scce-cep-2014-09-Jorgensen-Moehring

Compliance and Ethics at Walmart
an interview with Cindy Moehring and Jay Jorgensen
Senior Vice-President and Global
Chief Compliance Officer at Walmart
Senior Vice-President and Global Chief
Ethics Officer at Walmart
See page 14
Compliance & Ethics
Professional
a publication of the society of corporate compliance and ethics www.corporatecompliance.org
September
2014
49
Ethics Bowl: Teaching
ethical reasoning
to students
Maureen Weldon
55
Seven powerful ideas
to deliver meaningful
compliance messages
Kathalin Carvalho
59
The global
language of
ethical values
Simon Webley
31
An inside-out look
at organizational
ethics
Frank J. Navran
This article, published in Compliance Ethics Professional, appears here with permission from the Society of Corporate Compliance Ethics. Call SCCE at +1 952 933 4977 or 888 277 4977 with reprint requests.

14 www.corporatecompliance.org +1 952 933 4977 or 888 277 4977
ComplianceEthicsProfessional September2014 FEATUREFEATURE
Adam Turteltaub(adam.turteltaub@corporatecompliance.org)
Vice President, Membership Development at SCCE,
interviewed Jay Jorgensen (jay.jorgensen@walmart.com)
and Cindy Moehring (cindy.moehring@walmart.com), both
with Walmart, in May of 2014.
AT: We notice that Walmart has a Global
Chief Ethics Officer in addition to a Global
Chief Compliance Officer. In the field, we
always say that compliance and ethics must
be integrated. Can you describe how the two
positions interface and, in particular, who is
responsible for monitoring and overseeing
culture, managing and protecting internal
whistleblowers, and implementing the non-
retaliation policy? Do you each make separate
reports to the Board?
JJ: As the members of SCCE know,
compliance and ethics have been dynamic
topics in companies over the last few years.
Effective compliance and ethics programs
need to constantly change to incorporate
recent best practices and to stay relevant in a
company’s business. That has certainly been
Jay Jorgensen
Chief Compliance Officer at Walmart
Cindy Moehring
Chief Ethics Officer at Walmart
an interview by Adam Turteltaub
Meet Jay Jorgensen and
Cindy Moehring

+1 952 933 4977 or 888 277 4977 www.corporatecompliance.org 15
ComplianceEthicsProfessional September2014
FEATURE
true at Walmart. Over the last two years, the
company has made substantial changes in
our Compliance and Ethics functions.
As a result of these changes in Walmart’s
current structure, the Compliance, Ethics,
Legal, and Security/Investigations functions
are handled by four global teams that work
together in the same overall group. The
company calls that group Global Governance
to reflect the importance of these functions in
the company’s operations. The global heads of
Compliance, Ethics, Legal, and the Security/
Investigations group all report to Jeff
Gearhart, who is our
company’s Executive
Vice President and
Corporate Secretary.
In addition, we (Cindy
and I) have reporting
lines to the Audit
Committee of our
Board of Directors and
meet regularly with the
Audit Committee.
We agree with you
that Compliance and
Ethics need to work together closely. For that
reason, many companies put them both into
the same department. We feel that we get the
same type of benefits that would come from
being in the same department, because our
teams are together in the Global Governance
group. Our teams collaborate closely, both in
the company’s Home Office and around the
world. At the same time, by having both of us
working on separate aspects of the program,
we’re able to do twice as much in managing
the changes that are happening in the
company. There’s a lot of progress to manage.
Walmart has over 2.2 million associates
and over 10,000 stores in 27 countries, plus
eCommerce and sourcing operations.
Your question about culture is important.
We both feel that company culture is key to
effective ethics and compliance programs.
In that regard, we’re fortunate that Walmart
has a long history of a culture that’s based on
a foundation of integrity. This goes back to
Sam Walton, who emphasized fair dealing,
honesty, and integrity. That culture has
been continually re-emphasized since those
early days.
CM: Both the Ethics and Compliance
groups work together to continue this
heritage of integrity. We do that through
education and communication initiatives,
recognition programs, and through
partnering with the
business’ leaders to
emphasize compliance
and ethics in everyday
business operations.
There’s no substitute
for the impact that
business leaders can
have on a company’s
associates through
their daily leadership.
Regarding the
management of
whistleblower reports and our non-retaliation
policy, the company has established Global
Ethics associates around the world to handle
all whistleblower allegations regarding
potential violations of our Statement
of Ethics. In addition, the company has
established a global escalation and review
process that identifies specific categories of
the most serious allegations, which must be
reported to our Global Ethics headquarters
in Bentonville. It is important that internal
and external reporting individuals have an
easy way to report concerns. This is why
Walmart has a global helpline – equipped to
handle most local languages – to report ethics
concerns 24/7. The helpline is staffed by an
organization not affiliated with Walmart, and
to the extent possible (and in conformity with
FEATURE
We agree with you
that Compliance and
Ethics need to work
together closely. For that
reason, many companies
put them both into the
same department.

