For the second year in a row, Walmart shareholders will consider a resolution calling for the establishment of an independent chairman for the company’s board of directors. While investors have long expressed concern about the company’s failures in corporate governance and internal controls, that concern became more acute starting in 2012 after the New York Times published Pulitzer-winning expose detailing an (alleged) systematic campaign of bribery at Walmex, plus an executive-led campaign to cover it up.
At the root of the supporting statement for the resolution is a call from investors for meaningful change at Walmart. Given Walmart’s current challenges—multiple quarters of weak earnings, persistent operational problems, an ongoing and increasingly costly FCPA investigation, a nationwide NLRB complaint against the company for violating labor law—the company sorely needs the enhanced oversight and improved leadership accountability that an independent chair could provide.
Unfortunately for Walmart shareholders (and Walmart itself), this resolution is unlikely to pass. With control of 51% of the company’s shares, the Walton family dictates the outcome of shareholder votes, and presumably, they are not inclined to see Rob Walton (who is about as un-independent a board chairman as you can get) lose the chairmanship he has held since Sam Walton’s death in 1992. However, it’s worth noting that 35 percent of non-Walton shareholders supported the independent board chair proposal last year. With such significant investor sentiment in favor of improving governance standards at Walmart, it seems like Walmart and its directors should expect continuing pressure to improve corporate governance standards.