Global retailers like Walmart face an extraordinary range of societal issues. Under McMillon, the company has made ambitious commitments to reduce carbon emissions and landfill waste, and it has focused on improving sustainability product by product. For example, Walmart worked on a laundry detergent that is 30 percent more efficient and 50 percent more effective, without using more water—for the same price as regular detergent. In response to shootings in the US, it has eliminated the sale of some ammunition.
Evidence that shareholders can be well served by serving other constituencies is especially strong in regard to Walmart employees. Recognizing several years ago that Walmart faced serious competition from Amazon and sluggish growth in its US stores, McMillon decided to raise wages and increase benefits, a strategy that worried Wall Street, especially in the absence of instantaneous results.
Five years later, nobody is questioning that move. From a low point in late 2015, Walmart’s share price has doubled, as of December of last year. Besides investing billions in wage increases, Walmart has created innovative programs for obtaining debt-free college degrees, and he called on Congress to increase the minimum wage.
McMillon is only the fourth executive to lead Walmart since founder Sam Walton. After six years in the job he’s still only 53.
As Chairman of the Roundtable, McMillon succeeds Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. In the announcement last September of McMillon’s appointment to the Roundtable leadership, Mr. Dimon said, “Doug is a forward-looking leader who understands the importance of a growing and inclusive economy that serves all Americans. At a time when our organization is reaffirming the significance of corporate commitments to workers and communities as a critical piece of creating long-term value, Doug is uniquely experienced to lead by example and ensure our voice is heard.”
Below, McMillon answers questions from Harry W. Clark, Senior Counselor to Brunswick.
Did the intensity of response to the Roundtable statement surprise you?
We did underestimate the response to the corporate purpose statement and it generated more reaction than we expected, both negative and positive, and that’s good because it’s an important conversation at this time in our country’s history.
While the statement made clear that we must preserve and maintain America’s free market system, we also should look at ways that all stakeholders can benefit from the work of the market.
The statement both confirms what companies like Walmart do when it comes to our commitments to all stakeholders and challenges us to do more. Member companies of Business Roundtable have done a lot when it comes to increasing wages, investing in skills training and providing better access to education. Business Roundtable will be doing more to advocate for solutions to increase opportunity for Americans of all backgrounds.
A common theme among skeptics of the statement seems to be that the interests of different stakeholders will always be inherently at odds. While different stakeholders may have competing concerns in the short term, I believe all stakeholders’ interests are inseparable in the long term.
An obvious example is the environment, and the broad and long-term impact that comes from successful efforts on environmental sustainability.
It’s the objective of creating long-term value that makes for successful companies and more opportunity for all stakeholders.
Do Walmart associates expect you to take a position on societal issues?
Over the past few years, we’ve taken stances on several societal issues. I don’t know if our associates expect us to, but I don’t think they’re surprised when we do.
We have 2.2 million associates all over the world. We’re not just in communities, we’re a big part of them. And our environmental sustainability efforts are really investments in communities and people, and I believe they’re appreciated.
As for gun safety, we already had made some changes in our policy on sales of firearms and ammunition, and we wanted to make sure we still served the sportsmen as we made commonsense changes we felt necessary in a changing world. I think most people understand that we’re not trying to make a political statement. We’re just trying to help create a safer environment.