The Business Roundtable (made up of prominent CEO’s) had recently issued a new “Statement on the Purpose of a Corporation.” The statement was well publicized since for the first time in decades the Roundtable broadened its mission statements to not only serve shareholders exclusively but acknowledged the need to serve other stakeholders in business including society as a whole. The statement specifically mentioned “delivering value to customers,” “investing in employees,” dealing fairly and ethically with suppliers,” and “supporting the communities in which we work,” as well as “generating long-term value for shareholders.”
Alex Gorsky, CEO of Johnson & Johnson (J&J) and a board member of the Roundtable organization was pictured on the Fortune cover and quoted in the article as saying, “people are asking fundamental questions about how well capitalism is serving society.”
I find it ironic, and somewhat hypocritical, that at about the same time that the Roundtable and Gorsky were doing their thing, “a judge in Oklahoma ordered J&J to pay $572.1 million to the state for its part in fueling an opioid epidemic by deceptively marketing addictive painkillers…” After a seven-week trial, the OK Judge said that J&J’s marketing and promotion of painkillers created a public nuisance and created an “imminent danger and menace…”
So I ask, how well is J&J doing in serving society?
Of course, J&J said it would appeal the ruling and flatly denied that it had caused the opioid crisis, even though in 2015 J&J was the leading supplier of raw ingredients for painkillers and there have been 400,000 painkiller overdose deaths from 1999 to 2017.
The J&J position sounds familiar to the “Big Tobacco” initial denial that it had any responsibility for the deaths of millions as a result of an addiction to nicotine, a known carcinogen. And don’t get me started on e-cigarettes… subject of another blog.
Big business, specifically in this case, J&J, cannot have it both ways. The court records clearly showed that J&J drove hard to increase the sales of pain killers with little regard for societal consequences.
It is time for all businesses to think long and hard about the impact (individual and societal) of their products, processes, and services, and to do what the Roundtable has stated – truly look out for the interests of society as a whole. Our community. You and me. Businesses cannot drive only for revenue and profit objectives, denying responsibility for damages, death, and destruction.
In my opinion, a more meaningful Business Roundtable statement would have included the need for ethical conduct and responsibility as it relates to all stakeholders, emphasis of more thoughtful weighing of consequences of new products, processes, and services, and the willing acceptance of responsibility for mistakes.
The Business Roundtable has taken a step in the right direction but needs to go much further if it is to be taken seriously as a group that is committed to ethical conduct.
Remember… actions speak louder than words.
