Wal-Mart and SEC regulations

The main responsibility of the Security Exchange Commission is to enforce the federal securities laws and to monitor the stock market. Moreover, besides the Act of 1934, the SEC also enforces several other laws like the Securities Act, the Investment Advisors Act, the Sarbanes Oxley Act, the Investment Company Act, and the Trust Indenture Act (SEC, 2008).

According to a report from 2004, Wal-Mart Inc. has filed of complying with SEC regulations due to an error in declaring some stock ownership of over ten percent. Wal-Mart has broken the SEC regulations and did not report such changes on time, until later in 2004, instead of December 31, 2004. According to the report from Wal-Mart Stores Inc. (2004, p.22), “the Company believes that all Section 16(a) filing requirements were met except that late reports were filed by Messrs, Breyer, Gault, Hernandez, Shewmaker, and Opie with respect to the quarterly director retainer that these outside directors received in Shares or stock units on December 31, 2003.”

However, there are obvious attempts from Wal Mart to comply with SEC regulations and to respect the rights of the shareholders, employees and the sustainability measures that are required for any business. As detailed on Wal-Mart’s website in the Corporate Governance-Committee Information section, the Audit Committee is responsible for implementing the SEC regulations and insuring that they are respected. This Committee ensures that all the policies of the company agree with the federal laws and with the company’s policies, while it offers makes sure that the level of communication with the investment professionals is kept at high standards through  “one or more analysts meetings held throughout the year, each of which will be publicly web cast; periodic pre-recorded conference calls regarding the Company’s financial results, each of which will be accessible by the public at large; one-on-one meetings with and presentations to Investment Community Members; provided, that, any such meetings will be subject to the requirements immediately below; and an annual shareholders’ meeting that will be publicly web cast (Wal*Mart Inc, 2009, p. 1).

The internal audit department ensures that the Company meets the SEC regulations. The internal audit ensures that Wal-Mart's all employees understand and follow the code of conduct. The company's set of values are in accordance with the SEC regulations and there is a formal compliance and ethics program that ensures that the values are followed by all the employees. In addition there is the audit committee charter, the corporate governance guidelines, policy for audit, audit related services and disclosure committee charter, which are responsible for complying with SEC regulations.

Respecting the SEC regulations means more than just the audit and related departments. Basically, it means that all departments and al employees have to be trained on how to apply the procedures and processes; they have to know and understand the legal aspects of the business in order to comply with these regulations. Form a wide perspective, Wal-Mart uses all its employees to comply with SEC regulations, not only the financial audit and related departments.  

Bibliography

Halme, T. (2008). Wal-Mart Stores - company Sustainability Analysis . Retrieved June 26, 2009, from http://www.fiaweb.nl/CenComp/examples/20080826%20Wal-Mart%20Stores%20sustainability_analysis.pdf

SEC. (2008). The Laws That Govern the Securities Industry. Retrieved June 26, 2009, from http://www.sec.gov/about/laws.shtml

Wal*Mart Inc. (2009). Investment Community Communications Policy. Retrieved June 2009, from Search: SEC Compliance: http://walmartstores.com/download/3492.pdf

Wal*Mart Inc. (2009). Jeffrey J. Gearhart. Retrieved 2009, from http://walmartstores.com/Investors/8961.aspx?p=7823

Wal*Mart Stores Inc. (2004). Notice of Annual Shareholders' Meeting. Retrieved June 26, 2009, from http://walmartstores.com/Media/Investors/proxy_2004.pdf

Corporate social responsibility and business

Business became very powerful today, even though in the last years it has proved many times that the power accumulated by only a few companies can have a negative impact on the economy of the nations and in the same time the social costs that have to be paid because of the reckless attitude of big financial corporations. The free market that was described by Adam Smith, where buyers and sellers meet with each other and possess equal power and information is as romantic and naïve as it can be in a word dominated by multinational companies that are so big so powerful and so wealthy that are dominating and ruling the entire economy (Henderson, 1996, p. 158). The power that corporations have today is so big that can affect the life of the social communities in a very dramatic way. Corporations became so much powerful that they can literally decide to create a new city or to destroy one. “A corporate decision on the location of a plant may create a new city or destroy an old one.” (Estes, 1996, p. 179). This power however should come with a lot of responsibilities and regulation and in the same time with a lot of studies of the aggregate costs of corporation, studies that should be made by the Congress, that are actually not intended. Although the costs of implications of those companies became bigger and bigger once with the expansion and the evolution, there are not any direct evaluations of the harm that those business caused to the environment and the people because of their activities.

If someone would evaluate correctly the benefits and the negative aspects of corporations would found out that the society has lost a lot because of the development of their business. The corporations became in time much more powerful than the small companies did. The corporations suffered dramatic mutations from their initial purposes of serving the public interest and  becoming interested only on accumulating financial sources and serving the private interests of a small amount of powerful companies and their shareholders: “The history of corporation is the history of a dramatic mutation of purpose , from serving the broad public interest to serving only the private interests represented by the bottom line” (Estes, 1996, p. 192 ). This fundamental change of the companies in the social structure has determined great loses and great social costs to stakeholders. Although there is no study about the impact of the implication of those corporation, there is a estimation that much part of the federal deficit can be linked to the damage and misbehavior of the corporation that understand to carry their activity by damaging the environment. Many of those companies however are deeply implicated in the policy and have access to media and to influential policymakers (Estes, 1996, p. 192). It is no wonder that the Congress never had the intention of funding a study of the aggregate costs of corporations. The corporations benefit a lot from the numerous protective tariffs, special tax deduction, foreign tax credits, defense contracts, direct bailouts that not only helped them getting even richer, but also had a big impact on the world economic environment: “Congress has never funded a study of the aggregate cost of corporations. The accounting profession, while it has spent millions of dollars assessing such issues as the cost of regulation on corporations, has never evaluated the cost of corporations on society” (Estes, 1996, p. 192).

References:

Estes, R. W. (1996). Tyranny of the bottom line: why corporations make good people do bad things. Berrett-Koehler Publishers.

Henderson, H. (1996). Creating alternative futures: the end of economics. Kumarian Press.