ComplianceEthicsProfessional September2014 FEATURE
local regulations), callers may be anonymous.
Reporting individuals also may report using
our global website (walmartethics.com), via
phone (local phone numbers are published
on the website), via email or mail, and via
their HR representative. In all cases, associate
privacy will be respected to the fullest extent
possible under the law.
When an
allegation is
received, Global
Ethics oversees the
investigation and
utilizes various
experts to conduct
fact-finding, such
as Legal, Global
Investigations, Asset
Protection, or HR
teams, among other
resources. A final
report then advises
the business on
corrective action,
which can include partnering with the
Compliance team to implement improved
controls. In addition, all corruption matters
receive an additional review by a governance
team at the corporate Home Office in
Bentonville, and that team works with the
Legal department to determine next steps. Our
joint objectives in this process are business
ownership, understanding and adherence
to the right behaviors, and a system of
compliance to support them.
AT: [to Jay] There’s not a standard entry into
the world of Compliance, but yours is certainly
atypical, even by compliance standards. You
worked at a law firm, and then previously
clerked for a former Chief Justice of the
Supreme Court and a man who went on to
become a Justice. What do you think in your
background made Walmart a good fit?
JJ: I never planned on working at
Walmart, but I’m glad I joined the company. It
has been a great place to work. It’s exciting to
be part of building a world-class compliance
program at the world’s largest company.
After finishing my clerkships, I joined
the law firm Sidley Austin, doing civil and
criminal investigations and litigation. That
was a good way to
get training on the
ways that companies
run into problems
and how to prevent
those issues. As the
idea of corporate
compliance and
ethics programs
started to develop, I
got the opportunity
to be part of that
discussion. It was
part of my practice
to advise companies
on the rapidly
evolving standards for compliance and ethics
programs in the U.S. Federal Sentencing
Guidelines, the U.K. Bribery Act, the Woolf
Report, and the statements of governmental
agencies. I helped the firm’s clients apply the
current best practices to build or improve
their compliance and ethics programs, either
as part of settling cases with the government
or as part of an update to their corporate
governance efforts.
When I first got the opportunity to talk
with Walmart, I wasn’t planning on leaving
my firm. I hoped to use my experience with
building and improving compliance and
ethics programs to recruit the company to be
a client. However, after talking to the business
leaders here, I realized that Walmart is unique
in its ability to really make an impact in the
world. I was convinced that I wanted to be
part of that.
FEATURE
When an allegation is
received, Global Ethics
oversees the investigation
and utilizes various
experts to conduct fact-
finding, such as Legal,
Global Investigations, Asset
Protection, or HR teams,
among other resources.

FEATURE
AT: [to Cindy] What in your background
made you a good fit to lead Walmart’s
Ethics program?
CM: I began my career with a clerkship
for a U.S. Federal District Court judge before
spending time in private practice, and then
joining Walmart’s Legal department in 1999.
During my tenure in the Legal department,
I served as Associate General Counsel in
Corporate Governance, Secretary to the
Audit Committee, and had responsibility for
implementing Sarbanes Oxley at Walmart,
including advising the
company on setting
up a separate ethics
program. In 2007, I
was asked to run the
US ethics program,
overseeing all ethics
investigations and
advice for Walmart’s
US associates.
In 2009, I was
promoted to Vice-
President and Chief
Ethics Officer. Then in
2012, I was promoted to
Senior Vice-President and Global Chief Ethics
Officer with responsibility for promoting
ownership of Walmart’s ethical culture to all
stakeholders globally. This includes overseeing
the company’s confidential reporting system
for violations of the company’s Statement of
Ethics and all resulting ethics investigations,
providing proactive ethics opinions and
advice, leading a continuing ethics education
and communication program, measuring
the company’s culture of integrity, and
leading regular integrity reviews with
business owners.
AT: What were some of the biggest
surprises for both of you in moving from
adviser to practitioner?
JJ: As you know, Walmart is a large
company; we have more than 2.2 million
associates and almost 11,000 stores in 27
countries. While we both knew about Walmart
before joining the company, we didn’t fully
expect the range of issues that arise in such a
large operation. This scale is both good and
bad. Because Walmart is such a force in the
industry, we can lift conversations to higher
levels and we can lead on important changes.
However, as you can imagine, tasks such as
achieving information sharing, providing
consistent training,
and building systems
at this scale requires
extra effort.
AT: Please describe
for our readers how
you oversee ethics
investigations in
the new Walmart
structure, including
the line of sight
to how these are
managed, monitored,
and escalated.
CM: We want to make sure that all
concerns are investigated in an appropriate
and timely manner. We have added dedicated
Global Ethics associates around the world
to review and manage different types
of allegations from our various business
operations. In addition, we have a global
escalation and review process that identifies
specific categories of allegations and escalates
the most serious concerns.
For example, all serious financial integrity
matters receive an additional review by
Global Ethics at the corporate Home Office
in Bentonville, and that team works with the
Legal department to determine next steps.
When an allegation is received, Global
Ethics is responsible for the entire case
We have added
dedicated Global Ethics
associates around the
world to review and
manage different types
of allegations from
our various business
operations.

