Integrity is stressed at Wal-Mart annual meeting; board challenges rebuffed

New York -- Wal-Mart Stores CEO Mike Duke on Friday called integrity the company’s “bedrock” value during a presentation at the chain’s annual shareholders meeting in Fayetteville, Ark. The meeting was held against the backdrop of allegations of illegal payments made to facilitate growth in Mexico, which Duke addressed directly in the following remarks: “We're working to continually strengthen our compliance efforts around the world,” he said. “And I want to personally assure you, we're doing everything we can to get to the bottom of this matter. We will take appropriate action when the investigation is complete.”

Also at the meeting, all Wal-Mart board members were re-elected, and several shareholder proposals challenging company practices and calling for more disclosures on executive compensation and political contributions were voted down, the New York Times reported. Several proxy-advisory firms and large institutional investors had advocated votes against some board members. (Wal-Mart will release the tally of shareholder votes on Monday.)

In remarks at the meeting, company chairman Rob Walton, the eldest son of Walmart founder Sam Walton, also addressed the ongoing investigation into possible violations of the Foreign Corrupt Practices Act stemming from the Mexican scandal.

“Our governance is rooted in the foundation of values that dad put in place,” Walton said. “That’s why we are taking allegations regarding the Foreign Corrupt Practices Act very seriously.”

Walton said the chain was using every resource necessary to conduct an investigation by a third party that has been instructed to go where the facts lead them and cooperating with the Securities and Exchange Commission and Department of Justice.

Executives at the meeting also pointed out Wal-Mart strong recent performance. Duke praised the recent performance of the chain’s business segments, and applauded Walmart U.S. stores’ sales comps, Walmart International’s profit growth and continued sales momentum at Sam’s Club. He also highlighted progress made with the productivity loop, in global e-commerce and recruiting and retaining talent.

“I've said this before, and I'll say it again, Walmart is the best-positioned global retailer in the world today,” Duke said.

The annual meeting, held inside Bud Walton Arena on the campus of the University of Arkansas in Fayetteville, was hosted by actor and singer Justin Timberlake and featured performances from Taylor Swift, Lionel Richie, Celine Dion and others. Walmart is celebrating its 50th anniversary this year, and the stage featured a replica of the original Walton 5-10 store located in nearby Bentonville. Company chairman Rob Walton and siblings Jim and Alice Walton entertained the audience with stories of working for their father in the early days of the business.

“Acting with integrity is not a negotiable part of this business and we won’t tolerate wrongdoing of any kind,” Walton said. “It is my personal commitment to you that we will do the right thing the right way. You have my word on that.”

CEO Duke offered a similar commitment later in the meeting after referencing how integrity is the bedrock upon which Walmart’s foundation is built.

“Walmart is committed to compliance and integrity everywhere that we operate. We are dong everything we can to get to the bottom of this matter,” Duke said regarding the situation in Mexico. Then, speaking directly to the hundreds of Walmart senior executives who attended the event and sit on the floor of the arena, said, “If you work for Walmart there is no gray area between right and wrong. It is either the right thing to do or we shouldn’t do it at all. This is my standard and it was Sam Walton’s standard.”

Adherence to that standard along with other tenets of the company’s corporate culture is what makes Walmart special and why the company has been able to accomplish the things it has in the United States and around the world, according to Duke. There is no way to envision what the world will look like in the next 50 years, but by staying true to the vision that Walton created Duke noted, “there will be no limit to the good we can do all over the world.”

Preliminary results showed all directors up for re-election were re-elected (final results will be announced Monday.) Three shareholder proposals were also defeated Duke joined a chorus of executives including chairman Robson Walton, the son of founder Sam Walton, at the company's annual meeting on Friday in pledging that Wal-Mart will get to the bottom of the allegations and that integrity is the "bedrock" of thWal-Mart Stores’ shareholders on Friday voted to re-elect all 15 directors and add Google Inc's Marissa Mayer to the board at the chain’s annual meeting.

The vote came amid concerns from some investors and proxy-advisory firms that certain members may have helped squelch a bribery probe relating to the company’s operations in Mexico in the mid-2000s. Voters also defeated three shareholder proposals. Voters also defeated three shareholder proposals.

The Walton family controls roughly half of the retailer's 3.4 billion shares.

Duke closed his remarks by reflecting on the timeless contributions of the company’s founder, Sam Walton.

“I believe Sam Walton's greatest legacy was the foundation he built -- the culture, the beliefs and the enduring values,” Duke said. “We can't possibly envision what the world, what retailing, what Walmart will look like in another 50 years. But if we stay true to the foundation that Sam Walton built, we'll continue to be a better company, a stronger company and a prouder company. And over the next 50 years, there will be no limit to the good we can do around the world.”

Duke applauded Walmart U.S. stores’ sales comps, Walmart International’s profit growth and continued sales momentum at Sam’s Club. He also highlighted progress made with the productivity loop, in global e-commerce and recruiting and retaining talent. Duke added: “I've said this before, and I'll say it again, Walmart is the best-positioned global retailer in the world today.”