Walmart Global Compliance Action Steps

• For many years, Walmart has been working diligently to strengthen its compliance programs and is committed to having a strong and effective global compliance program in every country in which it operates.

• Walmart’s corporate culture has been built on a foundation of acting with integrity and the highest ethical standards. The company has the same high standards of integrity for every associate – regardless of his or her position – and everyone is held accountable for those standards.

• Recently, Walmart has made improvements to its compliance programs around the world and has taken a number of specific, concrete actions with respect to its processes, procedures and people.

• Walmart aligned its corporate structure to have the global compliance, ethics, investigations and legal functions under one organization, reporting to its Executive Vice President and Chief Legal Officer Jeff Gearhart. This move will allow the company to leverage its strengths in these key disciplines around the world, resulting in closer coordination and integration.

• Walmart named Jay Jorgensen to the new role of Senior Vice President and Global Chief Compliance Officer, responsible for a global compliance organization reporting to Executive Vice President, General Counsel and Corporate Secretary Jeff Gearhart. This position will lead Walmart’s global compliance strategy and have oversight of the compliance functions in every market in which the company operates. The role will also provide strategic counsel to the company’s senior management team and interact directly with the audit committee of the Board of Directors. Jay joins Walmart from the law firm of Sidley Austin in Washington, D.C., where he served as a partner and litigator, consulting with global companies and helping to create compliance programs. In addition to his work at Sidley Austin, Jay has been a law clerk for William Rehnquist, Chief Justice of the U.S. Supreme Court, and Judge Samuel A. Alito at the U.S. Court of Appeals for the Third Circuit. He holds both a bachelor’s degree and Juris Doctorate from Brigham Young University. 

• The company named Daniel Trujillo to the newly created position of Senior Vice President and Chief Compliance Officer – Walmart International, effective Oct. 29, 2012. A seasoned professional with significant experience in the compliance arena, Daniel’s hiring is part of the company’s ongoing efforts to enhance Walmart’s international compliance programs. In this new role, Daniel will be responsible for reviewing, assessing and integrating Walmart’s compliance efforts outside of the U.S.; leveraging talent, resources and compliance best practices across its international markets; and ensuring appropriate training, monitoring, education and audit of the company’s international compliance functions. Daniel joins Walmart after spending 15 years with Schlumberger, where he most recently served as the Deputy General Counsel and Director of Compliance. During his time with Schlumberger, Daniel also had a variety of international experiences living abroad and working for the company’s Latin America and continental Europe and Africa businesses.

• The company hired Tracy Reinhold into the newly-created position of Vice President of Global Investigations. This position is accountable for the company’s global investigations strategy and will report to the Senior Vice President for Global Security, Aviation and Travel. The responsibilities include building a centralized investigation Center of Excellence team, establishing global oversight and governance for investigations, and working with the Walmart U.S., Sam’s Club, Global eCommerce and Walmart International businesses regarding proactive investigation measures. Prior to joining Walmart, Tracy spent more than 20 years with the Federal Bureau of Investigation in a variety of capacities. His last position was Associate Executive Assistant Director of the National Security Branch.

• Walmart has made enhancements to strengthen how it reports and investigates allegations of wrongdoing and has established a clear protocol for global investigations that include corporate oversight and engagement. The protocol sets forth the global criteria that requires immediate notification to the Global Ethics Office at the Corporate Home Office in Bentonville before any investigation is commenced. The Global Ethics Office will determine whether the company’s corporate-level investigative resources are appropriately engaged.

• The company has added a series of new escalation and review protocols for the purpose of managing global investigations consistently and independently, conducting investigations rigorously and addressing findings appropriately. In addition, every country has communications channels in place to report actual or potential issues, and protocols established to notify senior management for timely resolution and proper remediation.

• Walmart created a new Global FCPA Compliance Officer position based in Bentonville, Ark., and appointed Tom Gean to the role. Tom has responsibility for compliance with the FCPA in every market around the world and will oversee FCPA compliance personnel based in the international markets. Tom joined Walmart’s Legal department in 2004. In 2001, he was nominated by President George W. Bush and confirmed by the U.S. Senate to be U.S. Attorney for the Western District of Arkansas. He served in that capacity until he joined Walmart. In 1996 he was elected Sebastian County Prosecuting Attorney, and prior to that he spent nine years in private practice.

• The company also changed the reporting structure of its legal and ethics function around the world. The General Counsels, who also serve as the Ethics Officers, for each country now report to the General Counsel of Walmart International and the Chief Ethics Officer, rather than to the CEO of the individual country.

• Walmart established a new global compliance and ethics committee to help the company continue to operate in accordance with applicable laws and regulations and the highest ethical business standards. The committee, comprised of senior executives across the organization including President and CEO Mike Duke, will meet at least quarterly and will report periodically to the audit committee of the board. 

