'Business is about more than making money'.

• Author: Kristie, James
• Position: LEADERSHIP - Cover story

Costco Wholesale's Jim Sinegal helped grow a dynamo of a company, one firmly grounded not on meeting Wall Street metrics and activist investor demands but in a culture of taking care of its people, its customers and suppliers, and its communities.

If you were told of a public company whose founder grew the stock price by 5,000% from the time of the company's IPO in 1985 until his retirement in December 2012, you might naturally assume that this was a CEO singularly focused on shareholder value creation. You would be wrong.

Yes, Jim Sinegal has certainly done well by the shareholders of Costco Wholesale Corp., the warehouse-style retailer that he co-founded in 1983. From one warehouse in Seattle, Costco has grown into a Fortune 20 company with 474 (and counting) retail centers in the U.S. and another 200 dotting the globe, including operations in Canada, Mexico, the U.K., Japan, Korea and other countries. (The company also operates e-commerce websites both in the U.S. and internationally.) Here, in Jim's own words, are the bottom-line results of what the company has achieved: "Since we went public in 1985, our sales have grown to $110 billion. Our revenues have increased at a 13.3% compounded rate, our profitability at a 13.6% compounded rate, and our stock value at a 16.6% compounded rate over that time."

But that success is, in Jim's eyes, the outcome of doing other things right. Costco's stellar performance has come not from a sole focus on creating shareholder wealth but as a byproduct of a laser-like attention to creating satisfied customers and taking great care of its employees and suppliers. For anyone worried about the short-term orientation of today's corporate leadership and capital markets--and there are plenty of participants both inside and outside of the boardroom who are--then Jim Sinegal is the kind of executive who is rightfully looked to as a business leader to be emulated. One fellow corporate chieftain who sings his praises is Leo Hindery Jr. (see page 9). "I admire Jim Sinegal as a role model for everything I hope to see again in corporate America," says Hindery, who is himself a champion of ethical stewardship by America's corporate leaders.

To that very objective of highlighting an enlightened leader, Sinegal earlier this year was presented with the Common Cause 2015 John Gardner Lifetime Achievement Award. John Gardner, Secretary of Health, Education and Welfare under President Lyndon Johnson, is held in high esteem as an engineer of the "Great Society" for his role in advancing groundbreaking legislation on civil rights, education and health care. He is the founder of Common Cause, an organization whose mission includes protecting and strengthening voting rights and enforcing the highest ethical standards for elected and public officials (www. commoncause.org).

"Jim Sinegal has been and continues to be a shining example of ethical and responsible business leadership that is more important today than ever before," states Susan Rubinstein, board chair of Common Cause New York, which hosted the awards event on April 14,2015. She adds, "He has built a highly successful company that is a model corporate citizen to its employees, community and the nation as a whole."

The following is an adaptation of Sinegal's remarks on accepting the award, combined with comments he made as a panelist at a Common Cause New York briefing in October 2014 on "The Board As Responsible Citizen."

How It All Began

I was a college student at San Diego Junior College --a sophomore, 18 years old, with a job where I was up at 4 o'clock in the morning to pick up clothing off of Navy ships in the S.D. Harbor and then go to school at about 8:30. I got a call from a friend that a new company had opened up in San Diego called FedMart. They had gotten in an unusual load of mattresses and needed help in putting the mattresses away. The pay was $ 1.25 per hour. But I didn't get paid the first day or the second day. So I just kept coming back, figuring eventually they were going to pay me. And on the third day as I was carrying a sofa over my head I heard this gruff voice say, "Put that damn thing down before you break your back, or worse yet, break something in the store." And that is how I met Sol Price, the legendary retailer.

The Influence of Sol Price

I had intended at that point to go to law school. I wanted to be like Atticus Finch, the lawyer in To Kill A Mockingbird. But after working with Sol Price for several months I changed my mind. I started to study business because I wanted to be like Sol Price.

Sol was an extraordinary person. He was one of the smartest people I have ever known. He was considered one of the most creative people in the retail business in the 20th century. To give you an idea of how good Sol was, the great Sam Walton once said...