Wal-Mart strengthens its accountability
BENTONVILLE, Arkansas - WAL-MART Stores said Monday that it is adding the former international chairman of accounting firm KPMG to its board, effective immediately.
Tim Flynn, 55, will become the board's 17th member and is also joining the audit committee.
The move comes as Wal-Mart attempts to regain shareholder trust following a bribery scandal in Mexico. In late April, The New York Times reported that Wal-Mart's Mexican unit allegedly paid millions of dollars in bribes to speed building permits and gain other favours, and that executives didn't notify authorities even after Wal-Mart found evidence of the scheme during a probe dating to 2005.
The bribery allegations have led to federal investigations in the US and Mexico, as well as a global anti-corruption compliance review by Wal-Mart. They also have spawned about a dozen shareholder lawsuits seeking changes in Wal-Mart's corporate governance and damages on behalf of the Bentonville, Arkansas, company from current and former executives and directors.
Following the scandal, some shareholders have called for the removal of several board members, including Chairman Robson Walton, CEO Mike Duke and former CEO Lee Scott. But all three were re-elected to the board at the company's annual meeting in June. Still, almost 13 per cent of votes went against Walton; 13.1 per cent against Duke and 15.6 per cent against Scott. Descendants of Wal-Mart's founder own about 50 per cent of Wal-Mart's shares, so there was little chance of activist shareholders voting out the board members. But those tallies showed unprecedented dissent.
Flynn spent 32 years at KPMG and became international chairman in 2007. He retired in 2011.
Wal-Mart shares rose 54 cents to US$75.06 ($6,600) in late morning trading after rising to an all-time high of US$75.24 earlier in the session