On opioids, shareholders spoke, companies begin to listen

Since 2017, SGI has participated in Investors for Opioid Accountability (IOA). This week, the IOA released a two-year progress report detailing landmark agreements with 20 opioid manufacturers, distributors and retail pharmacies implicated in the crisis. 

Between headlines about Democratic debates and Washington feuds, news about lawsuits and proposed settlements have drawn some attention this week. Steadily and purposefully, the IOA has dug down into the crisis and sought ways to address it as shareholders. Specifically, the IOA has engaged opioid manufacturers, distributors, retail pharmacies, and manufacturers of drug treatments.

A few important things to note from the report:

  • A majority (52%) of shareholder proposals led to agreements with the companies;
  • Of the shareholder resolutions filed, seven resolutions at Rite Aid, Walgreens, Mallinckrodt, Mylan, and Assertio Therapeutics received majority votes and an additional two resolutions received majority support at AmerisourceBergen from independent voters, leading to reforms;
  • Twelve companies agreed to conduct risk assessments of opioid-related business practices including governance, compliance, compensation and political lobbying and to report these findings publicly. Two of these companies (Cardinal Health and Assertio) established special board-level committees on opioids;
  • Ten companies agreed to adopt misconduct clawback policies  to recoup executive pay, including the public disclosure of the use of the clawback;
  • Three companies agreed to separate their chair and CEO positions (McKesson, Cardinal Health and AmerisourceBergen), and;
  • Two companies agreed to disclose when they adjusted metrics to exclude legal costs when calculating their executive pay awards. 

Established out of heightened concern that opioid company risks both threaten long-term shareholder value and have profound long-term implications for our economy and society, the IOA uniquely represents influential and diverse funds from across the investing universe including faith-based, sustainability, public, and labor funds as well as comptrollers, treasurers and asset managers that are taking swift and decisive actions to hold manufacturers, distributors, and retail pharmacies’ boards accountable for their role in the opioid crisis. The IOA consists of 54 investors with over $4 trillion in assets under management and is co-led by Mercy Investment Services, Inc. and the UAW Retiree Medical Benefits Trust.

If you wonder what difference shareholders can make, this report spells out in particular detail how attentive and deliberate engagement can achieve results. We are proud of our participation in the IOA. We’d urge our members to examine this report. As you do, keep in heart and mind those who have died in this opioid epidemic, those who struggle with addiction today, families devastated by losses, and communities overwhelmed with the human and material cost of this crisis. If you hold shares in companies outlined in the report, we’d welcome the opportunity to facilitate your support of these engagements. Please, contact our staff for more information.

Additional posts concerning the opioid epidemic and SGI’s efforts are found here:

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