Christopher Williams, who was on the audit committee when allegations of bribery in Mexico first surfaced and has chaired the committee since 2008, will be stepping down from the Walmart board in a few weeks. Who will be the new chair of the audit committee? It’s an important question, considering that the audit committee is charged with overseeing the FCPA/bribery investigation (even though it ignored investor concerns and failed to establish the right internal controls in the first place).
Unfortunately, each of the three remaining audit committee members who are the likely candidates to become the new chair has crucial weaknesses that should raise flags for Walmart investors. Let’s take a look at Jim Cash, Tim Flynn, and Pam Craig.
- Cash: Cash, Walmart’s lead independent director, is overcommitted, presenting governance concerns that are quite similar to those the New York Times raised about his predecessor Jim Breyer. Moreover, he seems to be strangely unaware that the company’s business model has become counterproductive.
- Flynn: Flynn has his hands full with his directorship at JP Morgan, an extremely complex company that is just months removed from a settlement on the London Whale scandal. In addition to JPM and Walmart, Flynn is also on the board of the Chubb Corporation, and just weeks ago became Advisory Chairman for BT Americas. It’s also worth noting that Flynn’s reputation for business ethics and integrity was likely a significant reason he was named to the Walmart Board of Directors, yet Flynn has remained silent on a variety of ethical concerns facing Walmart, including its inadequate response to the Rana Plaza tragedy in Bangladesh and its illegal retaliation against Walmart associates speaking up for change at work.
- Craig: As the former CFO of Accenture and the chair of the audit committee at Akamai, Craig is certainly qualified to be the audit chair. And it would be nice to have another woman chairing a Walmart board committee (right now, five of the board’s six committees are chaired by men). But she might be too new to take on the task, having only joined the Walmart board late last November. Plus, given Walmart’s ongoing e-commerce struggles, the company might need her tech expertise more than anything else.
We’re not the betting kind, so we won’t be placing bets on who’ll become chair. But whoever is named should expect to face high levels of scrutiny from shareholders and Walmart associates as the FCPA investigation rolls into its third year.