CORPORATE COUNSEL: Can you tell us a little bit about how your compliance
program is set up and how it is managed?
JAY JORGENSEN: Over the last four years, Wal-Mart has built a unified, global
ethics and compliance program. Wal-Mart operates over 11,500 retail locations
in 28 different countries, and with that large footprint we debated whether to
structure our program as a single program or to have separate teams for each
market and division. We decided to build a unified global organization that
reports to the corporate home office but also maintains close ties to the business in our retail markets. To make this happen, we have appointed a chief
ethics and compliance officer for each of our divisions and retail markets.
Each of these CECOs supervises a staff of subject matter experts and sits on
the relevant business leadership team, but reports to our corporate center.
This has worked well. By centralizing the function we’ve achieved greater
transparency and consistency in our program, but we still have localized
influence and knowledge. Wal-Mart has been engaged in a multiyear effort
to build up and refine our ethics and compliance capabilities. Over the last
four years we separated the function from our legal team, so the two teams
work together to understand and address risks. Currently we have about
2,300 associates who work full-time in Wal-Mart’s ethics and compliance
group. We’ve also built global systems to manage and monitor our workflows and data relating to ethics and compliance. Wal-Mart has invested over
$141 million in systems relating to ethics and compliance since 2013. Our
program is directed by the company’s board and senior leaders. As the global
chief ethics and compliance officer, I develop the company’s strategic vision
for our ethics and compliance program and I report directly to the audit committee of the Wal-Mart board of directors as well as to senior management.
CC: If I’m a new compliance lawyer or setting up a compliance program at a
company, what are some of the key things I should think about?
JJ: Every company has different risks and a slightly different approach to
which of those risks will be managed through the compliance program. For
example, Wal-Mart’s ethics and compliance program manages 14 different
subjects from anti-corruption to licenses and permits to food safety. But
we don’t manage tax compliance or cybersecurity risks. Those are handled
by other specialized experts in the company. It’s critical that a company’s
leaders understand the enterprise’s compliance risks and who is managing them. If there’s ambiguity on this, risks may go unaddressed because
of confusion over how they are to be handled. As a new compliance lawyer the first three questions I would ask are: How will I know what the
company’s risks are? How will the company manage these risks? How
will I stay current in managing the risks that are assigned to the compliance team? Engaging the company’s leaders on these topics will help
clarify not just the compliance team’s role, but also the responsibilities of the other individuals and groups that help govern the company. I would add one question to ask even before agreeing to take
a compliance job. Will you have the resources and access to senior
business leadership to do your job effectively? A compliance program can’t completely eliminate risk, but having the right budget
and a structure that gives you access to senior leadership (who
can help prioritize compliance in the company’s activities) is
essential to building an effective program. For more of this
Q&A, go to www.corpcounsel.com
INTERVIEW ❘ JAY JORGENSEN, GLOBAL CHIEF ETHICS
AND COMPLIANCE OFFICER, WAL-MART STORES INC.