management process, and uses various experts
to conduct fact-finding, such as our Global
Investigations, Asset Protection, or HR teams.
At the conclusion of an investigation, Global
Ethics advises the business on corrective
action, which can include partnering
with the Compliance team to implement
improved controls. This process allows
Global Ethics to ensure consistency of results
and completion of recommended corrective
action for long-term
improvements in the
company’s business
operations.
As noted
previously, to
report suspected
unethical behavior,
every associate has
access to a global
helpline – publicized
globally through
facility posters – and
an online reporting
capability on
walmartethics.com,
a website available
in 14 languages. Associates also may report
in person or in writing to HR or Global Ethics
staff in the markets.
AT: One of the more common comments we
hear from attorneys moving into a compliance
or ethics role is they realize the law is, in many
ways, just the start of the job. A number of
commentators in our profession have pointed
out that lawyers who are successful in these
roles are those who successfully “embrace” the
distinct mandates of compliance and ethics,
so they are looking through a professional
compliance or ethics lens and not merely
through the traditional legal lens in particular
areas of subject matter expertise. Has that
been your experience?
JJ: I agree that compliance and legal are
different roles that require different mindsets
to be successful. In my experience, many good
compliance and ethics officers are lawyers.
Legal training and experience provides a
helpful background for a compliance officer.
But to be good at running a compliance
and ethics program, a lawyer has to adopt
a different approach to the job from the one
learned in law school or a firm. Compliance
and ethics roles
are about building
sustainable
processes,
creating culture,
and promoting
transparency. A
legal background
isn’t sufficient
by itself to create
success.
The same is true
for compliance/
ethics professionals
who move into a
legal role. I know
several former
compliance and ethics practitioners who
are now great lawyers for their respective
companies, because they have embraced the
different mindset and approaches necessary
for that role.
CM: While a legal background is great
preparation for compliance and ethics, the
disciplines are very different in the way
tasks are approached. In my view, the main
difference is that legal training encourages
a mindset of giving advice and defending
the company, and a compliance or ethics role
can require the exact opposite. We’re looking
to promote transparency, change processes
where needed, and help associates understand
how integrity and our values connect to the
way we should work every day in order to
Legal training and
experience provides a
helpful background for
a compliance officer. But
to be good at running a
compliance and ethics
program, a lawyer has to
adopt a different approach to
the job from the one learned
in law school or a firm.

FEATURE
achieve our company mission. Being able to
call upon both sets of skills is important. We
are lucky to have many leaders who are great
at both. In Walmart’s Compliance and Ethics
teams, we have a mix of lawyers, managers,
finance experts, scientists, and compliance and
ethics professionals. Working together, they
bring different skills to the table and make us
a more effective organization overall.
AT: Can you give
us an overview of
the structure of your
compliance and
ethics program?
JJ: The most
important part of
our structure is
that Walmart has
a corporate culture
that emphasizes
integrity. The company
frequently talks about
our basic beliefs, which we regard as the
foundation of our business. You’ll see the
basic beliefs printed on the walls in Walmart’s
buildings, and they are repeated in many
aspects of company life. One of those basic
beliefs is “Acting with integrity.”
With that solid foundation, over the last
year the company has completely reevaluated
our existing compliance program. Our goal is
to have a world-class program. To do this, our
first task was to look at the structure of each
of our Compliance teams around the world.
Until recently, Walmart operated a number of
separate compliance programs in the markets
where we have retail operations. Over the last
18 months we have combined those separate
Compliance teams into a unified, global
program. Each of our retail markets now
has a Chief Compliance Officer (CCO) who
leads the compliance program in that market.
Those CCOs are senior-level executives who
are part of the market’s business leadership
team. While the CCOs are partners with the
General Counsel in these same markets, the
company has separated the roles of General
Counsel and CCO. In many markets, those
roles were previously combined. As a result,
we have recently appointed or hired new
CCOs in most of our international markets.
These CCOs report to Walmart’s Home Office
in Bentonville, not to
their local business
management.
At the company’s
global Home Office,
the company created
my role, Senior Vice
President (SVP)
and Global Chief
Compliance Officer,
reporting directly to
the Executive Vice
President (EVP),
Global Governance
and Corporate Secretary, and also to the Audit
Committee. Under me, we have an SVP and
CCO for Walmart’s International division, an
SVP and CCO for the U.S., an SVP and CCO
for our global eCommerce business, a Global
Anti-Corruption compliance officer, and a VP
over our global Responsible Sourcing team.
This description sets out our geographic
compliance leadership. To support those
CCOs and their teams, the company has
also invested in subject matter experts who
address 14 different compliance topics (such
as environmental compliance, anti-money
laundering, food safety, consumer protection,
health and safety, etc.). Those global subject-
matter leaders provide the business with
guidance on their areas of expertise.
CM: In 2012 I was promoted to Senior
Vice President and Global Chief Ethics
Officer, reporting directly to the EVP, Global
Governance and Corporate Secretary and
With that solid
foundation, over the last
year the company has
completely reevaluated
our existing compliance
program. Our goal is
to have a world-class
program.