• Specific compliance actions taken in Mexico include the following: 
  • Engaged anti-corruption and FCPA compliance experts, namely the international law firm of Greenberg Traurig and the professional services firm KPMG, to review and revise the company’s FCPA and anti-corruption compliance program, and provide consulting and on-site FCPA compliance support at Walmart de Mexico. 
  • Moreover, FCPA compliance is overseen by an FCPA Compliance Director who reports to the FCPA Compliance Officer for Wal-Mart Stores, Inc. Adriana Velazquez Villaseñor, former Chief Compliance Officer for G.E. Latin America, began as the FCPA Compliance Director for Walmart de México y Centroamérica on Aug. 22, 2012.  
  • Conducted compliance procedures training for the majority of Walmart de Mexico’s Home Office associates and operations management team, as well as new hires and certain vendors. This training is ongoing.
Reinforced its ethics program through improved education and issue escalation to heighten awareness and observance of the company Statement of Ethics. In addition, to maintain ongoing transparency, the local ethics helpline will continue to be operated externally by Deloitte.
  • Appointed C.P. Javier Soní Ocampo to the newly-created role of EVP and General Director of Compliance, Real Estate and Corporate Affairs for Walmart de México y Centroamérica. Soní will report directly to Walmart de México y Centroamérica President and CEO Scot Rank and will be responsible for, among other things, strengthening the company’s structure to enhance compliance. Prior to joining Walmart, Soní was Territorial Director Partner of Pricewaterhouse Coopers, where he had a successful career since 1971. Soní is a Public Accountant, has served on various Boards of Directors, and he is a member of the Mexican Institute of Public Accountants and Finance Executives.
  • Created the new position of Vice President of Compliance to further enhance the compliance function at Walmart de Mexico. The company is currently conducting a search for the appropriate candidate, and once filled, the role will focus on continuing the growth of Walmart de Mexico’s business in the most legally compliant manner possible. This role will define and manage compliance for all formats in Walmart de Mexico. 

• In March of 2011, Walmart President and CEO Mike Duke directed the company to conduct a worldwide review of its U.S. FCPA and anti-corruption compliance program. Following that direction, over the past 17 months, Walmart has worked closely with anti-corruption compliance experts at the international law firm Greenberg Traurig and the professional services firm KPMG, to review and assess Walmart’s FCPA and anti-corruption compliance program.
• The company is taking a systemic approach to improve FCPA compliance in every market in which it operates, drawing on corporate best practices that will help enhance, over time, an FCPA compliance program that will make Walmart an even better company.
• Walmart believes a world-class FCPA compliance program requires a sustained effort and a commitment to continually make adjustments along the way. With any compliance program, the goal is to prevent violations but it’s also important to have an effective mechanism to detect potential violations, investigate them thoroughly and, if appropriate, take remedial action.

• The company also recognizes that no policies or principles, however strong, will succeed over time without people who believe in them and practice them. Walmart’s firm expectation is that each and every one of its associates will adhere not only to the letter of the law, but also to the highest standards of personal integrity. Every associate in every market has a mandate to both prevent and report issues. 

• As a result of this review, the company is presently implementing an enhanced and updated global FCPA and anti-corruption compliance program worldwide designed to strengthen its ability to prevent, detect and remediate violations.
• The company has spent more than $35 million on this effort over the past 17 months.  More than 300 professionals at Greenburg Traurig and KPMG have dedicated in excess of 79,000 hours, including more than 85 market task force visits and more than 1,000 interviews of market personnel. 

• The company has focused its enhancements on several key components, including the following:
  • An ongoing commitment to FCPA compliance from senior management;
  • The right organizational structure;
  • Robust policies and procedures designed to prevent, detect, and remediate violations;
  • Communication and training;
  • Third-party due diligence; and
  • Monitoring and auditing.

• Walmart is committed to doing the right things the right way. This commitment is shared by the Chairman of the Board, the Board of Directors, the president and CEO, and the senior management of the company. 

• As Walmart’s Chairman, Rob Walton, said at the 2012 Shareholders Meeting, “From our earliest days, Walmart has had a history of holding itself and every associate to the highest standards of integrity….Acting with integrity is not a negotiable part of our business…. We will not tolerate violations of the FCPA, or ethical wrongdoing of any kind. If violations of the law or company policies occurred, appropriate action will be taken.” 

• In addressing the importance of integrity, Mike Duke has said: “Let me be clear: Walmart is committed to compliance and integrity everywhere we operate.  And we're working to continually strengthen our compliance efforts around the world… If you work for Walmart, there is no gray area between right and wrong.  It's either the right thing to do, or it shouldn't be done at all….  We will not accept anything less than integrity."

