Walmart Role of Ethics and Compliance Compliance Essay

Excerpt from Essay :

Walmart

Role of ethics and compliance

Compliance and SEC Regulations

Evaluation of financial performance

Trend of ratios and financial health

Wal-Mart Stores, Inc. (WMT) is an American publicly traded retail stores corporation. The operations of Wal-Mart are divided into three segments, namely the Wal-Mart International segment, Wal-Mart U.S., and the Sam's Club segment. Sam Walton was the founder of the company whereby Wal-Mart is the world's largest retail stores chain. Based in Bentonville, Arkansas, the U.S., Wal-Mart U.S. is the largest business segment of the company that accounts more than 60% of the total business of Wal-Mart. With operations in more than 14 countries internationally, 25% of the business is related to Wal-Mart International. With more than 2 million employees, the company has subsidiaries such as Asda, Sam's Club, Walmex, and Seiyu Group. The main business operations of Wal-Mart are conducted through hypermarkets, supermarkets, superstores, supercenters, warehouse clubs, discount stores, and cash & carry stores. Wal-Mart's 2011 and 2012 revenues were $418.952 billion and $443.9 billion respectively (Annual Report, 2011; Annual Report, 2012).

The main rationale of this report is related to describing the role of ethics and compliance in the financial and corporate reporting of Wal-Mart. This paper will also describe the procedures that Wal-Mart adopts to ensure ethical behaviors within the organization and communities where it operates. This paper will also analyze company's performance during fiscal years 2011 and 2012 while key financial ratios such as current ratio, debt ratio, and return on equity will also be reported. These key financial ratios will help assess the future performance of Wal-Mart with respect to recent economic challenges that large scale retailers face in the recessed economy of the U.S. And Europe. This will be used to evaluate the financial health of Wal-Mart.

Role of ethics and compliance

Wal-Mart is the world's largest private employer and manages largest retail store network in the U.S. And abroad. This earns the company high recognition for its services as a private employer but there are many challengers as well. The company has to maintain ethical behavior both within and outside the organization. Wal-Mart is one of the few organizations that have effectively managed its ethical aspect of operations and organizational development. The company issues 'Statement of Ethics' for reporting the ethical compliance by the organizational executives and concerned stakeholders. The main stakeholders that are covered in the Ethics Statement are:

Directors and Associates of Wal-Mart

Third parties (Wal-Mart, 2013)

Since the footprint of company's operations is such vast that until it does not brings its suppliers and other third parties associated to the company within the fold of its ethical compliance, there remain considerable chances that Wal-Mart would be criticized for not responsible as a corporate citizen. The company engages many law firms, consultants, public relations firms, contractors, and suppliers. All these are covered within the Statement of Ethics. The company has specifically established Global Ethics Office where each and any ethics issue can be reported by the company associates. The company has also established a self-reporting mechanism for business violations and each associate of the company is entitled to report such violations through the Global ethics office of Wal-Mart. To comply with the regional and respective country's regulatory frameworks, the company has developed an organizational structure incorporating the position of Global Compliance Officer (Wal-Mart, 2012).

Compliance and SEC Regulations

The company has recently strengthened the global compliance and reporting standards. This was to ensure that wrongdoings and any other misconceptions regarding ethical issues are dealt effectively within the company before them matter is reported to a regulating agency such as SEC. The company has established the position of 'Global FCPA Compliance Officer' at its corporate headquarters in the U.S. To increase the control of company on the operations of each country and within the U.S., the ethics officers of the company report to the Chief Ethics Officer of the Wal-Mart International instead of company's CEO in respective country.

The company regularly files its annual report with Securities and Exchange Commission (SEC). Forward looking statements are also made part of the annual reports submitted through form 10-k. The company also files required certifications regarding consolidated financial statements. The corporate governance listing standards of SEC and NYSE are also reported by the company in the form of a separate document in the firm 10-k. Through its financial…

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