with continued reporting to the Audit
Committee. In that role I lead the company’s
ethics program throughout the world. Under
me, we have a VP and Chief Ethics Officer for
the U.S., VP and Chief Ethics Officer for the
LATAM [Latin America] region, VP and Chief
Ethics Officer for EMEA [Europe, Middle East,
and Africa – plus Canada] region, VP and
Chief Ethics Officer
for the Asia region,
and a VP and Chief
Ethics Officer for our
Global eCommerce
and Global Leverage
business units.
Over the last two
years the company
has strengthened the
presence of the Global
Ethics department
throughout its global
business operations
by adding full-time
dedicated ethics
associates to handle alleged instances of
non-compliance with our Statement of Ethics.
AT: Although it’s the early stages,
Walmart’s compliance reforms have received
some pretty positive feedback from the
compliance professions, based on their breadth
and depth. One of the big restructures that
got a lot of notice was the move of Compliance
out from under Legal, and the independence
and empowerment that came with that. Jay
has been quoted as saying the CCO “can’t
wear half a hat” and should be “senior and
independent.” Can you elaborate on that?
JJ: The decision to separate the roles
of General Counsel and Chief Compliance
Officer in Walmart has been key to the
progress the company has made in enhancing
its compliance program over the last 18
months. That separation has provided three
distinct benefits. First, as we’ve discussed,
the General Counsel and Chief Compliance
Officer have different roles that can require
different approaches to the same issue. While
it’s possible to do both jobs well, as we’ve
worked to build a world-class program it has
been helpful to have strong leaders in both
roles in each of our markets.
The CCO and
our business leaders
know to whom they
can turn for legal
advice. At the same
time, they know who
will build or enhance
the processes
necessary to promote
compliance with
the law. Second, by
separating these
roles, the company
has effectively
doubled the
amount of executive
leadership time available to both Legal and
Compliance. Hiring more than 10 new CCOs
has been a major investment for the company,
but that investment has ensured that we have
leaders with sufficient time and resources
to devote to the task. Finally, the company’s
decision to create a senior executive role
for the CCO in each of our markets and to
restructure their reporting lines back to the
Home Office has sent a powerful signal about
the company’s commitment to compliance and
increased transparency to issues that are far
from corporate headquarters.
AT: One notable change is that the
Compliance and Ethics functions also now
report to the EVP Global Governance and
Corporate Secretary, as well as to the Audit
Committee. What information do you report
to each one?
The decision to
separate the roles of
General Counsel and Chief
Compliance Officer in
Walmart has been key to
the progress the company
has made in enhancing its
compliance program over
the last 18 months.

FEATURE
CM: We both have direct reporting lines
to Jeff Gearhart, who is our EVP of Global
Governance and Corporate Secretary. We
also both have a separate reporting line to the
Audit Committee of the Board of Directors,
and we both report independently to them.
In 2012, Jeff’s
responsibilities
were expanded
beyond Legal to
include oversight of
Compliance, Ethics,
and Security/
Investigations in
order to further
strengthen and
leverage these key
disciplines around
the world.
Because
we have dual
reporting lines,
we report similar
information to the management and the
Board. For example, under the direction of the
Board and senior management, the company
established a set of compliance objectives
to be accomplished in 2013 and the board
tied a portion of our most-senior executives’
pay to achieving adequate progress on
these objectives. This process required close
collaboration between senior management, the
Compliance team, and the Board. The process
was so successful that the company decided to
repeat it in 2014.
AT: We noticed that each of the regional
compliance and ethics officers have a “seat at
the table” with the local CEO senior leadership
team. That’s something the profession has
been pushing for, because we believe they
can’t be effective unless viewed as part of
the senior leadership team and have a voice
in important business decisions. How is that
working out on the ground, and how do you
maintain their independence?
JJ: We agree with you that a seat at the
business table is essential for a successful
compliance and ethics program. It allows the
Compliance and Ethics team to give advice
before decisions are
made, to help shape
the company’s
culture, and to
prepare for key
upcoming events
rather than chasing
compliance and
ethics issues after
they’ve arisen. Since
Walmart has made
the recent changes
to our structure,
both our business
leaders and the
Compliance and
Ethics teams have
commented on the improved results that flow
from that arrangement. As just one example of
how our business leaders are ensuring that the
“seat” remains effective, each of our markets
now has a monthly compliance and ethics
meeting involving the market’s most senior
management, the CCO, and the chief ethics
officer to discuss critical issues.
To maintain the independence of our
compliance and ethics functions, our CCOs
and chief ethics Oofficers report back to the
center, but live and work in their markets
and have a close relationship with their
country executive team. By changing the
reporting relationship (and the related
hiring, performance review, and other HR
issues associated with that relationship), the
company has more of an independent global
perspective on compliance and ethics issues,
while still maintaining a close tie to the local
operating environments.
To maintain the
independence of our
Compliance and Ethics
functions, our CCOs and
Chief Ethics Officers report
back to the center, but live
and work in their markets
and have a close relationship
with their country
executive team.

