A DECISION BY DOUG MCMILLON ... HAS GIVEN US AN OPPORTUNITY TO PUT THE BUSINESS ROUNDTABLE’S NEW CRITERIA TO THE TEST.
The Roundtable has drawn criticism for its statement from observers who note its vagueness and the fact that it doesn’t say much about just how the criteria are to be met. Alfred Rappaport, a long-term student of corporate governance, has asked how, for example, the needs of all constituents are to be met in decisions concerning issues such as pricing, the allocation of resources, incentive compensation, or investments in socially motivated initiatives? He asks how a CEO avoids addressing the needs of one stakeholder too much or too little for too long? Others have suggested that the new statement will be paid lip service only.
Let’s give it a test drive right here. Within the past few weeks, a decision by Doug McMillon, CEO of Walmart (and, by implication, the Walmart board), has given us an opportunity to judge the Roundtable’s new criteria. (Worth noting: McMillon was named chairman of the Business Rountable on September 19.)
Following the killing of two store workers by an angry former employee at a Mississippi Walmart and a mass shooting around a Walmart store in El Paso, Texas, the Company announced it would:
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