Wal-Mart Stores Inc., which previously had required its suppliers to adopt new technology and embrace environmental initiatives, now intends to pro them to hire more women and minorities on their staff.
Wal-Mart has begun informing its major suppliers that it wants their help "in bringing more diversity to the team of supplier representatives" who provide merchandise to the retailer, according to an internal memorandum that chief merchandising officer John Fleming circulated last week. Wal-Mart, which tallied $345-billionin sales last year, does business with 60,000 suppliers globally.
Many aspects of the nascent program remain undetermined by Wal-Mart, including how many suppliers will be asked to comply and what, if any, requirements will be binding.
"I think this could be a discussion with any supplier we work with in much the same way we discuss price leadership and supply-chain initiatives," Mr. Fleming said in an interview.
The program was reported this week in the Financial Times.
The initiative, which Wal-Mart has entitled the "supplier diversity program," stems from a similar effort undertaken by Wal-Mart’s legal departments at its headquarters in Bentonville, Ark.
Wal-Mart expanded its legal department to 150 lawyers this year from 56 in 2002 partly by recruiting at events hosted by minority bar associations. Female lawyers now make up 44 per cent of the departments rank and minority lawyers 31 per cent, up from 35 per cent and 11 per cent, respectively in 2002.
In 2005, Wal-Mart general counsel tom Mars took the initiative a step further by informing Wal-Mart’s top 100 outside law firms that they would be graded not only on price and performance but also on the diversity of their staffs servicing Wal-Mart. In the wake of that mandate, Wal-Mart has fired three outside firms and reduced the workloads of two others for failing to show progress on diversity matters.
The advent of the supplier-diversity program comes as Wal-Mart deals with a massive class-action lawsuit leveled by current and former female employees who allege they were denied promotion by the retailer and paid less than male counterparts.
The lawsuit, filed in 2001, was upheld this month as a class-action case by a federal appeals panel and could result in a settlement that some analyst estimate in the billions of dollars. Wal-Mart has denied the accusations. Mr. Mars said the lawsuit "has nothing whatsoever to do" with Wal-Mart’s expanding diversity initiatives.
Wal-Mart declined to divulge the ethnic composition of its headquarters staff.