AT: One of the most important concerns
in Compliance and Ethics is that reports are
not “filtered” (other than correction of facts,
but never the opinion of the CCO or Chief
Ethics Officer) before they get to the governing
authority. How does Walmart’s new reporting
structure handle this issue?
CM: We agree. It’s important that
compliance and ethics reports are objective,
fair, and accurate. One of the ways we ensure
this is through our reporting structure.
Our roles (Chief
Compliance and Chief
Ethics Officers for
the global business)
report directly to both
a senior member of
management and the
Audit Committee
of the Board. We
meet privately with
the committee on a
regular basis, and
throughout the
year, the committee
actively monitors
the company’s
performance on
compliance and ethics issues. This process
enables impartial reporting.
Also, all allegations across the globe
are managed through a globally consistent
process and all data is entered into one global
case management system. These controls
allow us to consistently provide senior
management and the Audit Committee with
accurate information.
AT: Looking at how Compliance is
organized, one thing that struck me is that
there is a separate position for Responsible
Sourcing. In the past, the company has had
a tremendous focus on sustainability in its
sourcing. Is this role now going to look at
sourcing both in terms of sustainability and
compliance?
JJ: You’re right that the company has
focused on sustainable and ethical sourcing
for several years. One way that Walmart
can make a positive difference in the world
is through its supply chain. We source
products from the U.S. and many countries.
We can use that sourcing to promote safe
workplaces, sustainable environmental
practices, and to empower women and those
who are economically
disadvantaged. One
of my most satisfying
experiences since
joining Walmart
has been visiting
factories that have
upgraded their
safety equipment,
provided training to
workers, or changed
their environmental
practices for the
better because of
Walmart.
We’re currently
working to build
on this foundation. Recently we hired a new
Vice President of Responsible Sourcing and
increased our global Responsible Sourcing
staff. We’ve also joined several partnerships
with other retailers and key stakeholders to
address responsible sourcing issues.
The company’s work on sustainability
(both in the supply chain and our own
facilities) is led by a dedicated sustainability
team who work as part of Walmart’s Corporate
Affairs division. The Sustainability team and
the Responsible Sourcing team collaborate
to increase environmental awareness and
appropriate practices in our supply chain.
The Sustainability team is led by Kathleen
McLaughlin, who recently joined the company
One of my most satisfying
experiences since joining
Walmart has been visiting
factories that have upgraded
their safety equipment,
provided training to
workers, or changed their
environmental practices
for the better because
of Walmart.

FEATURE
from McKinsey Co., where she led the Social
Innovation practice.
AT: What are some lessons other companies
can take from this? Walmart is hardly alone
in both looking to be more sustainable and to
avoid working with third parties that could
create risks.
JJ: Some of the lessons I’ve learned in
this area are simple. It’s important to be
transparent on what a company is doing
with regard to social responsibility and
sustainability. In addition to providing
information on its
web pages, Walmart
produces a Global
Responsibility Report
that provides regular
updates on what the
company is doing
on social issues,
responsible sourcing,
and sustainability.
The response to
that publication is
amazing. We get
constructive feedback
and suggestions from
a host of non-governmental organizations,
activists, customers, and government officials.
Those interactions are helpful and result in
additional good ideas for action. A related
point is that the world is full of people who
genuinely want to help companies do good.
If a company is just starting to address social
or environmental issues in its supply chain,
it’s not necessary to go it alone. We get a lot
of benefit from asking groups in this space
for advice.
AT: The company also has created a
separate role for the Global Anti-Corruption
Officer, who, if I read the staffing chart
right, reports both directly to Jay and to the
International Chief Compliance Officer. First,
why the dual reporting relationship?
JJ: Walmart’s Global Anti-Corruption
Officer plays an important role. He leads
a team of individuals in both the Home
Office and each of the international markets
who are dedicated to preventing corruption
through training, due diligence, monitoring,
and enhanced controls. The individual who
currently holds that post is a former United
States Attorney, so he brings a wealth of
experience to the job.
The fact that
the Global Anti-
Corruption Officer
reports to both
the CCO of the
International division
and to me is meant to
reflect the attention
the company is
placing on this issue.
All three of us are
actively involved in
overseeing the work
to enhance our anti-
corruption program.
Our CCO for the International division and I
have both dedicated part of our careers before
Walmart to anti-corruption matters, so the
three of us are able to pool our experience in
working on the current enhancement project.
AT: Second, how will this function work
with the Compliance and Ethics teams?
JJ: Each of our international markets has
a dedicated Anti-Corruption Director (and
in many cases, staff). Those Anti-Corruption
Directors report to a dedicated Anti-
Corruption team in Walmart’s Home Office
in Bentonville, which is led by the company’s
Global Anti-Corruption Compliance
Officer. Collectively, this global team is
In addition to providing
information on its web
pages, Walmart produces
a Global Responsibility
Report that provides
regular updates on what
the company is doing on
social issues, responsible
sourcing, and sustainability.

