Corporate governance

GRI: 102-20; 102-24; 102-26; 102-27; 102-30; 102-31; 102-43; 405-1
G | Last Updated: July 7, 2021

Our aspiration

Our aspiration

We aim to create an environment of accountability, transparency and trust in our business that fosters business integrity, financial stability, and responsible and long-term growth.

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Key metrics

Metric 180
FY2019
FY2020
FY2021
Director independence

67% Independent

92% Non-Management

64% Independent

91% Non-Management

67% Independent

92% Non-Management

Director diversity

25% Female

33% Female and/or racially/ethnically diverse

27% Female

36% Female and/or racially/ethnically diverse

25% Female

17% Racially/ethnically diverse

Board and committee meeting attendance rate95%97%98%
Shareholder engagement, as a % of public float engaged since preceding annual shareholders’ meeting30%38% 33%

Relevance to our business & society

A strong corporate governance system makes companies more resilient by promoting strategies for long-term success and growth, helping the company consider the best interest of all stakeholders, improving management systems and minimizing risks of mismanagement, and instilling trust with investors.

Our corporate governance practices help us live up to our values and deliver superior service and results to our customers, associates, suppliers, business partners, and communities, while creating long-term value for shareholders.

Walmart’s approach

Strong corporate governance starts with setting the structures and incentives to help the company thrive in the long term and flows through to everyday practices.

Our approach to corporate governance includes:

  • Maintaining a majority independent Board with diverse backgrounds and relevant experiences and skills
  • Effective Board and management oversight of strategy, risks, and opportunities
  • Developing a talented and diverse pipeline of leaders 
  • Designing compensation programs to support our enterprise strategy and to align our leadership team with our culture, strategy and organizational structure
  • Engaging regularly with and receiving feedback from a wide variety of stakeholders, including shareholders, customers, associates, and suppliers

Key strategies & progress

Maintaining a majority independent Board with diverse backgrounds and relevant experiences and skills

Walmart’s Board of Directors has oversight responsibility for our company’s business strategy and strategic planning. The Board’s oversight and our management’s execution of our business strategy are intended to help promote the creation of long-term shareholder and stakeholder value in a sustainable manner, with a focus on assessing potential opportunities and risks.

The Walmart Inc. Board of Directors (“Board”) has adopted a set of Corporate Governance Guidelines which serve as a flexible framework to assist the Board in the exercise of its responsibilities. These guidelines are reviewed at least annually and updated as appropriate in response to evolving best practices, regulatory requirements, feedback from our annual Board evaluations and recommendations made by our shareholders, all with the goal of supporting and effectively overseeing our ongoing strategic transformation.

The Board reviews its leadership structure annually and has designed it to promote robust oversight, independent viewpoints and the promotion of the overall effectiveness of the Board. Approximately 49% of our company’s shares are held by members of the family of Sam Walton, our company’s founder. Three generations of Walton family members have served on our Board, which demonstrates the Walton family’s interest in and commitment to the long-term success of our company. Historically, three members of the Walton family have been members of our Board, and the Nominating and Governance Committee (NGC), and the Board believe this is appropriate in light of the Walton family’s significant and long-term share ownership. Our CEO also serves on the Board, and our former CEOs have historically served on the Board for a period of time after they retire. Our incoming CEOs have supported this practice, and we believe this practice has contributed to successful CEO transitions during our company’s history.

Consistent with our Board’s commitment to independent Board oversight, the Board generally seeks to fill the remaining Board seats with directors who are independent as defined in the NYSE Listed Company Rules. In addition, we have separated the Chair and CEO roles since 1988 and had a Lead Independent Director role since 2004.

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We believe an effective Board should be made up of individuals who collectively provide an appropriate balance of distinguished leadership, diverse perspectives and viewpoints, strategic skill sets, and professional experience relevant to our business and strategic objectives.

The Nominating and Governance Committee (NGC) of the Board selects potential Board candidates on the basis of outstanding achievement in their professional careers; broad experience and wisdom; personal and professional integrity; ability to make independent, analytical inquiries; experience and understanding of the business environment; willingness and ability to devote adequate time to Board duties; and such other experience, attributes, and skills that the NGC determines qualify candidates for service on the Board. The Board understands the value of diverse membership and it is the policy of the Board to include and to instruct search firms to include women and minority candidates among the pool of potential Board candidates to be considered by the NGC.

The NGC and Board regularly review the skills and experiences relevant to our Board in light of our ongoing strategic transformation. Depending on the current composition of the Board and Board committees and expected future turnover on our Board, the NGC generally seeks director candidates with experience, skills or background relevant to the successful oversight of our strategy and relevant to effective oversight and governance. Given our shared value approach and the integration of ESG priorities into the company’s strategic objectives, the total mix of skills and experiences sought includes backgrounds, skills, and experience useful for oversight of the company’s ESG strategies (over which the NGC also exercises oversight). Moreover, seeking out individuals with certain skills and experiences—including individuals with retail experience; global or international business experience; senior leadership experience; regulatory, legal or risk management experience; financial reporting experience; and diverse candidates—will yield Board candidates that are likely to have significant experience with our priority ESG topics.

