WAL-MART STORES, INC. | Report on Company’s Involvement with Business Roundtable “Statement on the Purpose of a Corporation” at WAL-MART STORES, INC.

Status
2.32% votes in favour
AGM date
Previous AGM date
Proposal number
8
Resolution details
Company ticker
WMT
Lead filer
Undisclosed filer
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Corporate purpose
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
Shareholders request our Board prepare a report based on a review of the BRT Statement of the Purpose of a Corporation, signed by our Chief Executive Officer, and provide the board’s perspective regarding whether and how our Company’s governance and management systems can or must be altered to fully implement the Statement of Purpose, and what our Company should do if it the Statement cannot be reconciled with current practices and commitments. The report may include the Board’s perspective on benefits and drawbacks of the options considered, as well as the Board’s recommendations.
Whereas clause
Company’s Chief Executive Officer (CEO) Doug McMillon signed a Business Roundtable (BRT) “Statement on the Purpose of a Corporation,” (Statement) in August 2019, committing our Company to serve all stakeholders – including employees, customers, supply chain, communities where we operate – and shareholders.1

Existing governance documents evolved in the still legally mandated system of shareholder primacy, but the Statement articulates a new purpose, moving away from shareholder primacy and including commitment to all stakeholders. The Statement may or may not be beneficial to associate with our brand, but the Statement, as company policy, may conflict with existing corporate law unless, and possibly even if, it is integrated into Company governance documents, including bylaws, articles of incorporation, and/ or committee charters.

A stakeholder model would shift corporate focus from value creation to concerns generally referred to as Environmental, Social and Governance (ESG) issues. Walmart CEO McMillon speaks regularly of the company’s commitment to environment and social causes. He recently, for instance, penned an opinion column stressing the need to lift “the weight of institutions and structures in which systemic inequity and injustice are engrained,”2 and committed Walmart to assist in that effort.3

For consistency and the avoidance of legal risk, the Company should not endorse positions with which it has not or cannot conform itself. The Company currently engages in various actions that seem to contradict the Statement. Complaints against Walmart by stakeholders are legion and long-standing. They range from the complaint that Walmart destroys small-town shopping districts and business communities to very recent and specific allegations that, for instance, Walmart was criminally negligent in filling opioid prescriptions from “pill mill” doctors over the objections of pharmacists, causing deaths of stakeholder customers,4 and mistreats stakeholder employees and suppliers’ employees comprehensively.5

And while the Statement implies accountability to stakeholders, without clear mechanisms in place to implement the Purpose, this broadened standard could reduce real accountability to shareholders and all stakeholders generally and in effect, result in genuine accountability to none. This would violate both the letter and the spirit of the Statement.
Supporting statement
Given the Company’s inconsistent actions related to the Statement of Purpose, the Board might after full investigation consider the option of rescinding the CEO’s signature and Company’s name from that document.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For
Universities Superannuation Scheme - USS Against After careful consideration, we do not believe the proponent's resolution is in the best interests of shareholders.

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