charged with conducting due diligence,
developing and providing anti-corruption
training, monitoring, and overseeing the
implementation of the company’s anti-
corruption policies and procedures throughout
the world. This Anti-Corruption team works
closely with both the Global Compliance and
Ethics teams in Bentonville as well as their
respective in-market counterparts. And Global
Ethics shares findings
and learnings from
cases with the
Anti-Corruption
Directors, so they can
continuously improve
the program.
AT: The Global
Compliance
Program Report
states some of the
functions, in terms
of what was handled
internally and what was handled externally,
were realigned. How was that assessment
conducted?
JJ: The company has had compliance and
ethics programs for a number of years. In the
last two years the company has undertaken
a major project to enhance those programs.
These enhancements address all aspects
of compliance, with a particular focus on
anti-corruption. The company has reported
significant expenditures on outside legal
counsel and consultants as part of that effort.
As we’ve built up our anti-corruption teams,
hired new CCOs, and built out the internal
Compliance staff, we have continually
analyzed whether (and when) to transfer work
from our external consultants to our internal
personnel. Because of our recent work to
define roles and because of new hiring, we
now have more than 2,000 associates working
in the compliance program across the world.
CM: As the Compliance team has built its
capabilities, we’ve also increased the size of
our Ethics and Investigation staffs globally so
we can handle investigations more effectively.
AT: Tell us a bit about the compliance
monitors and their roles. Will they be a part of
the Compliance team or business units? How
will their independence be maintained?
JJ: This is an
experiment that
we’re trying. The
company has
utilized compliance
monitors in our US
retail operations for
several years. These
monitors are part of
the Compliance team,
but work closely
with the business
to identify and help
mitigate risks. Each
of these compliance monitors lives in the field
and is assigned a number of stores to visit for
purposes of monitoring and training. Those
assignments are made on a risk-based basis,
so the company can tailor its compliance
resources to the latest information about our
risk. This program has been successful in
the U.S., improving compliance metrics and
fostering a partnership between the field-
based Compliance team and store personnel.
As a result, we decided to expand it to our
international markets.
Last year we began the process of
appointing teams of compliance monitors
in all of our international retail markets. We
call these monitors Continuous Improvement
Managers, because their mission is to
regularly review our retail operations and
assist the business in maintaining compliance
with local laws and policies. Our hope
is the compliance monitors will help the
As the Compliance team
has built its capabilities,
we’ve also increased
the size of our Ethics
and Investigation staffs
globally so we can
handle investigations
more effectively.

FEATURE
company improve program consistency and
effectiveness, implement compliance controls
on a quicker timescale, and reduce costs.
AT: The other interesting new part of the
program is Subject Matter Leaders and Subject
Matter Experts. How were these identified,
what will be their roles, and how are they
different?
JJ: The core elements and methods of a
compliance program may be similar across
businesses, but the subject matters compliance
programs address should vary with the risks
each business
presents. To ensure
our compliance
program addresses
the right topics, the
company undertook
an exercise to
identify our key
compliance risks.
We identified 14
subject matters
that form the
basis of Walmart’s
compliance program
everywhere we operate.
Once we identified these 14 compliance
topics, the company identified at least one
expert in each of those subjects to provide
the company with expert guidance. For
example, we have a food safety expert who
ensures that our compliance program does
the right things with regard to food safety.
We have separate experts for environmental
compliance, consumer protection standards,
etc. We call these global experts our Subject
Matter Leaders, or SMLs. Each SML helps
identify and coordinate common standards
and procedures, shares best practices, provides
training, and supports the Compliance teams
throughout the world on matters relating to
their area of focus.
AT: Another notable element of the
compliance program is that the company
set compliance objectives that could affect
the compensation of the senior executives.
That’s something relatively few companies
have been able to do. How did the incentives
program work?
JJ: This program demonstrates the
involvement and commitment of Walmart’s
Board and senior management in compliance
issues. In 2013 the Audit Committee and the
Compensation, Nominating and Governance
Committee (CNGC) of the Board of Directors
instructed the
company to propose
a set of compliance
objectives to be
accomplished by
January 31, 2014.
We developed the
list of objectives in
coordination with
the Board and senior
management. The
Audit Committee
and CNGC approved
the objectives and the
Board made a portion of the compensation for
the company’s most-senior executive officers
subject to the achievement of the objectives.
We’re fortunate to have the support of
a very involved executive leadership team.
As a result, the process of accomplishing
the objectives flowed smoothly. The senior
executives and the company’s Compliance
team worked together on the objectives and
we provided periodic updates to the Board
throughout the year. Based on the company’s
progress at the end of this fiscal year, the
Audit Committee concluded that the company
had achieved substantial progress on its
compliance objectives. Based on this, the
CNGC elected not to make any compliance-
related reductions to the compensation of
The core elements and
methods of a compliance
program may be similar
across businesses, but the
subject matters compliance
programs address should
vary with the risks each
business presents.

