Wal-Mart Stores Inc. Chairman Robson Walton, son of founder Sam Walton, pledged to shareholders at the company's annual meeting on Friday that it will get to the bottom of recent allegations of bribery.
"Let me be clear. Acting with integrity is not a negotiable part of our business," Walton said to a crowd of about 16,000. "We will do the right thing and the right way. You have my word on that."
The address comes on the heels of a report by The New York Times in April that the world's largest retailer allegedly failed to notify law enforcement after finding evidence that officials authorized millions of dollars in bribes in Mexico to get speedier building permits and other favors.
Federal authorities in the U.S. and Mexico reportedly are investigating Wal-Mart for potential violations. Investors have filed lawsuits against top executives. And some shareholders have called for the removal of several board members, including Walton, CEO Mike Duke and former CEO Lee Scott.
Descendants of Wal-Mart's founder own about 50 percent of Wal-Mart's shares, so activist shareholders have little chance of voting out the board members. But any lack of support for the leaders is a blow to the retailer.
Wal-Mart has said it is overhauling its compliance program and has launched an internal investigation. It disclosed last month that it also plans to widen its internal investigation to other countries.
On Friday, the company went back-and-forth from addressing the allegations and talking about other things at the annual meeting that was in the basketball arena at University of Arkansas about 30 miles from Wal-Mart's headquarters in Bentonville.
The meeting, which Wal-Mart is using to celebrate its 50th anniversary, opened with Walton walking on stage to a replica of Walton's first store.
Walton then shared the stage with his siblings, Jim and Alice. They swapped stories about the early days of working with their father.
"It's a family business. It's just grown a lot," said Robson Walton. He also noted that his father didn't measure success by financial achievement, but rather by "the lives we improved."
Pop singer Justin Timberlake hosted the event, arriving in a hula skirt. That was symbolic of a story told about the founder dancing a hula on Wall Street after he lost a bet. Musical interludes included sessions by R&B legend Lionel Richie, gospel jazz group Take 6 and Latin singer Juanes.
Protests were expected during the meeting but as of 10 a.m. had not materialized.
"Some folks want to interrupt our meeting, but we're hoping they respect all of you," Walton said at the start of the meeting. "But don't be surprised if we do have some interruption."
Another interruption is the last thing Wal-Mart needs at a time when it's beginning to turnaround its business.
The discounter had struggled during the U.S. economic downturn as its core low-income customers were hard hit by joblessness and other challenges in the weak economy.
Its namesake U.S. unit also had veered away from its "everyday low prices" strategy and got rid of popular merchandise. But Wal-Mart last year began adding back 10,000 products and refocused on keeping prices low.
Its strategy is just beginning to pay off. Wal-Mart reported better-than-expected first-quarter profit in the first quarter. Its U.S. namesake unit, which accounts for 60 percent of net sales, turned in its best performance in three years. And its shares have recovered to trade around $65 after falling by more than 7 percent right after the bribery allegations surfaced.
But the accusations still threaten to distract the retailer at a critical time when it's trying to continue its momentum. For its part, Wal-Mart officials have said in recent weeks that the accusations haven't impacted its plans for growth in the U.S. or overseas.
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