Walmart Takes a Stand, Limits Gun Ammo Sales (September 7, 2019)

Walmart Takes a Stand, Limits Gun Ammo Sales (September 7, 2019)

Board Lens

Walmart Takes a Stand, Limits Gun Ammo Sales (September 7, 2019)

Walmart re-entered the gun-control debate this week, announcing plans to discontinue the sale of short-barrel rifle and handgun ammunition—once current inventory is sold—according to a letter issued by CEO Doug McMillon to employees. Additionally, the retail giant will no longer sell handguns in the state of Alaska. This decision comes in the wake of recent shootings at Walmart locations in El Paso, Texas, and Southaven, Mississippi. The company will also discourage customers from openly carrying firearms in stores, with the exception of authorized law enforcement personnel—even in open-carry states. Walmart is not alone in taking a stand on gun violence; companies including Delta Air Lines, Bank of America Corp., and Kroger Co., have adopted similar stances, Reuters reports

Nor is this the first time the retailer has waded into this debate. In the 1990s, Walmart stopped selling handguns at its stores, with the exception of Alaska; and in 2015 it banned the sale of assault-style rifles. In the aftermath of the mass shooting last year in Parkland, Florida, the Bentonville-based company also raised the age limit to purchase firearms from 18 to 21, according to the Washington Post

McMillon is also turning his attention to the federal government, calling on Congress and the White House to implement “common sense measures,” including stricter background checks. In his letter to employees, McMillon writes, “As we’ve seen before, these horrific events occur and then the spotlight fades. We should not allow that to happen. Congress and the administration should act.” 

Implication for boards: Walmart’s response to gun violence marks the latest example of corporate and CEO activism on social issues, a trend likely to continue in the coming years. As business executives face increasing stakeholder pressure to take a stand on social and political issues, boards will play an important role in guiding their company’s response, including whether no response is the right course of action. Directors should determine what circumstances will necessitate board involvement in, or approval of, policy stances. Additionally, directors can push their management teams to be proactive, and ensure they are paying close attention to broader trends in investors’ and other stakeholders’ views on potentially sensitive or divisive social issues. Boards and management teams should also be prepared to articulate how key positions are likely to affect business performance in the short and long term. 

Key Questions Directors Should Ask: 

NACD Related Resources: Read “Changing Times Call for a Changed Board”, an article from NACD Directorship, for insights on the board’s role in governing emerging issues, ranging from gender pay equity to social media. NACD’s Sustainability and Social Responsibility Resource Center catalogs research and thought leadership to enhance oversight of environmental, social, and governance-related concerns.