By Brian Lavery '08, Bottom Line October 12, 2006 

When a bitter rival is on the ropes, most executives would jump at a chance to throw in a quick sucker-punch. Not Jim Sinegal. He may be the chief executive and president of Costco Wholesale, and at the moment his nemesis may be the company that America loves to hate, but he couldn't bring himself to say a bad word about Wal-Mart. "We don't like them very much," he finally admitted, eliciting appreciative laughter from the packed crowd in Uris Hall. Wal-Mart may pay its employees less - an average of $10.11 per hour to Costco's $17 - and it may try to scrimp on health benefits that Costco happily hands out to around 90 percent of its workforce. However, Sinegal doesn't think that Costco's standards should be imposed on other companies. "We don't want anyone ever to be able to say that Costco makes money off the backs of its employees," he said. "This works for us. That doesn't mean it works for everybody else." 

Sinegal was on campus to deliver the keynote address at the annual Social Enterprise Conference at Columbia Business School, and to receive the Benjamin Botwinick prize in business ethics. Professor Ray Horton, the Frank R. Lautenberg Professor of Ethics and Corporate Governance, and director of the Social Enterprise Program, presented the crystal trophy, and pointed out that Sinegal is one of those rare social entrepreneurs who can combine enlightened values and good business practices in their day job. The conference, which sold out early, was organized by students in the Social Enterprise Club and the International Development Club with support from the Social Enterprise Program and the Leadership and Ethics Board of the Sanford C. Bernstein & Co. Center. The Private Equity Club, and Energy Club were also supporters of the conference. Sinegal's speech was the highlight of a day that featured ten panel discussions by leaders in areas such as corporate governance and social responsibility, renewable energy and real estate deals that promote urban regeneration, nonprofit governance issues, and private equity in development, global health, and education. 

For those of us who remember 1980s TV, Sinegal's charm might have had something to do with his resemblance to the avuncular Quaker Oats spokesman. Or it could be his plain-talking sense of humor, which has made him the all-around good guy of corporate boardrooms. Earlier this year, TIME magazine called him the CEO "steal of the century" for his $350,000 baseline salary. (Legendary investor and Columbia Business School alumnus Warren Buffett has described executive pay as the litmus test for good corporate governance.) Sinegal's talk also emphasized Costco's accomplishments and transformations since its founding in 1983, including a focus on great value for its customers (one of its 488 warehouses recently sold a necklace for $252,000, "the same quality of jewelry that you'll find at Tiffany's"), treating employees with respect, and good relationships with suppliers-- all of which results in shareholder value. "It's a simple code of ethics," he said. He also spoke of his long-term (50-year tine horizon) perspective for Costco When asked about succession planning and whether the values and culture of Costco would continue on after his tenure, he said that assembling and retaining a strong leadership team will enable Costco to stay true to his vision of a company that benefits everyone who comes in contact with it. "Our ethos is pretty well ingrained throughout our organization," Sinegal said. "It's not just one person's thinking. This is something that we believe as a company."