Question

1. Where were Wal-Mart’s questionable payments made, and where did this result in serious damage to the company and its executives? Why?
2. The “gestores” payments were made to third parties, who then bribed local officials. How would a company ensure that its third party vendors are operating within the law?
3. Some of Wal-Mart’s senior executives knew about the bribes, but did not take any effective actions to curtail this activity. What steps should the board of directors take to ensure that systems and internal controls are in place so that they are involved about questionable managerial activities and actions?
4. Wal-Mart Mexico seemed to have a culture of the goal justifying the means. How can the board of directors ensure that the operational activities of the company do not subvert proper governance objectives?

Wal-Mart has a brand image that triggers strong reactions in North America, particularly from people whose businesses have been damaged by the company’s overpowering competition with low prices and vast selection, and by those who value the small business-small town culture that has been supplanted. The company doesn’t need any more controversy, and has taken on causes such as environmental sustainability and rushing aid to hurricane victims, partly to build brand support. Consequently, according to the New York Times,1 from September 2005 when a report of significant bribery in Wal-Mart de Mexico was received, senior officers in Mexico and then the United States sought to keep the matter quiet, impede company investigations, blunt the efforts of qualified investigators, refer the matter to senior company lawyers implicated in the scandal for investigation and resolution, weaken company protocols for investigation and reporting, and promote executives involved.



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  • CreatedOctober 28, 2014
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