the company’s senior executives for Fiscal
Year 2014.
We found this to be an effective approach,
as it reinforced accountability and pushed
the program forward toward long-term goals,
avoiding being distracted by day-to-day
issues. As a result, the Board and senior
management are utilizing this same process
again for Fiscal
Year 2015.
AT: Is this
something that the
company plans to
continue and to push
down through the
organization as a
whole to other senior
execs and down to
line management?
JJ: While this
specific process
relates to senior management, the company
has recently incorporated compliance issues as
part of the performance evaluation process for
a larger number of executives and has begun
providing compliance training to all new
global officers. We will continue to review the
effectiveness of these accountability measures
to determine how to make our program more
effective.
AT: Many companies struggle with the
issue of providing incentives for compliance
and ethics. You have a program for rewarding
associates who demonstrate exceptional levels
of integrity. How does the program work?
CM: In addition to the executive
compensation program discussed earlier,
Walmart also has a global Integrity in
Action award program. The Integrity in
Action award (IAA) is a global recognition
program honoring and celebrating associates
for modeling, encouraging, and setting the
standard of our belief: Act with Integrity. By
recognizing and encouraging associates who
model and inspire others to act with integrity,
we ensure the preservation of our culture of
integrity, and thus our competitive edge.
This prestigious award is presented
to associates who inspire others by
demonstrating personal commitment to
act with integrity,
encouraging others
to act with integrity,
and/or setting the
standard for integrity
in their facility or
department.
All associates can
make nominations
for the Integrity in
Action award by
filling out a form
found on our internal
corporate website.
Each market hosts an in-market IAA program,
complete with recognition in a variety of ways.
The program culminates with recognition
during Walmart’s shareholders’ meeting, an
event held at the University of Arkansas and
attended by thousands of associates from
around the world and even more shareholders.
AT: Walmart has an absolutely enormous
workforce of over 2.2 million people. How do
you give compliance and ethics training to
that many people?
JJ: This is a significant challenge. We
know policies cannot work well without
consistent and effective training. In fact, in
2013, following a review of all compliance
and ethics training programs in the U.S. and
international markets, we prepared a multi-
year plan aimed at increasing the frequency of
training, providing mechanisms to measure
training effectiveness, and evaluating systems
for tracking training.
The Integrity in Action
award (IAA) is a global
recognition program
honoring and celebrating
associates for modeling,
encouraging, and setting
the standard of our belief:
Act with Integrity.

FEATURE
That being said, we are always engaged
in some kind of training. For example, the
company has delivered anti-corruption
training to more than 100,000 attendees
from all levels of the company around the
world, including key senior executives and
officers who interact directly or indirectly
with government officials. This training
was conducted in the local language
where appropriate.
CM: In addition, Global Ethics manages
training and awareness programs regarding
our Statement of Ethics in every market
globally. Statement of Ethics training is
provided to every new
associate within 90 days
of joining the company
and additional ethics
training programs
are provided based
on position level
throughout an
associate’s career
with Walmart. Field
associates receive ethics
training in a variety of
ways, including during
orientation on their
first day; a computer-
based module focusing on ethical decisions,
how to report and remain anonymous,
and how to use the Statement of Ethics as a
resource; a facilitated class focused on leader
responsibilities for managers-in-training; and
an annual module to refresh knowledge about
the Statement of Ethics.
Another way we keep ethics top of mind
and help associates learn about ethics is
through the “Five-Minute Integrity Focus”
tool, which is distributed monthly to leaders.
These discussion guides help facilitate
interactive conversations about real Walmart
ethical scenarios. Our store and club managers
use them to discuss ethics directly with their
associates as part of regular shift meetings—
when other regular business matters
are discussed.
AT: Just as importantly, how do you win
their trust and get them to come forward
when they see a problem?
CM: For us, compliance and ethics cannot
only be about catching and reporting people
doing things wrong—it’s about helping them
get it right the first time and celebrating where
they’re doing it right. When associates know
that you are there to help them get it right,
they are more willing to trust you and reach
out with questions and
concerns.
We consistently
encourage leadership
to create an
environment in
which associates
feel comfortable
speaking up and
there is no tolerance
for retaliation.
We also measure
associates’ level of
comfort speaking up
and concerns about
retaliation through an annual Integrity
Index survey. And we encourage leadership
to talk about real examples by sharing their
own stories and by using tools provided,
such as the Five-Minute Integrity Focus.
Effectively managing the case management
process and responding to the person who
made the allegation in a timely manner also
is important in building trust. We focus on
multiple touch points between Global Ethics
and the reporting individual.
AT: Typically one of the greatest challenges
is middle management. Those at the top can
really feel the tone at the top if it’s there and
For us, compliance and
ethics cannot only be
about catching and
reporting people doing
things wrong—it’s about
helping them get it
right the first time and
celebrating where they’re
doing it right.

