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Wal-Mart's sister act

July 23, 2006

BEDEVILED BY CRITICS OF ITS labor practices and by sluggish sales, Wal-Mart announced last week that it has hired Harriet Hentges, a former executive director of the League of Women Voters and vice president of the United States Institute for Peace, to reach out to its enemies. But Hentges, who once worked as a mediator in Bosnia, isn't your average conflict-resolving do-gooder. She's also a former nun.

Wal-Mart is downplaying Hentges' religious past, but it's hard to imagine that her 14 years as a member of the Sisters of St. Joseph of Carondelet had nothing to do with her hiring. Like errant schoolchildren, boards of directors find few apparitions more terrifying than an angry nun. That's because nuns and other clergy have led much of the socially conscious shareholder activism of the last 30 years.

Sister Patricia Daly made headlines in 1998 when she questioned then-Chief Executive Officer Jack Welch on General Electric's environmental practices, goading him until he lost his cool. She's still a fixture at shareholder meetings. Institutional Shareholder Services reports that this year, religious investors were primary filers of 25% of social-issue related shareholder resolutions (including three of the nine resolutions filed against Wal-Mart), and they're involved in many more as co-filers. People of the cloth have special moral authority, shareholder advocates say, and can often command respect and attention from executives that others rarely receive.

In some ways, hiring a former nun is a ludicrously blatant public relations move. Wal-Mart, which has already been mocked for setting up seminars to "help" local businesses near its superstores, is now tapping into the nun network to gain credibility with the socially conscious set.

But siccing the sisters with one of their own is also brilliant. Perhaps now when a nun makes much of Wal-Mart executives' compensation, Hentges will be able to draw from her own store of moral authority and remind the critic that Wal-Mart is taking measures to improve health insurance for its employees. When a reverend complains about sweatshops, she'll be able to counter, credibly, with testimony of new "green" truck fleets. It's the same approach Nike took when it hired former U.N. ambassador and civil rights leader Andrew Young to report on conditions in its operations in Vietnam. (Young, incidentally, now works for Wal-Mart.)

Maybe some good can even come of it. To that, at least, we say: Amen.

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