Board Oversight - Risks Related to the Opioid Crisis

Resolution Text

RESOLVED, that shareholders of Johnson & Johnson (“JNJ”) urge the Board of Directors (the “Board”) to report to shareholders describing the governance measures JNJ has implemented since 2012 to more effectively monitor and manage financial and reputational risks related to the opioid crisis, given JNJ’s sale of opioid medications, including whether increased centralization of JNJ’s corporate functions provides stronger oversight of such risks and any changes in how the Board oversees opioid-related matters, how incentive compensation for senior executives is determined, and how the Board obtains input regarding opioids from stakeholders.

The report should be prepared at reasonable cost and should omit confidential and proprietary information.

Supporting Statement: 

Opioid abuse is undeniably a public health crisis. The Centers for Disease Control and Prevention reported that in 2017, opioid abuse caused an average of over 130 overdose deaths per day. The economic and social effects of the opioid crisis have been profound. A recent report pegged the cumulative economic toll of the opioid epidemic at over $1 trillion.1 Opioid use and dependency, according to a 2017 study, is a key factor in the decline in prime-age male labor force participation.2

Sale of opioid medications creates legal and reputational risks for JNJ. JNJ recently received a grand jury subpoena from a New York U.S. Attorney’s Office related to the sale of opioids made by subsidiary Janssen.3 In August 2019, an Oklahoma judge ruled that Janssen engaged in “false, deceptive and misleading” marketing regarding opioids that contributed to the opioid crisis in Oklahoma, which constituted a “public nuisance,” and awarded the state of Oklahoma $572 million.4 JNJ has offered to pay $4 billion to settle over 2,000 lawsuits by state and local governments claiming that JNJ’s marketing of opioid drugs, as well as its sale of opioid active ingredients to other drug makers, contributed to the opioid crisis.5

In our view, Board-level oversight and governance reforms can play an important role in effectively addressing opioid-related risks and shareholders would benefit from a fuller understanding of how JNJ’s governance arrangements have changed since 2012 to do so more effectively. 

For example, reports indicate that JNJ has begun centralizing its famously decentralized corporate structure, including the compliance function,6 which could be expected to affect Board oversight of risks related to opioids. As well, it is not clear from JNJ’s proxy statements whether senior executive compensation incentives have changed to promote compliance or ethical behavior.

We urge shareholders to vote for this proposal.


4 See

Lead Filer

Michael Frerichs
Illinois State Treasurer


Patricia Daly
Sisters of St. Dominic of Caldwell, NJ
Laura Krausa
Catholic Health Initiatives
Judy Byron
Sisters of Providence, Mother Joseph Province
Donna Meyer
Mercy Investment Services
Donna Meyer
Dignity Health