and investigations not being allowed to move forward than it was with stopping the systematic corruption and adhering to US law that forbids American companies from bribing foreign officials. Both Duke and Scott, among other senior executives, were implicated in the story and identified as both knowing about and covering up the bribery.
According to this morning’s Times piece, “Officials at the New York City pension funds said they were taking action against the Wal-Mart directors because their previous efforts to persuade the board to increase its oversight of legal and regulatory practices at the retailer were unsuccessful. In 2005, for example, after reports that Wal-Mart had hired undocumented immigrants and violated child labor laws in three states, a group of institutional investors including the New York City comptroller asked the company’s board to hire an independent firm to review its regulatory controls and report findings to shareholders. Although Wal-Mart directors met with the investor group, the group’s request for a review was rebuffed.”
It is unknown at this point whether other pension funds will follow the New York City lead.
The New York Times also reports this morning that while Walmart “has adroitly used millions of dollars in campaign contributions, charity drives, lobbying campaigns, and its work for popular causes like childhood nutrition and carbon emissions to build support in Congress and the White House,” those expenditures may not be enough to help it avoid accusations and intense examination of its business practices at home and abroad,and that “its political priorities could now be jeopardized.”
The move comes in reaction to the Times piece of more than a week ago that provided an inside look at Walmart’s Mexico division, suggesting that its fast growth over the past decade was fueled by bribes, and that top management was more concerned with details not being revealed and investigations not being allowed to move forward than it was with stopping the systematic corruption and adhering to US law that forbids American companies from bribing foreign officials. Both Duke and Scott, among other senior executives, were implicated in the story and identified as both knowing about and covering up the bribery.
According to this morning’s Times piece, “Officials at the New York City pension funds said they were taking action against the Wal-Mart directors because their previous efforts to persuade the board to increase its oversight of legal and regulatory practices at the retailer were unsuccessful. In 2005, for example, after reports that Wal-Mart had hired undocumented immigrants and violated child labor laws in three states, a group of institutional investors including the New York City comptroller asked the company’s board to hire an independent firm to review its regulatory controls and report findings to shareholders. Although Wal-Mart directors met with the investor group, the group’s request for a review was rebuffed.”
It is unknown at this point whether other pension funds will follow the New York City lead.
The New York Times also reports this morning that while Walmart “has adroitly used millions of dollars in campaign contributions, charity drives, lobbying campaigns, and its work for popular causes like childhood nutrition and carbon emissions to build support in Congress and the White House,” those expenditures may not be enough to help it avoid accusations and intense examination of its business practices at home and abroad,and that “its political priorities could now be jeopardized.”
- KC's View:
- I don’t even know what to add at this point, except to say that the dominoes will continue to fall...
