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Wal-Mart: Desperately seeking ethics
The world's largest retailer is trying to get out in front of critics and project a reputable image.
 NEW YORK (FORTUNE) - Wanted: Corporate executive to serve as a point person on business ethics at the world's largest retailer. Law degree a plus, spotless reputation a must. Some travel required. Candidate must also not mind living in northwest Arkansas. Does that sound like the ideal job for you? If so, contact the headhunters at Martha Montag Brown & Associates, who are seeking to find Wal-Mart's new director of global ethics.
That Wal-Mart (Research) needs to beef up its ethics organization is not too surprising. The Bentonville, Ark. behemoth has been bloodied on several fronts lately -- an $11 billion class-action discrimination lawsuit, employee pay and health benefits, and former vice chairman Tom Coughlin's alleged expense account padding have all provided ample fodder for the retailer's growing chorus of critics. In mid-January, Maryland legislators voted to require large companies like Wal-Mart to provide a minimum level of employee health care, and other states are mulling similar moves. To counter its critics, Wal-Mart has launched a multi-pronged PR offensive to spotlight what it views as the retailer's positive impact on its 1.6 million workers and in the communities where it operates. The effort includes coaxing former United Nations ambassador Andrew Young to serve as the public face of Working Families for Wal-Mart, a group that aims to defend Wal-Mart's business practices. But Wal-Mart's decision to hire a director of global ethics is more than a defensive tactic -- it's an attempt get out in front of critics and project a reputable image at home and abroad. "Wal-Mart has a ton of critics and this is one effort to show that they are taking this seriously," says Andrew Wicks, co-director of the Olsson Center for Applied Ethics at the University of Virginia's Darden business school. The ethics director, once hired, will oversee a team of about ten staffers inside Wal-Mart's Global Ethics Office, which the retailer created in 2004 to "advance the company's ethical, values-based culture," according to the job posting. The job spec also details a veritable laundry list of responsibilities, from developing a global ethics strategy to "policy refinement" to overseeing an ethics hotline, where employees can report violations of corporate policies. Having a say in Wal-Mart's corporate policies suggests that the position will be more than window dressing. "The key is not just to have the role, but what you do with it once you have it," says Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. Even more crucial, the job will include "frequent and informal" interactions with senior corporate officers, "up to and including" CEO Lee Scott, according to the job spec. "You have to have the commitment of the CEO," says Wicks. "If not, this is just like the ethics code at Enron." But whom should Wal-Mart hire? The headhunters aren't talking, but retail and ethics experts contacted by FORTUNE suggested everyone from former Federal Reserve chairman Alan Greenspan to Sherron Watkins, the Enron whistleblower. "There isn't a simple answer to the question," says Don Delzell, a partner at consultancy Retail Advantage. Most corporate ethics officers are attorneys, as legal compliance issues comprise a good portion of the job. (The job itself first appeared in the 1980s, in response to fraud in the defense industry. It later moved to healthcare and other highly-regulated industries before Enron and other corporate calamities made corporate ethics departments de rigueur.) Joe Grundfest, a Stanford law professor and former commissioner of the SEC, suggests that Wal-Mart hire a lawyer with a theological background. "That would be a very interesting combination," he says.
And why not tap into a higher power? These days, Wal-Mart could use all the help it can get. |
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