it’s right. But for those in the middle, that tone
can start sounding weak and be drowned out
by the day-to-day demands of any business.
How do you keep them focused on the need
for compliant and ethical business operations?
JJ: Walmart’s corporate culture is built
on a foundation of acting with integrity and
the highest ethical standards. Our global
compliance and
ethics programs
are an extension
of Sam Walton’s
belief in personal
integrity for every
Walmart associate
and supplier.
However,
no policies or
principles, no matter
how strong, will
succeed over time
without people who
believe in them and practice them. That is
why we spend so much time throughout our
business focusing on our unique culture and
incorporating it into our everyday ways of
working and making sure our associates know
what is expected of them.
We do this through a number of different
outlets, including dedicated, store-level
training programs, ethics awareness activities
such as helpline and gifts and entertainment
policy posters in all facilities, and leadership
messages delivered consistently throughout
the year via the interactive Five-Minute
Integrity Focus discussion guide.
AT: Walmart also invested heavily in
new financial controls. What are some of the
lessons learned in terms of getting financial
controls right?
JJ: One lesson we’ve learned is the
importance of a close relationship between the
compliance and ethics officers and the chief
financial personnel in a business. Often one can
provide information that is helpful to the other.
As we’ve worked with the company’s Finance
organization, we’ve been constantly reminded
how they have a keen sense of what’s going on
in the business and access to information that
helps identify and remediate key risks.
AT: Walmart has
an enormous retail
and eCommerce
presence. The
hacking of Target
and other retailers is
certainly something
that probably raised
some reviews at
Walmart, and you
have a dedicated
eCommerce
Compliance team.
What role do the
Compliance and Ethics teams play in ensuring
that consumer data is properly protected?
JJ: The company takes the security and
privacy of our customers’ information very
seriously. We have a Chief Privacy Officer who
reports directly to our Global eCommerce
Chief Compliance Officer. He works closely
with our data security teams on issues relating
to privacy. But we don’t publicly discuss our
data security practices. Rather, the company
continually analyzes and tests our systems to
help ensure customer data remains protected
and we are continuously looking for ways to
improve our data security.
We also have a Global eCommerce Ethics
Officer. Appropriately protecting our data and
privacy of confidential and personal business
information is covered by our Statement of
Ethics. Associates who have concerns about
alleged inappropriate disclosure of this
information are encouraged to report their
concerns to Global Ethics.
We also have a Global
eCommerce Ethics Officer.
Appropriately protecting
our data and privacy of
confidential and personal
business information
is covered by our
Statement of Ethics.

FEATURE
AT: Any advice for other retailers?
CM: We have appreciated the opportunity
to benchmark with other companies on
compliance and ethics issues. We get some
of our best ideas for improving our program
from other companies. So, our advice would
be to learn from each other and share
what you’ve learned so we can raise the
standard of compliance and ethics across
all businesses.
JJ: At Walmart our goal is not to be
only best in class, it is to be world class. The
difference is that we don’t want to build
compliance and ethics programs that set the
standard for only our industry; we want to
build a program that sets the standard—
period. We’ve learned that we can’t do this
alone. By reaching out to other companies
with similar businesses and risks, we can
share our knowledge and build better, more
sustainable solutions across industries.
AT: And finally, even the idea of a Global
Compliance Program Report is a big step for
any company and shows some impressive
leadership in the corporate arena. Though
it makes perfect sense now, given Walmart
is dealing with multiple ongoing agency
investigations, is this something you might do
on a permanent basis?
JJ: Transparency is such an important tool
for creating accountability and encouraging
change. The Global Compliance Program
Report was one way we promoted the
transparency of our work. We’re currently
analyzing whether it accomplished its goal and
whether we should continue to publish it. We’d
welcome feedback from you and your readers.
In the meantime, we will continue to look for
ways to share our progress and challenges.
AT: Thank you both for providing this
inside look at Walmart. ✵
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