Johnson & Johnson is committed to legal compliance and upholding the highest ethical standards in every aspect of our business and in every market where we operate. By conducting business with integrity, we sustain the trust of our patients, health care providers, customers, partners and the communities we serve; and reinforce shareholder and investor confidence in the long-term health of our business. Above all, as a Company guided by Our Credo values, we believe acting ethically and responsibly is the right thing to do.
The Johnson & Johnson Family of Companies has the privilege of doing business in many countries and regions around the world. In every single location, employees at every level have the responsibility to know and follow all laws and regulations that apply to our business.
Our Company has comprehensive policies, procedures and required training that help employees comply with laws and regulations. The Johnson & Johnson Law, Health Care Compliance & Privacy (HCC&P), Quality & Compliance, Environment, Health, Safety & Sustainability (EHS&S), Human Resources and Finance departments are available to help all employees navigate the laws and regulations that impact our work. GRI 102-17
Additional details concerning policies and procedures that define what we expect of our people and our business partners throughout the world can be found in our Policies and Statements. GRI 102-16
Our Code of Business Conduct requires that all employees comply with all laws and regulations governing our Company’s behavior.
When this is not the case, information is reported internally within the organization to senior management and, as appropriate, also shared with the Johnson & Johnson Executive Committee, the Board of Directors, relevant Committees of the Board and/or the external auditors. When public disclosure criteria are met, anticompetitive behavior, antitrust claims, product liability claims, and lawsuits that cover customer health and safety, labeling or marketing, as well as corrective actions and resulting fines and penalties, are outlined in our 10-Q and 10-K filings. See Note 21 on page 73 of our 2016 Annual Report. GRI 205-3, 206-1, 416-2, 417-2, 417-3, 419-1
The Law Department and HCC&P are responsible for setting enterprise-wide standards with respect to anti-corruption laws and interactions with health care professionals.
The Finance organization is responsible for assuring appropriate accounting controls are in place at all levels of the organization to ensure accuracy over financial reporting, including the investigation of potential fraudulent financial activity or results. The Finance organization is also responsible for evaluating, testing and monitoring accounting control systems on an ongoing basis to be reasonably assured that the controls in place continue to be appropriate and function properly. Part of this evaluation includes documenting all the steps taken to evaluate and monitor controls, as well as documenting existing accounting and internal control systems and procedures.
Internal Audit conducted 209 financial control audits at operating companies in 2016. In addition, Internal Audit and HCC&P conducted 66 and 35 audits, respectively, for compliance with our Foreign Corrupt Practices Act and Health Care Compliance controls. Generally, all operating companies are audited on either a three- or five-year cycle, depending on the risk profile of the particular operating company. In addition, HCC&P conducts additional monitoring and testing operations at our operating companies for compliance with our health care policies on a regular basis. The scope and frequency of such monitoring is determined based on the local operating company requirements and local conditions. GRI 205-1
Our policies require anti-corruption training for employees with relevant job responsibilities, with a significant emphasis placed on ensuring completion of training by all applicable employees. The training covers all aspects of the Health Care Business Integrity Guide, including charitable contributions, donations, third-party intermediary (e.g., distributors) and cross-border interactions, all of which are deemed as high-risk activities. In 2016, Johnson & Johnson operating companies met the training goal (as captured in our metrics management tool), with training completed by more than 88,000 applicable employees worldwide. GRI 205-2
Adherence to anti-corruption laws and interactions with health care professionals are verified through ongoing independent audits and operations testing conducted by Internal Audit and HCC&P. Information on these audits and reviews is part of regular updates to the Regulatory, Compliance & Government Affairs Committee of the Board of Directors. Where process reviews identify questionable activities, these issues are escalated to an internal Triage Committee, which determines appropriate action to take, including commencement of for-cause investigations.
Many incidents and allegations are subject to confidentiality, legal, privacy or other similar restrictions and, therefore, are not publicly disclosed. However, this information is reported externally in our public filings if it meets the criteria for requiring public disclosure. GRI 205-3
Johnson & Johnson markets a broad range of health care products from our Consumer, Pharmaceutical and Medical Devices business segments throughout the world. We do not sell or market products that are banned within markets that have restrictions such as those referenced above. GRI 102-2
Products developed and commercialized through our Pharmaceutical and Medical Devices businesses meet all applicable laws regarding package inserts, which contain appropriate information for health care professionals and patients. For over-the-counter pharmaceutical products, packaging and inserts are likewise used to communicate with consumers. Our Consumer products include clear, easy-to-read instructions and information on how to use our products appropriately. GRI 417-1 Ingredients are listed for all products; however, we do not include sourcing information of components. Directions for proper disposal are included where necessary.
The Company is committed to marketing all products responsibly to honor the trust that consumers place in us in choosing our products and to ensure efficient markets. Lawsuits, claims regarding commercial and other matters, governmental investigations, and other legal proceedings arise from time to time in the ordinary course of business. Legal proceedings that involve Johnson & Johnson and its subsidiaries and meet criteria for requiring public disclosure are reported externally in our public filings, available on our Investor Relations website. GRI 206-1
In 2016, Johnson & Johnson relaunched its global, company-wide Bioethics Committee to further enhance the expertise and capabilities available to aid in bioethical decision making. The committee provides an expert forum for consultation on bioethical issues and proactively championing bioethical decision-making across the enterprise.
Humane Care and Use of Animals
In addition, at Johnson & Johnson it is our policy is to minimize the use of animals in laboratory research when assessing the safety and efficacy of our products. Over time, the use of animals in our research has decreased significantly. In 2016, Johnson & Johnson as a global enterprise—across our Consumer, Pharmaceutical and Medical Devices business segments—discontinued the use of live animals for the sole purpose of sales training.
For more information see Our Guideline on the Humane Care and Use of Animals.
Our operating model takes advantage of the local knowledge of our EHS&S professionals in the markets where we operate, while continuing to leverage technical expertise across the enterprise, develop strategy, oversee talent management and execute governance. For more information on our management approach, see EHS&S Governance.
The EHS&S categories of non-compliance were expanded in 2014 to include non-compliances associated with areas such as fire codes, food service, elevators and boilers. The areas being managed and reported as part of our compliance program now reflect a more inclusive and holistic view of our operations, going beyond the traditionally reported areas of EHS&S compliance. Our aim is to achieve zero accidental releases, regulatory non-compliances and fines.
In 2016, we experienced 17 accidental releases and 144 environmental non-compliances. None of the accidental releases were considered to be significant, as defined by the Global Reporting Initiative disclosure 306-3. A total of 182 health and safety non-compliances were also recorded. The increase in EHS&S non-compliances over the past year were due in part to an increase in wastewater non-compliances, which tend to fluctuate because of operational activities, and an increase in product stewardship non-compliances, most of which were associated with our increased governance of this program and were self-reported. Over 60 percent of the EHS&S non-compliances occurred in the newly added categories. No fines were paid for EHS&S violations in 2016. GRI 306-3; 307-1
1 Includes data from all manufacturing, R&D, warehouse, distribution center and office buildings locations. Tracking of non-compliance expanded in 2014 to include several new categories not captured in previous reporting (fire code, food service, elevators, and health clinics).