“Faith-based investors have a particular concern with the opioid epidemic. Our clients are clergy members, churches and mission-oriented organizations that are more and more challenged to minister to families being torn apart by opioids. United Church Funds believes that it is important for pharmaceutical companies to examine their role in the creation and continuation of the epidemic and to revise their policies and practices to stem this horrendous tide.”
Katie McCloskey, United Church Funds
“The crisis in opioid addiction our nation is experiencing was years in the making and it will require consistent and collective action on the part of many stakeholders to resolve. We are motivated to work alongside other members of the IOA to ensure that implicated companies are doing everything within their power to control opioid misuse because we know many lives are at stake.”
Judy Byron, OP, Northwest Coalition for Responsible Investment
Corporate Governance Reforms for Opioid Companies
According to the CDC,On average, 130 Americans die every day from an opioid overdose, a crisis that is ravaging communities across the country. ICCR members, many representing faith-based organizations including health systems, have a long history of engagements with pharma and other healthcare companies on multiple concerns related to corporate responsibility. Because they believe opioid manufacturers and distributors have an important role to play in helping to stem the addiction crisis, they have joined their voices with those of other impacted funds to call for improved governance structures at these companies to help mitigate the risks of opioid abuse.
The Investors for Opioid Accountability (IOA) is a diverse coalition of global institutional investors with 54 members representing $3.5 trillion in assets under management. The IOA was established in July 2017 to engage with opioid manufacturers, distributors and retail pharmacies on opioid business risks that have implications for long-term shareholders, communities and the economy.
The IOA focuses on the following five corporate governance reforms through dialogue and shareholder resolutions:
- Independent Chair of the Board of Directors
- Board Level Responsibility for Opioid Business Risk Oversight
- Misconduct Clawback Policies including disclosure of the Use of the Clawback
- Exclusion of Legal/Compliance Costs from Compensation Metrics
- Expanded Reporting on corporate Political Expenditures
Among the IOA achievements to date are independent board chairs achieved at AmerisourceBergen, Cardinal Health and McKesson and board risk reports at Cardinal Health, Endo and McKesson. A majority of independent voters supported the board risk report shareholder resolution at Walgreens, Rite Aid and AmerisourceBergen. The IOA also achieved of misconduct clawback policies including those at Cardinal Health, Assertio, Endo and Insys. The IOA also achieved expanded disclosure on corporate lobbying and spending at Alkermes, Endo and Mallinckrodt.
For 2019, the IOA continues to engage with key companies on all five of the reforms to carry through with settlement agreements as well as votes at companies on several shareholder issues including at Mallinckrodt (board risk report, misconduct clawback disclosure and corporate political lobbying), Mylan (board risk report and misconduct clawback), Johnson and Johnson (misconduct clawback disclosure, exclusion of legal/compliance costs) and Insys (board risk report).