Having served as a Chairman, CEO and board member of large multi-national companies, I know something about the challenges involved in managing far-flung operations.
I also know that any allegation of a breakdown in control processes, management responsibilities or corporate values must be thoroughly investigated.
Facing extremely serious charges of large-scale briberyand a multi-year cover-up, the Wal-Mart Board should immediately appoint a completely independent team to determine the facts. This team should include outside investigators, outside counsel and independent Board members. Given the nature of the allegations, this team must separate itself from management at all levels of the company, including in the Board room. This team should have complete latitude and authority to follow the investigation wherever, and to whomever, it leads.
While this investigative team must have broad authority, its own conduct must be beyond reproach. The team cannot convince itself that ‘the ends justify the means”, nor should it use techniques that will tarnish its findings. They should recall the HP pre-texting scandal, where the investigation into leaks from the Board room turned out to be worse than the original crime.
The Board must also protect the Wal-Mart franchise during this investigation.
Wal-Mart has attracted its fair-share of critics who attack the success, size, impact and business-model of the company. Many of these critics will re-emerge, trying to take advantage of the company’s current difficulties. No doubt there are also opportunistic lawyers out there who are already trying to “recruit” shareholders for possible lawsuits, hoping to pressure the company into settling even spurious claims during a time of reputational risk.
We may see more leaks from within the company. People leak company information for all kinds of reasons: to right a perceived wrong, but also sometimes to settle a score or to protect or burnish their own reputation. Some leaks are accurate, some are not.
In an environment of constantly swirling headlines and “revelations”, the Wal-Mart Board and its independent committee should avoid speculation or pre-mature disclosure. Rather, they should be completely transparent about the process they are using to get to the truth. This should include the names of the independent Board members, who are providing investigative and legal services, to whom the team will report its findings and when they expect to be able to report progress. Shareholders should be satisfied with this disclosure for the time being, but should expect relatively rapid progress on the investigation.
Ms. Fiorina is the former Chairman and CEO of Hewlett-Packard . She has served on the Boards of Cisco, Kellogg, Merck and Taiwan National Semi-Conductor. She is currently Chairman of Good 360, the largest on-line product donation marketplace in the world.