Opioid abuse causes more than 42,000 deaths in the U.S. each year — that's 115 people per day.
ICCR has joined Investors for Opioid Accountability (IOA), established in July 2017 out of heightened concerns that opioid company risks both threaten long-term shareholder value and have profound long-term implications for our society and economy .
IOA uniquely represents influential and diverse funds from across the investing universe that are taking swift and decisive actions, including multiple shareholder resolutions, to hold manufacturers, distributors, and retail pharmacies company boards of directors accountable for potential risks of opioid misuse. IOA consists of 46 investors with over $2.2 trillion in assets under management and is co-led by Mercy Investment Services, Inc. and the UAW Retiree Medical Benefits Trust. IOA’s diverse membership of faith-based, SRI public, and labor funds as well as comptrollers, treasurers and asset managers reflects the high level of concern investors have about board accountability and oversight of opioid companies.
IOA is calling on board of directors of opioid manufacturers, distributors and retail pharmacies to adopt or strengthen corporate governance practices to improve board independence, accountability and oversight related to opioid risks. Among the governance reforms IOA is requesting is an independent board director investigation into compliance, compensation, and board practices related to opioid risks, as well as adoption of misconduct clawback provisions, enhanced political lobbying and spending disclosures and the separation of Chair and CEO positions.
IOA members filed 35 resolutions at the following 11 companies:
Alkermes; AmerisourceBergeb (ABC); CArdinal Health (CAH); Depomed; Endo; Insys Therapeutics; Johnson & Johnson (JNJ); Mallinkrodt; McKesson; Pfizer; Walgreens.
Below are outcomes for the resolutions that went to a vote:
- ABC-62% of indep. votes for board risk report
- ABC-52% of indep. votes for clawback
- ABC-49% of indep. votes for indep. chair
- Pfizer-25% for indep. chair
- Pfizer-33% corporate lobbying disclosure
- JNJ –17.8% for stop exclusion of legal costs in executive compensation
- Depomed-62.5% for board risk report
- McKesson-39% corp. lobbying, 34% accelerated vesting, 1% GAAP, 12% withhold Audit chair
An additional 13 resolutions were settled:
- CAH-Cardinal separates chair and CEO ahead of meeting
- JNJ: Indep. chair annual review of combined roles
- ALK: Board agreed to expand corporate lobbying expenditure disclosure
- CAH: Board published risk report, misconduct clawback and separated chair & CEO
- DEPO: Board agreed to misconduct clawback
- ENDO: Board agreed to risk report, misconduct clawback and expand political spending reporting
- MCK: Board agreed to continued reporting on anti-diversion efforts
- MNK: Board agreed to misconduct clawback and expand political spending reporting, Board elected to sell opioid business
- Insys: Board agreed to misconduct clawback
What Investors are Saying:
Meredith Miller, representing the UAW Retiree Medical Benefits Trust and co-leader of the IOA, said, "The IOA is asking the independent directors of the boards of these companies to investigate how they are responding to increasing business and reputational risks related to opioids. IOA believes that good corporate governance practices that traditionally serve as risk mitigators are critical to implement going forward. Such provisions aim to increase board accountability through strengthened independent board leadership and compensation policies to deter misconduct."
Donna Meyer, representing Mercy Investment Services, and co-leader of the IOA, said, "We believe these companies have played an important role in this epidemic. Some of them push back and say that it needs to be the government that establishes the guidelines. We, of course, believe that they have the knowledge and the wherewithal to establish these guidelines."