Dance Skeletons, Dance!

It was the Irish playwright, author and political activist George Bernard Shaw who has been quoted as saying, “if you have skeletons in your closet, better bring them out and make them dance.”  I don’t know Shaw’s reason or context for this remark but it communicates an important and significant point to me:  Whether company, firm or individual, when we become aware of unacceptable behavior, egregious negative circumstances, or any harmful trust-breaking situations, the earliest recognition and address of the matter is the most effective approach.  The antithesis of that approach is summed up by what I learned in Sunday school:  “Be sure your sins will find you out.”

The recent Fortune 500 lists Walmart as America’s largest company with revenues exceeding $400 billion.  This massive retailer employs over 2 million people and supports tens of thousands of suppliers.  Its stock is owned throughout the world and held by the largest pension funds in our country.  Walmart is a tremendous community participant and contributor and is viewed by many as a model corporate citizen.  I could list many other laudable virtues of this giant retailer but you get the point—Walmart impacts the lives of many and is a positive influence throughout the world.

Recently the New York Times reported the results of an investigation which revealed that Walmart’s Mexico subsidiary (the largest foreign operation with 431 stores) paid $24 million in bribes to local officials to avoid complying with regulations and thus to illegally obtain construction permits for new stores.  The report goes on to state that a Walmart internal inquiry into the matter had been suppressed at corporate headquarters in Arkansas. 

It’s too early for the general public—people like you and me—to know the depth and extent of the problem.  We are aware of reports that Walmart named a former U.S. attorney for the Western District of Arkansas as global Foreign Corrupt Practices Act (FCPA) compliance officer earlier this year.   In addition, the retail giant disclosed the lawyers, law firms and accountants helping with its ongoing investigation into the Mexican bribery allegations and its worldwide review of compliance.  Walmart’s audit committee is overseeing the investigation with both the investigating law firm and Big 4 auditor, Deloitte.

I’m pleased that Walmart is now addressing the issue but I, perhaps like you, am outright flabbergasted that it took the New York Times to make the Walmart skeletons dance.  If I were to ask you to name countries in the world where you might suspect bribery of government and company officials is rampant I dare say most of us would probably include Mexico.  Actually there is an annual public disclosure by Transparency International of its Corruption Perception Index, a listing in rank order of the perceived most corrupt countries in the world, that would confirm what many of us suspect.   Mexico is not the worst on the Index, ranking as number 100 out of 183 (183 being the worst).  The U.S. ranks 24th. 

 An obvious point to me is why Walmart all of a sudden seems shocked at the bribery allegations.  You’re doing business in a high risk country; shouldn’t you be aware of certain known or perceived problems of doing business there?  Do any of Walmarts executive officers read the papers, watch TV, browse websites?  Due diligence on the front end of doing business in any country is I’m sure a part of what Walmart does.  How did they miss the obvious in Mexico?  Are they now reviewing other questionable environmental conditions in other countries?

Walmart is now into its investigation phase that typically leaves the public with a cynical and doubtful view of the process and the appropriate outcome.  I’ve already started hearing the street talk:  “they’ll slow walk this one”; they’ll fire a few underlings”; “they’ll lawyer up, spend a lot of money and then business as usual.”  I hope not.

I have some advice for Walmart and it won’t cost them a dime.  Walmart won’t get this from their lawyers, their highly paid consultants, or their public relations and positive image folks but they will get it from the people who matter most—customers like me.  My simple but hard-to-swallow advice: DANCE!  

D ig deep into all allegations, known and suspected malfeasance anywhere in Walmart land.  Satisfy yourselves that in the high risk countries in which you operate there are systems of internal controls which will alert you to inappropriate, unethical or criminal activities.

A ccountability is essential.  Make it known that no one, absolutely no one in Walmart will be exempt from being held accountable for acts of omission and commission.  Get tough; be assertive and consistent on discipline.

N ever underestimate the power of the public trust!  Immediately begin a positive program of restoring trust, not damage control but proactive messages and actions about what Walmart is doing to make sure that business practices are legal, ethical and socially enhancing.

C ommit to expectations of a trusting public not simply cooperating with all investigative and law enforcement officials but leading them in collaborative fashion to help you restore trust.

E xalt and model integrity from the executive quarters all the way through the company in every country in which you operate.  Remind your customers in every store what you stand for and invite your customers to also be alert to anything which would detract from your trust-driven intentions.

Yes, “DANCE” is perhaps overly simplified but it’ll work not as some short-term fix but as a longer term, more permanent approach to ensuring the public that Walmart is serious about going forward, fervently addressing its problems.  Walmart is a model in many communities.  The company now because of these latest allegations has a tremendous opportunity to do the right thing and demonstrate what others in similar kinds of situations might do. 

Will Walmart lead?  Will Walmart make their skeletons DANCE?

Ad astra per aspera