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Effective Board & management oversight of strategy, risks & opportunities

The Board has oversight responsibility for Walmart’s business strategy and strategic planning. Walmart operates in a rapidly changing retail environment. Shifts in market fundamentals, social and environmental issues, technology, and customer preferences require significant Board engagement with our strategy. As Walmart continues to transform its business, the Board works with management to respond. Given the iterative nature of this transformation, the Board’s oversight over strategy is a continuous process.

The Board has created standing committees to enhance the effectiveness of the Board’s oversight function and ensure appropriate focus on matters of strategic and governance importance. Currently, the Board has six standing committees:

  • Strategic Planning and Finance Committee
  • Technology and eCommerce Committee 
  • Audit Committee 
  • Compensation and Management Development Committee 
  • Nominating and Governance Committee 
  • Executive Committee

Throughout the year, the Board and its committees oversee and guide management with respect to a variety of strategic matters, and strategic matters are frequently discussed during Board and Board committee meetings. The Board regularly reviews its committee structure and committee responsibilities to ensure that the Board has an appropriate committee structure focused on matters of strategic and governance importance to Walmart.

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While the Board and its committees oversee our strategic planning process, management is responsible for executing our strategy. The Board receives regular updates and engages actively with our senior management team regarding key strategic initiatives, technology updates, competitive, economic, social and environmental trends, and other developments. Since the emergence of COVID-19, the Board has also been engaged in monitoring the impact of COVID-19 on the company’s strategy. In addition, certain Board meetings are enhanced with “hands-on” experiences, such as visits to our stores and other facilities or technology demonstrations.

The Board’s oversight and our management’s execution of our business strategy are intended to help promote the creation of long-term shareholder and stakeholder value, with a focus on assessing both potential opportunities available to us and risks that we might encounter. To read more about oversight of risk management, read our most recent annual Proxy Statement, which is available at stock.walmart.com. Read more: Creating shared value.

Board and management oversight of ESG‑related issues

Walmart’s Corporate Governance Guidelines state that, among other things, the Board is expected to show, through its actions, its awareness that the Company’s long-term success depends upon its strong relationship with its customers, associates, suppliers and the communities, including the global community, in which it operates.

Walmart’s Chief Sustainability Officer (CSO) helps define the ESG agenda and provides dedicated management and oversight of Walmart’s global ESG initiatives and goals. The CSO reports to our Executive Vice President, Corporate Affairs and provides updates on our ESG agenda and progress to the Nominating and Governance Committee of the Walmart Board and to the Walmart executive leadership team.

Board committees also have oversight responsibility for matters relevant to ESG issues, including:

  • Audit Committee: oversight of our Ethics and Compliance program, cybersecurity, and information security
  • Compensation and Management Development Committee: oversight of our human capital management strategies, including workforce development, education, training, compensation and benefits matters and culture, diversity, and inclusion strategies, programs and initiatives
  • Nominating and Governance Committee: oversight of our social, community, and sustainability initiatives, charitable giving, and legislative affairs and public policy engagement strategy

Walmart’s ESG Steering Committee is a management committee that stays informed of relevant ESG projects and efforts and works to ensure enterprise-wide alignment on ESG management strategies and priority business initiatives. The Steering Committee meets at least biannually and is composed of leaders from various departments throughout the business, including the Office of the Corporate Secretary, the Controller’s Office, Investor Relations, Ethics & Compliance, Global Audit, People, Global Public Policy and Government Affairs, and Sustainability.

Read more: ESG oversight and management.

Developing a talented & diverse pipeline of leaders

Our Board places a high value in developing a talented and diverse pipeline of leaders. The Compensation and Management Development Committee (CMDC) has primary responsibility for executive succession planning, and senior management development is a regular topic on the agendas for meetings of the CMDC.

At these meetings, the members of our CMDC, in consultation with our CEO, our Chief People Officer and others as the CMDC may deem appropriate, review development plans for current senior leaders, the pipeline of potential future leaders, and executive succession plans, including succession plans for our CEO position. This process has contributed to two successful CEO transitions since 2009. The Board has also adopted a CEO succession planning process to address unanticipated events and emergency situations.

Designing compensation programs to support our enterprise strategy

Our executive compensation programs are intended to motivate and retain key executives, with the goal of generating strong operating results and creating alignment with our shareholders. We have developed our compensation programs to support our enterprise strategy and to align our leadership team with our culture, strategy, and organizational structure.

