Walmart 2003 Annual Report Download - page 6

Fellow Shareholders and Associates,
I feel that it is important to
communicate directly with you in
this time of increased scrutiny of
corporate governance practices, and to
share with you my perspective on the
governance of your Wal-Mart.
I became chairman of the board in
1992, upon the death of my father,
Sam Walton. It is a responsibility I
take seriously. The long-term success of
Wal-Mart and of our Associates is a
matter of personal and family pride, and
an important part of this success is good
governance practices.
First and foremost, a culture of ethical
behavior underlies all that we do at
Wal-Mart. All of us who worked
with my father remember the
many talks he gave stressing the
importance of honesty, integrity
and fairness in our dealings with
our Customers, suppliers,
Associates and the communities
in which we operate. David
Glass, your former chief
executive officer, and Lee Scott,
your current chief executive
officer, have continued that
commitment. Setting the right
ethical tone at the top is the first
step towards good corporate
governance at Wal-Mart.
We are committed to maintaining a
diverse and engaged board of
directors to oversee your Company.
Our directors have varied and
distinguished backgrounds, a wealth
of expertise, and broad experience in
many industries. Qualified directors
alone, however, do not assure good
corporate governance; directors also
must act responsibly and ask tough
questions of management. Procedures
are no substitute for penetrating
inquiry, open minds and open
discussion. The board engages in, and is
committed to, vigorous and open debate
and discussion on issues facing the
Company. I am proud of the directors
who serve you. They, too, take their
responsibilities seriously, and are
diligent in carrying out their duties.
Many commentators on corporate
governance advocate separating the roles
of Chairman of the Board and Chief
Executive Officer. At Wal-Mart, these
positions have been separate for
15
years. This may not be right for every
company, but it works well for your
Company. In addition to my duties as
Chairman, I advise and support Lee and
our entire management team on
strategic issues, expansion and
acquisition opportunities, corporate
policies and governance issues, and –
most important to me – the
identification, development, education
and retention of a strong and deep
pool of talent to manage Wal-Mart in
the future.
Wal-Mart’s directors are elected
annually, and the Company has been
committed for years to having a
majority of independent outside
directors. However, our board also
includes directors who have
comprehensive, hands-on knowledge
about the Company’s operations;
namely David Glass, Lee Scott and Tom
Coughlin. These “inside directors”
provide a perspective on the Company
that we believe is crucial to its
continued success. Overall, the strength
of your Company’s board comes from a
mix of inside directors who have in-
depth knowledge of the Company, and
outside directors who bring fresh
viewpoints and unique perspectives to
the issues facing the Company.
The Walton family is a large Shareholder
of your Company, and the family’s
interest in the long-term success of the
Company is aligned closely with the
interests of all Shareholders and
Associates. Like you, the family wants
your Company to grow and prosper. The
family’s commitment is reflected by my
service as chairman, and by that of my
brother, John, as a director. The family
believes that all Shareholders should
benefit from our active participation.
A Letter
from the
Chairman
of the Board
4
Rob Walton