Anne M. Mulcahy, Lead Director of the Johnson & Johnson Board of Directors, plays a pivotal role in ensuring our Board is deeply engaged with our ESG strategy and progress. Anne shares some insights below in response to questions that reflect current interests of key stakeholders.
How have changes in Johnson & Johnson’s business environment in 2022 affected the nature of the Board’s oversight responsibilities?
As a Board at the helm of a very dynamic organization, we are constantly evaluating how a changing world is affecting the Company’s business and how we as a Board must respond to both current and emerging challenges, and also to opportunities. This was particularly true in 2022, as the Company navigated social unrest and conflict in many parts of the world, supply chain issues, increased inflation and interest rates, extreme weather events and more … all while preparing for a successful separation of the Consumer Health business segment.
Johnson & Johnson has long thrived in a changing environment; the Company has been doing so for more than 135 years. As the independent Lead Director for the Johnson & Johnson Board of Directors, I work closely with our Chairman of the Board and Chief Executive Officer as he focuses on the Company’s trajectory of long-term growth. Our current Board structure—an Independent Lead Director and five standing Committees comprised entirely of independent Directors—provides robust leadership and oversight. But the Board’s oversight and, at times, the responsibilities for our standing Committees must evolve to meet our fiduciary obligations and the changing needs of the Company. For example, in 2021, the Board formed a Special Committee to oversee the separation of the Consumer Health business, and this Special Committee remained active through 2022.
How has Johnson & Johnson embedded ESG into its business operations?
Johnson & Johnson has a longstanding commitment to creating long-term value for all stakeholders both to mitigate risk and to explore and develop new business opportunities. These responsibilities are outlined in the Company’s Credo, a set of business principles that have guided the Company for 80 years. The Board’s understanding of—and perspective on—environmental, social and governance matters and their relevance to value creation has evolved significantly over the past several years, and we have taken many opportunities to engage with the business to help guide ESG considerations in decision making across many aspects of the Company’s activities. For example, we supported the formalization of Johnson & Johnson’s ESG strategy in 2022 and monitored progress on the ESG strategy-aligned Health for Humanity 2025 Goals. This plays out in the integration of global health equity—a core ESG key focus area—in different business processes. For example, Janssen, the Company’s pharmaceutical business, actively addresses health inequities by improving diverse recruitment for clinical trials and supporting the next generation of underrepresented diverse physicians. Advancing environmental health is another ESG priority, and J&J MedTech, is advancing circularity by partnering with hospitals in Europe to recycle metal and plastic components from single-use surgical instruments. The program is currently active in eight countries. We’re very excited about these projects, and more like them are underway.
We have taken many opportunities to engage with the business to help guide ESG considerations in decision making across many aspects of the Company’s activities.
With increasing regulation expected in ESG matters in the U.S. and other countries around the world, will the role of the Board become more about compliance than opportunity?
As a highly regulated business, Johnson & Johnson relies on a robust compliance organization, led by our Chief Technical Operations & Risk Officer and Executive Committee member, and overseen by the Board. This type of oversight is not a new responsibility for our Board, and we view compliance and business opportunity as closely linked—not in tension—when it comes to our strategy. Ethical and compliant conduct is the basis for a successful business and can be an enabler of opportunity by addressing ESG matters in a strategic and holistic way.
Our Board at Johnson & Johnson realized this connection long ago, and we have significantly integrated ESG matters in our Board agenda. For example, in 2021, I joined the Board Committee Chairs overseeing risk and sustainability topics in engaging in the Company’s most recent ESG Priority Topics Assessment, the results of which have informed the Company’s reporting and disclosure and will play a significant role in Johnson & Johnson’s next set of public goals.
In 2022, the Board decided to realign Committee responsibilities and enhanced and expanded the scope of the Regulatory Compliance & Sustainability Committee. This action better positions the Board to oversee certain ESG matters alongside other compliance matters.
What do you believe to be the greatest opportunity that Johnson & Johnson has to create long-term value for all stakeholders?
Financial results will always be an important measure of performance, but Johnson & Johnson will continue its sustainable long-term growth through operating with a focus on the future and by refusing to compromise on Our Credo values. It is a core responsibility of the Board to capitalize on the Company’s position of strength as a leader in healthcare by guiding Johnson & Johnson to address the pressing concerns of today while preparing to meet the challenges of tomorrow. Investments in R&D, data science, and digital innovation are central to advancing the Company’s ESG strategy, and these investments are reflected in the strategies of Johnson & Johnson’s business segments and Enterprise functions. These emerging fields will drive value creation throughout the Company.
I’m very excited for the future at Johnson & Johnson, especially with its focus on innovation, which enables the Company to pursue both its purpose and performance with equal commitment. Transformational innovation, science and technology are fundamental to the Company’s strong financial performance, and it is this powerful financial performance that enables Johnson & Johnson to sustain and exceed its investment in lifesaving and life-enhancing innovations, benefiting millions of patients and consumers each year.