Essays on Global Corporate Governance - Walmart Assignment

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The paper 'Global Corporate Governance - Walmart" is a great example of a business assignment.   In a bid to create a positive image about its supply chain, Walmart, which is a US-based chain store, launched the Ethical Standards for Suppliers in 1992. The Standards contain detailed expectations that the chain store places on its suppliers. The 2009 Ethical Standards Manual for Suppliers (which is the most recent) contains a list of eleven Standards that all Walmart suppliers are obligated to meet if at all they are to continue doing business with the chain store. In the Standards, Walmart states that all suppliers must comply with laws applicable in their respective operational areas.

Specifically, the chain store underscores the need for suppliers to abide by laws and regulations relating to “ labour, immigration, health and safety, and the environment” (Walmart Stores, Inc. , 2009, p. 5). The chain store further states that suppliers need to use voluntary labour only. In essence, Walmart prohibits its suppliers from using forced, coerced or labour acquired from underage children. The third standard obligates suppliers to keep their hiring and employment practices within the legal limits.

As such, suppliers are advised to verify the age, nationality and the legal-standing of migrant workers. The chain store further prohibits its suppliers from engaging in discriminative work-place practices. The fourth standard underlines the need for suppliers to compensate their employees fairly while paying due consideration to any extra hours or input above the normal identified working hours. Fifth, Walmart states that suppliers should allow their employees the freedom of association and of engaging in collective bargaining. Additionally, suppliers have an obligation to ensure that the work environment is healthy and safe. Walmart underscores the need for suppliers to abide by the existing environmental laws in order to minimise any negative effects that their production activities may have on the environment.

In a bid to uphold its integrity (perhaps in awarding supply tenders), Walmart has also prohibited suppliers from awarding “ gifts and entertainment” to its employees (associates). The suppliers are also prohibited from entering into transactions with the associates that may end up creating a conflict of interests for the company. The tenth standard states that suppliers need to keep off corruption and unethical practices either in the private or public sectors.

Finally, Walmart states that suppliers should keep accurate and legitimate financial records reflecting their transactions with the store as a means of upholding financial integrity. The records should be made available during planned or impromptu audits. While the standards look good on paper, it is rather obvious that ensuring that the supplier meets them is a tall order for Walmart, which is ranked as the world’ s largest single retailer. With over 65,000 suppliers in 2006, there is little doubt that monitoring compliance is no small undertaking for the retailer (Dixon, 2006, p.

6). To ensure that such suppliers abide by the ethical standards as contained in the manual, Walmart would have to conduct regular audits of the suppliers. Currently, the International Labour Rights Forum (ILRF, 2007, p. 5) observes that the chain store lacks the capacity to implement the standards over its large supply chain or even audit suppliers for compliance.

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