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A slide in Wal-Mart's stock price is only the first of the after-shocks of the New York Times' April 21 expose of the company's suppression of details about bribes paid by Wal-Mart de Mexico to "win market dominance." The Associated Press reported late on April 23 that shares of Wal-Mart Stores declined nearly 5%, but the real story is the decision, as reported by the Times, by Wal-Mart to shut down an investigation that was turning up embarrassing results.
According to the Times report, in 2005 Wal-Mart's top executives were notified that subsidiary Wal-Mart de Mexico had paid bribes to obtain permits "in virtually every corner" of Mexico. Top execs opened an investigation and quickly learned that the bribes totaled more than $24 million, and that local execs had tried to conceal the bribes from corporate headquarters in Arkansas. As part of an effort to bury this news, the Times said, Wal-Mart then assigned primary responsibility for the investigation to the subsidiary in Mexico, which exonerated itself.
And now the burying of the story is the story. Note to all corporate communications teams: When the news is bad, embrace it and own it—and sell that ownership to senior leaders. In the digital era, the bad news is not going away, no matter how big the broom.
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