Our executive compensation program is built upon our global compensation framework:

  • Pay for performance by tying a majority of executive compensation to pre-established, quantifiable performance goals
  • Use performance metrics that are understandable, that are tied to key performance indicators, and that our executives have the ability to impact
  • Provide competitive pay to attract and retain highly qualified talent at all levels
  • Align management interests with the long-term interests of our shareholders by providing long-term incentives in the form of equity, combined with robust stock ownership guidelines
  • Establish performance goals that are aligned with our long-term strategy and financial and operating plans
  • Encourage leadership accountability by tying a higher percentage of compensation to performance at higher levels

ESG priorities & management compensation

Performance on priority Walmart ESG issues is integrated into the annual performance objectives of relevant officers’ roles. Foundational expectations regarding compliance with our Code of Conduct, for example, are part of the process of determining every associate’s—including officers’—annual performance rating and compensation. U.S. officers and other senior leaders also have diversity, equity and inclusion Inclusive Leadership Expectations as part of their annual performance evaluation; failure to meet these expectations places a negative weight on the associate’s performance rating, which can impact base compensation for the next fiscal year and the associate’s annual cash incentive payout for the year at issue. Officers have also built ESG objectives into their individual goals and objectives, which form part of the basis on which their performance is evaluated. For example, our People team leaders have goals and objectives centered on executing our human capital and associate opportunity strategies, our Real Estate leaders have goals and objectives relating to advancing our renewable energy strategies, our operations leaders have goals and objectives relating to waste, and merchandising leaders have goals and objectives relating to sustainable sourcing.

Impacts of COVID-19 on management compensation

The COVID-19 pandemic and related economic disruptions have created challenges for Walmart and for the entire world. We have worked hard to help our communities respond to COVID-19 while prioritizing the health and safety of our associates, especially those serving our customers on the front line. To appreciate our associates’ support of our communities across the country and to support our associates’ financial well-being, we paid our associates in the U.S. four special cash bonuses in addition to our regular quarterly incentive payments. The total special cash bonuses paid during calendar year 2020 exceeded $1.5 billion. The special cash bonuses paid to date total $1,200 for each full-time hourly associate and $600 for each part-time hourly associate, assuming associates were employed on the qualifying dates for each bonus. We also made changes to our leave policies and benefits.

We did not adjust our management incentive goals or exclude any pandemic-related expenses when calculating our incentive results in FY2021. We also did not make any special awards to our named executive officers during FY2021 related to COVID-19. Our management team oversaw a successful FY2021, with strong operating performance yielding above-target payouts under our annual incentive plan and long-term performance equity program.

Engaging regularly with & receiving feedback from stakeholders

We value regular engagement with and feedback from a wide variety of stakeholders, including customers, associates and suppliers. We also recognize the value of listening to the views of our shareholders, and the relationship with our shareholders is an integral part of our corporate governance practices. We conduct shareholder outreach throughout the year to ensure that management and the Board understand and consider the issues of importance to our shareholders and are able to address them appropriately.

Senior leaders and subject matter experts from the company meet regularly with representatives of many of our top institutional shareholders and periodically with leading proxy advisory firms to discuss Walmart’s strategy, governance practices, executive compensation, compliance programs, and other ESG-related matters. Members of our Board participate from time to time in these meetings. Management reports regularly to the CMDC and NGC about these meetings, including feedback on these diverse topics and perspectives shared by our shareholders.

We continued this program of shareholder engagement during FY2021, in addition to our customary participation at industry and investment community conferences, investor road shows and analyst meetings. Since our 2020 Annual Shareholders’ Meeting, we invited more than 50 institutional shareholders representing approximately 520 million shares, including many of our largest investors, to participate in our outreach program. We ultimately engaged with shareholders representing approximately 470 million shares, or about 33% of our public float. We also had conversations with the leading proxy advisory firms. We also respond to individual shareholders who provide feedback about our business. We have had success engaging with parties to understand shareholder concerns and reach resolutions on issues that are in the best interests of our shareholders, and we remain committed to these ongoing initiatives.

Read more: Our ESG priorities and Stakeholder engagement.

Challenges

  • Many companies are seeking board candidates and executives with backgrounds, skills, experiences, and other qualities (including enhancing diversity of Board and management teams) similar to those that Walmart seeks. Walmart Board members typically serve 6-12 years and the Board believes that a board of approximately 12 members is ideal; this promotes stability but also means that shifts in demographics take time.  
  • Walmart’s business is evolving rapidly, and oversight and management responsibility must evolve with Walmart's omni-channel transformation. Moreover, major global events, such as the COVID-19 pandemic, can disrupt our business operations and necessitate rapid changes to our business strategies; the Board and management must collaborate closely to navigate these challenges.  
  • Shareholders express divergent views on certain corporate governance practices, including executive compensation, board term limits, and Board committee structures.  

Additional resources