April 24 (Bloomberg) -- Wal-Mart Stores Inc., the world’s largest retail chain, announced the retirement of two directors, including former Chief Executive Officer Lee Scott, shrinking its board to 14 members.
Scott, who ran Wal-Mart from 2000 to 2009, and Chris Williams, the head of Williams Capital Group LP, will step down on June 6, according to a statement yesterday. Williams had served as a director for 10 years and is rotating off the board as part of the company’s corporate-governance guidelines, Wal-Mart said.
The Bentonville, Arkansas-based company is making the changes ahead of its annual gathering of shareholders in June. The board faced criticism at last year’s meeting over bribery allegations overseas. Then-CEO Mike Duke and two other board members received less than 90 percent of shareholders’ votes at the meeting, underscoring the concerns.
The company also is struggling to revive earnings growth. In February, it issued an annual profit forecast that fell short of analysts’ estimates, hampered by a still-sluggish U.S. economy and government benefit cuts. Doug McMillon, who took the CEO job in February, is attempting to boost growth with smaller-format stores.
Under Scott, Wal-Mart refined its distribution network, gaining efficiency and building one of its key advantages over rivals. He also oversaw the company during the period in which it’s accused of foreign corruption.
The company is alleged to have bribed officials in Mexico to clear the way for store openings. Scott and other executives were briefed about the alleged payments after they were first probed in 2005, the New York Times reported in 2012. Scott, who turned 65 last month, was followed in the CEO job five years ago by Duke, who passed the reins to McMillon this year.
At last year’s meeting, venture capitalist James Beyer rotated off the board, consistent with Wal-Mart’s guidelines. He was replaced as lead independent director by emeritus Harvard University professor James Cash Jr. Two other members, M. Michele Burns and Arne Sorenson, also rotated off the board.
At the time, shareholder advisory firm Glass Lewis & Co. recommended voting against Cash, citing the bribery allegations against executives in Mexico. Before the scandal, Duke and other board members had typically received shareholder votes of 99 percent or more.
The U.S. Justice Department and the Securities and Exchange Commission also are investigating the allegations as potential violations of the Foreign Corrupt Practices Act. Wal-Mart has said it’s cooperating with the inquiries.
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