Corporate governance

GRI: 102-20; 102-24; 102-26; 102-27; 102-30; 102-31; 102-43; 405-1
G | Published: April 21, 2022

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.

Corporate governance

Key metrics

Metrics180
CY2020
CY2021
CY2022

Director independence—
Independent directors as a percentage of all directors

Director independence—
Non-management directors as a percentage of all directors

64% Independent

91% Non-Management

67% Independent

92% Non-Management

64% Independent

91% Non-Management

Director diversity—Female directors as a percentage of all directors

Director diversity—Female and/or racially/ethnically diverse directors as a percentage of all directors

27% Female

36% Female and/or racially/ethnically diverse303

25% Female

17% Racially/ethnically diverse

27% Female

18% Racially/ethnically diverse

Board and committee meeting attendance rate—meetings attended as a percentage of all meetings97% (FY2020)98% (FY2021)98% (FY2022)
Shareholder engagement—percentage of public float engaged since preceding annual shareholders’ meeting38%33% 34%

Relevance to our business & society

Strong corporate governance 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.

Walmart's Corporate Governance Guidelines
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 47% 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 are members of our Board at any given time; the Board believes 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.

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. This practice was codified in our Corporate Governance Guidelines in 2020.

Board demographics

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Board skills and ESG oversight

Our director selection/evaluation criteria and Board education help the Board ensure effective oversight of ESG priority issues:

Director selection and evaluation: Because Walmart takes a shared-value approach and integrates ESG priorities into the company’s strategic objectives, the Board believes that our approach of seeking directors with the skills and experiences identified in the Proxy Statement has resulted in a Board whose backgrounds, skills, and experience are appropriate for oversight of the company’s ESG strategies. 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 many of our priority ESG topics. The Board annually evaluates its own performance with reference to this skills matrix and identifies areas where the board believes there may be opportunities to fill gaps.

Director education: The Board stays apprised of matters relevant to Walmart's business and broader trends so that the Board can exercise appropriate oversight and serve as a strategic resource to management. Education can take place through written materials, speakers, presentations, and observational visits in the field.

Board Skills Criteria and Qualifications-Coporate Governance@2x-100.jpg

Effective oversight of strategy, risk & opportunities

Board and management roles and responsibilities

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.

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, and competitive, economic, and other developments. 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 risk

Taking reasonable and responsible risks is an inherent part of Walmart’s business and is critical to our continued innovation, growth, and achievement of our strategic objectives. The Board and the Board committees actively oversee and monitor the management of the most significant risks that could impact our company. The Board does not view risk in isolation, but instead considers risk in conjunction with its oversight of Walmart’s strategy and operations. Walmart identifies, assesses, and assigns responsibility for managing risks through its annual enterprise risk management process, other internal processes, and internal control environment. The Board, Board committees, and management coordinate risk oversight and management responsibilities in a manner that we believe serves the long-term interests of our company and our shareholders through established periodic reporting and open lines of communication.

Board Oversight-CG@2x-100 (1).jpg

Board and management oversight of ESG

Management is responsible for developing Walmart's ESG strategies and accountable for progress, while the Board and NGC exercise oversight over Walmart's overall ESG strategy and certain priority issues.

Management accountability

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 through a team led by Walmart's Vice President, ESG. The CSO reports to our Executive Vice President, Corporate Affairs and updates the Walmart executive leadership team on ESG strategies and priorities.

Walmart’s ESG Steering Committee is a management committee that stays informed of ESG strategies 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 functions that drive Walmart's strategies on priority ESG issues—including Ethics & Compliance, People, Global Public Policy and Government Affairs, and Sustainability (including Climate strategy) —as well as leaders responsible for Walmart's corporate reporting—including the Office of the Corporate Secretary, the Controller’s Office, Investor Relations, and Global Audit.

Board oversight

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.

The CSO provides updates on our ESG agenda and progress to the Nominating and Governance Committee of the Walmart Board. In 2021, the Nominating and Governance Committee of the Board discussed:

  • Walmart's shared value approach to ESG and its integration into our business strategies
  • Walmart's ESG priority issue set and the 2021 refreshment process
  • Walmart's ESG strategies and progress against those strategies
  • Trends and rising expectations with regard to ESG matters—including key investor areas of interest, the ESG ratings landscape, and emerging disclosure regimes—and Walmart's strategies to prepare for and address them

Discussions in 2021 included but were not limited to:

CommitteeESG Issues Overseen2021 Discussion Topics
Audit committee
  • Ethics and compliance
  • Cybersecurity and information security
  • Ethics & Compliance program
  • Cybersecurity, information security, data privacy, and digital citizenship
Compensation and Management Development CommitteeHuman capital management, including:
  • Workforce development
  • Education and training
  • Compensation and benefits
  • Culture, diversity, and inclusion strategies, programs, and initiatives
  • Compensation and benefits strategies and plans, including continued investments in wages, benefits and career training
  • Senior leadership development and succession planning
  • COVID-19 response, including policies and practices to promote the safety of associates and customers
  • Diversity, equity and inclusion strategies and programs; diversity metrics and progress
  • Pay equity review
Nominating and Governance Committee
  • Social, community, and sustainability initiatives
  • Charitable giving
  • Legislative affairs and public policy engagement
  • Updated climate risk assessment; governance, mitigation, adaptation, advocacy, and reporting strategies; progress to date; and focus areas
  • Federal government affairs strategies and topical focus areas, political action committee strategies and activities, international government affairs strategies, and approaches to weighing in on social issues
  • Walmart charitable giving strategy and results

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 salaried associates'—including officers’—annual performance rating and compensation. Diversity, equity, and inclusion are part of the leadership expectations against which officers’ performance are evaluated. 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.

Engaging regularly with & receiving feedback from stakeholders

We value regular engagement with and feedback from a wide variety of stakeholders, including customers, associates, suppliers and communities. We also recognize the value of listening to the views of our shareholders and other stakeholders, 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 FY2022, in addition to our customary participation at industry and investment community conferences, investor road shows and analyst meetings. Since our 2021 Annual Shareholders’ Meeting, we invited >30 institutional shareholders representing ~550 million shares, including many of our largest investors, to participate in our outreach program. We ultimately engaged with shareholders representing ~490 million shares, or about 34% 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.

Shareholder engagement on ESG issues

We engaged shareholders and the broader investment community on ESG topics in several ways in FY2022, including:

  • Discussing in our February 2021 Investment Community Meeting how our shared value approach aligns our ESG priorities with our business strategy
  • 1-1 discussions with individual shareholders through our 2021-2022 annual shareholder engagement program and on-request engagements
  • Engagements with shareholders who filed proposals as part of the 2021 proxy season
  • Hosting two interactive webinars on Walmart's climate and human capital strategies, reaching over 200 participants
  • Involving shareholders in Walmart's ESG priority assessment

Questions and feedback received from shareholders and the broader investment community have helped us define our ESG priorities and shape and enhance our ESG disclosures.

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. And Walmart must find the right balance of skills, experiences, and expertise to provide strategic and risk management oversight and serve as a strategic resource to management. 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 this low turnover also means that shifts in demographics and optimization of skills takes 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