Issues | Corporate Culture

Corporate Culture"Is Wal-Mart a Christian company? No," said former Wal-Mart executive Don Soderquist at a recent prayer breakfast. "But the basis of our decisions was the values of Scripture."

Wal-Mart, the lighthouse of the Ozarks according to Sam Walton, wants everyone to believe it is the all-American company. But, would an all-American company give misleading testimony to the FDIC? Oppose the release of health care statistics? Secretly watch the shopping habits on their customers? Americans should expect more than corporate corruption and petty politics from the biggest retailer in the world.

Misleading Government Officials

When truth-telling clashes with Wal-Mart's bottom line, it's often honesty that ends up on the sidelines:

  • Giving Inaccurate Testimony to FDIC. In an effort to advance its bid to open in-store 'industrial' banks, Wal-Mart gave regulators misleading statements about whether the company could muscle out the traditional banks already based in its stores. Wal-Mart told the Federal Depository Insurance Corporation -- the nation's bank regulator -- that long-term leases with banks blocked Wal-Mart from moving into commercial banking, because the "leases signed by banks were renewed at the discretion of the banks alone." After a report by Reuters, however, forced Wal-Mart to admit that leases with at least some banks could be renewed only if both the banks and Wal-Mart approve. Rep. Paul Gillmor (R-Ohio), a member of the House Financial Services Committee, said: "We are beginning to see a pattern of misleading or false statements from Wal-Mart with regard to their interests in branch banking." [Reuters, 5/9/06; Cox News Service, 5/11/06]
  • Sanctioned for Unethical Trial Practices. An October 1999 article in Corporate Counsel magazine cited "two dozen cases during the past 18 months" in which Wal-Mart had been sanctioned for discovery abuse, including one $18 million fine. In Texas, a judge who imposed sanctions for discovery abuse said: "Unfortunately, nefarious conduct is all too common in lawsuits in which Wal-Mart is a party." [Wilson v. Wal-Mart Stores Inc., 199 F.R.D. 207, 208 (S.D. Tex. 2001); ABA Journal, March 2002]

Meet Wal-Mart's Board of Directors

 Board of Directors 

 

This report, released on the eve of Wal-Mart's 2006 Shareholders' Meeting, includes background information on Wal-Mart's 13 directors and is intended as a reference for anyone looking to learn more about the governing board of the world's largest retailer. PDF >


Covering Up Information

Sunshine can be the best disinfectant -- a fact that speaks multitudes about Wal-Mart's preference for the shadows:

  • Refuses to Release Median Wage. To defend its treatment of workers, Wal-Mart releases statistics on its average hourly wage for full-time employees. The store has never, however, published its median wage -- a data point that would give a clearer sense of what workers earn. Instead, the store uses misleading language that masks the fact that managers earn higher wages than floor workers -- a fact that skews the "average" wage of 'store associates' -- and refuses to release wage levels for specific job functions. [Walmartfacts.com]
  • Opposed Release of Health Insurance Statistics. In 2005, Minnesota legislators introduced a bill that would require state agencies to gather and publish data about whether the employees and family members of Wal-Mart and other large employers use the state's public assistance programs. Wal-Mart sent two officials to St. Paul to lobby against the bill, and sent legislators a two-page letter stating the company's opposition to the law. [Minneapolis Star Tribune, 6/2/05]
  • Misled Legislators About Pushing Employees to Public Assistance. In a letter to state legislators, Wal-Mart wrote that they "provide the mechanism for associates to remove themselves from public assistance" and that they "certainly don't encourage our associates to apply for public health benefits." Documents bearing the Wal-Mart logo, however, revealed that Wal-Mart issues printed "Instructions for Associates" that tell employees how to sign up for public assistance. Wal-Mart CEO Lee Scott has said: "There are government assistance programs out there that are so lucrative it's hard to be competitive, and it's expensive to be competitive." [Wal-Mart Letter to State Legislators, 6/20/05; Wal-Mart Social Services Documents; St. Louis Post Dispatch, 4/6/05]
  • Silences Suppliers About Wal-Mart Relationships. "Wal-Mart has imposed a wall of silence around its operations, its relationship with its suppliers, even around the operations of its suppliers ...The silence is backed by muscle, the threat of losing business with Wal-Mart." [Charles Fishman, The Wal-Mart Effect, 2006]
  • Uses Front Group to Lobby Against Port Security. Through a lobbying group, the Retail Industry Leaders Association (RILA), Wal-Mart opposed several port-security measures -- including proposals to make shipping containers more secure, to beef up inspections and to provide more prompt cargo information. According to Congressional Quarterly: "Why would Wal-Mart, the world's largest retailer, with its recently expanded in-house lobbying team, need to join a trade association? As it turns out, for largely the opposite reasons that other companies cite. The retail giant doesn't want to draw attention to its legislative agenda; it wants to use its membership in the Retail Industry Leaders Association (RILA) as a buffer." [Reuters, 4/6/06; Los Angeles Times, 4/6/06, CQ Weekly, 5/1/06]

Deceiving Customers

The customer, as the proverb goes, is always right -- except when that means taking statements by today's Wal-Mart at face value:

  • Despite Privacy Pledge, Collects Enormous Amounts of Data About Customers. On its Web site, Wal-Mart posts a privacy policy that states: "We take reasonable steps to protect your personal information. We maintain reasonable physical, technical and procedural measures to limit access to personal information to authorized individuals with appropriate purposes." However, Wal-Mart amasses more data about the products it sells and its shoppers' buying habits than anyone else -- so much so that privacy advocates worry about the potential for abuse. The data are gathered item-by-item at the checkout aisle, then recorded, mapped and updated by store, by state, by region.

    By its own count, Wal-Mart stores 460 terabytes of data on customers at its Bentonville headquarters. To put that in perspective, the Internet contains only half as much data, according to experts. Katherine Albright, the founder and director of Caspian - a consumer advocacy group, says: "People don't know that Wal-Mart is capturing information about who they are and what they bought, but they are also capable of capturing a huge amount of outside information about them that has nothing to do with their grocery purchases. They can find out your mortgage amounts, your court dates, your driving record, your creditworthiness." [New York Times News Service, 11/14/04]
  • Misled Customers About Sources of Products. "NBC ...took a hidden camera into a Wal-Mart store, where winter jackets for children made in Bangladesh were displayed under 'Made in the USA' signs. NBC said it found the same practice in 11 other Wal-Mart stores in Florida and Georgia." [UPI, 12/22/92]
  • Secretly Watches Consumers' Shopping Activities. "Shoppers in a suburban Tulsa, Okla., Wal-Mart were unwitting guinea pigs earlier this year in a secret study that two of America's largest corporations never expected you'd know about. In the study, uncovered by the Chicago Sun-Times, shelves in a Wal-Mart in Broken Arrow, Okla., were equipped with hidden electronics to track the Max Factor Lipfinity lipstick containers stacked on them. The shelves and Webcam images were viewed 750 miles away by Procter & Gamble researchers in Cincinnati who could tell when lipsticks were removed from the shelves and could even watch consumers in action." [Chicago Sun-Times, 11/9/03]

What You Can Do

  • Join thousands in signing the Handshake with Sam agreement and calling on Wal-Mart to adopt higher standards of corporate ethics
  • Tell friends and family about Wal-Mart's corporate culture -- and how the