• Walmart aligned its corporate structure to have the global compliance, ethics, investigations and legal functions under one organization, reporting to its Executive Vice President and Chief Legal Officer Jeff Gearhart. This move will allow the company to leverage its strengths in these key disciplines around the world, resulting in closer coordination and integration.

• The company also created and filled several key positions to further support its global compliance, ethics, investigations and legal functions. See examples above. 

• The company’s global anti-corruption policy states that Walmart prohibits anyone acting on behalf of the company, directly or indirectly, from making or receiving improper payments.  Improper payments means receiving or paying bribes or giving, offering, or promising to give money or anything else of value to any person, including any government official, in order to improperly influence any act or decision of a person, or to otherwise gain an improper benefit for the company.

• The company’s global anti-corruption policy also states that any associate or third party who violates this policy in connection with Walmart business will be subject to disciplinary measures, up to and including termination in the case of an associate, or termination of business relations in the case of a third party and, where appropriate, referral of the matter to relevant law enforcement authorities.  

• In accordance with the global anti-corruption policy, Walmart is implementing appropriate incentives and discipline for adherence to or violations of, respectively, the policy and related procedures.
  • For example, compliance will be an express component of performance criteria for market presidents.

• Walmart has developed market-specific procedures designed to customize the FCPA compliance program in each country. Walmart is in the process of implementing these procedures in all 11 markets outside the U.S. along with its Global eCommerce and Global Sourcing divisions. The procedures are intended to be revised as needed to address market-specific circumstances, and in response to ongoing testing and monitoring in the markets.

• Walmart has conducted more than 1,000 interviews across markets to gain an understanding of the specific risks and foundational touch points that exist in each market.

• An important aspect of an FCPA compliance program is regular and clear communication to and training of existing associates and new hires, as well as third parties, who interact directly or indirectly with government officials. 

• Since December 2011, KPMG has conducted more than 155 FCPA, anti-bribery and anti-corruption training sessions around the world covering more than 11,500 associates at all levels of the company, including key senior executives/officers who interact directly or indirectly with government officials. The training was primarily conducted in person and was conducted in the market’s native language where necessary. Associates were required to sign a certification upon completion of the training. These training sessions are ongoing and additional training sessions are scheduled in the coming weeks.

• In addition to the FCPA training by KPMG, Greenberg Traurig has also conducted training on the enhanced and updated procedures for more than 7,765 associates and third-party intermediaries in Mexico, more than 950 associates in China, and more than 865 associates in India. This training is also ongoing and additional procedure and scenario-based training for associates and third-party intermediaries is scheduled in these and other markets in the coming weeks.

• The company is also revising its global Computer Based Learning training module as it relates to the FCPA. The module is anticipated to be introduced widely in domestic and international markets during the fourth quarter of 2012.  

• An important aspect of FCPA compliance is due diligence of third-party intermediaries that conduct business for the company.

• The company is focusing on enhancing its existing processes to identify and vet existing third-party intermediaries who do business for the company. Walmart is also implementing an on-boarding process for any new third-party representatives of the company. 

• These due diligence processes include data extraction, review and input from the business unit, risk ranking and anti-corruption compliance review. 

• To date the business units have reviewed more than 20,000 vendors for possible inclusion in due diligence screening; KPMG has performed some level of background check on approximately 3,500 of these vendors. 

• The company is currently evaluating its FCPA related financial controls and will enhance such controls where appropriate.

• The company is also in the process of implementing processes to monitor and audit FCPA compliance on a global basis. This includes implementing processes to conduct corruption risk assessments in each market on at least an annual basis and engaging the global audit firm PricewaterhouseCoopers, LLC to assist with the FCPA monitoring and audit process.   

• Walmart is taking global compliance with all laws very seriously and is making concerted efforts to root out and terminate noncompliant behavior.

• The company is working hard and dedicating considerable resources to enhance its program so that it is even stronger and more effective in every country in which it operates.

• Walmart recognizes that the effort to date is a work in progress and there is more to be done. The company understands and accepts that in order to be successful, it must remain focused on this important program, continually audit and measure its progress and make adjustments as needed.

• Walmart’s commitment to this effort is strong and its expectation for compliance is firm.

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About Walmart 
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores, online and through their mobile devices. Each week, more than 200 million customers and members visit our 10,400 stores under 69 banners in 27 countries and e-commerce websites in 10 countries. With fiscal year 2012 sales of approximately $444 billion, Walmart employs more than 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting http://corporate.walmart.com, on Facebook at http://facebook.com/walmart and on Twitter at http://twitter.com/walmartnewsroom. Online merchandise sales are available at http://www.walmart.com and http://www.samsclub.com.