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Articles

Not a good week for Johnson & Johnson, a company long considered by many to be a good example of corporate social responsibility. Earlier this week, the company expanded their recall of Tylenol and other products, but only after an FDA investigation revealed numerous problems that one of the company’s facilities. Now, the company is accused of paying kickbacks to nursing homes, in order to boost the use of a schizophrenia drug. Read the article here.

Excerpt:
TRENTON, N.J. — Federal prosecutors said Friday that health care giant Johnson & Johnson paid tens of millions of dollars in kickbacks so nursing homes would put more patients on its blockbuster schizophrenia medicine and other drugs.

In a complaint filed Friday, prosecutors said J&J paid rebates and other forms of kickbacks to Omnicare Inc., the country’s biggest dispenser of prescription drugs in nursing homes. Prosecutors allege Omnicare pharmacists then recommended that nursing home patients with signs of Alzheimer’s disease be put on the powerful schizophrenia drug Risperdal, which was later found to increase risk of death in the elderly.

The allegations are in a complaint filed by the U.S. Attorney in Boston, whose office has joined two whistle-blower cases. One was filed in 2003 by a former Omnicare pharmacist in Chicago, Bernard Lisitza, who alleges he was fired after he challenged the Risperdal kickbacks and other improper practices at the company. The other was filed by former Omnicare financial analyst David Kammerer in 2005, after he resigned from the company.

Read more… The New York Times also has an article here.

Johnson & Johnson has long been lauded as a champion of corporate social responsibility. Their handing of the 1982 Tylenol recall has been used as a case study for the proper management of a company in crisis. (Just google “Johnson & Johnson Tylenol case study” – a good example of which is located here.) This time, the company appears to have handled the situation differently. Read the article here.

Excerpt:
In a moment of startling corporate clarity, Johnson & Johnson recalled all its Tylenol from US store shelves in 1982 after capsules tampered with in Chicago were linked to six fatalities.

The move cost the company $100 million and threatened to decimate its leading share of the market. Instead, consumers applauded the company’s openness and sales rebounded within a year. Three decades later, the move is still regarded as a shining example of corporate social responsibility.

The time it took the company’s CEO to make that gutsy call? Six days.

On Friday, a unit of Johnson & Johnson expanded a recall of Tylenol products to other over-the-counter medicines, including Benadryl, Motrin, and Rolaids, because of reports of nausea and other symptoms. The time from those initial reports to Friday’s action? Twenty months – and only after the Food and Drug Administration (FDA) had finished an investigation that found multiple problems at the Johnson & Johnson factory.

Read more…

Fortune magazine named Apple the most admired company in the United States in 2008 and in the world in 2009. This certainly doesn’t sound admirable. Read the article here.

Excerpt:
In a repeat scenario from last January, Apple Inc. is contesting two petitions from shareholder groups to increase the company’s environmental efforts, according to Apple’s proxy statement, reports EE Times. Two of the proposals call on Apple to establish a board-level sustainability committee, and to report how the consumer electronics company will reduce greenhouse gas emissions and address other environmental and social issues such as toxics, recycling and employee and product safety, according to the article.

In January last year, Apple opposed a shareholder resolution that would require the company to publish a corporate social responsibility (CSR) report, despite unveiling a number of new green products.

Apple’s board is rejecting both petitions this year, stating the company has taken appropriate steps to protect the environment including posting information at its Web site since August about its carbon footprint and recently released products, reports EE Times.

Read more…

Photo by adria.richards
Hey, Google. It’s about time. Read the article here.

Excerpt:
Google launched its Chinese-language search engine, Google.cn, in January 2006. The company said at the time that it did so in the belief that a search engine would help open access to information for Chinese residents. To obtain permission to operate in China, however, the company had agreed to censor search results that the Chinese government deemed objectionable. Google was harshly criticized by civil liberties groups for its concession to Chinese authorities.

The company now appears to be regretting that decision.

“We have taken the unusual step of sharing information about these attacks with a broad audience not just because of the security and human rights implications of what we have unearthed, but also because this information goes to the heart of a much bigger global debate about freedom of speech,” Drummond wrote Tuesday about the company’s reversal of its position in China. “The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences.”

Read more…

A trip down memory lane. Listen to the story or read the transcript here.

Excerpt:
The business world has been rocked by one scandal after another in the past decade. From Bernie Ebbers to Bernie Madoff, it’s been a confusing and angry time for investors.

In particular, the past 18 months have resembled a horror movie, with flaws exposed at Bear Sterns, Lehman Brothers, Washington Mutual, Fannie Mae, Freddie Mac and AIG. All of that was accompanied by a 777-point one-day plunge in the Dow (plus plenty of dismal trading days that followed) and more than 7 million job losses.

Read more…

Links to the studies are included in the article.  Read the article here.

Excerpt:
Why does it seem that it’s always Christmas in corporate boardrooms? And how can investors tell whether those glittering pay packages are worth the cost?

The answer sounds obvious: Pay the boss more for good results now, and you should get even better results later. But the evidence for that is surprisingly weak, and two new studies even suggest that when chief executive officers get paid more, shareholders end up earning less.

Read more…

From a great blog that covers ethical issues in the biotechnology industry.  Read the blog article here.

Excerpt:
Monsanto is widely considered to be Public Enemy #1 by critics of the biotech industry. But most who’ve heard complaints about Monsanto don’t know much more than what’s contained in the single-sentence slogans.

But if you’re going to form an opinion, it’s good to know a little more. As a start, here’s a good story by Christopher Leonard, writing for the Associated Press (and coming to you via The Atlanta Journal-Constitution), Monsanto seed biz role revealed. I strongly recommend the whole article. But here’s a taste:

“Confidential contracts detailing Monsanto Co.’s business practices reveal how the world’s biggest seed developer is squeezing competitors, controlling smaller seed companies and protecting its dominance over the multibillion-dollar market for genetically altered crops, an Associated Press investigation has found.

With Monsanto’s patented genes being inserted into roughly 95 percent of all soybeans and 80 percent of all corn grown in the U.S., the company also is using its wide reach to control the ability of new biotech firms to get wide distribution for their products, according to a review of several Monsanto licensing agreements and dozens of interviews with seed industry participants, agriculture and legal experts….”

Read more…

Read the article here.
Excerpt:

You might think that board members overseeing businesses that cratered in the credit crisis would be disqualified from serving as directors at other public companies.

You would, however, be wrong.

Directors who were supposedly minding the store as disaster struck at companies like Countrywide Financial, Washington Mutual or Fannie Mae have not all been banished from other boardrooms. In many cases, directors just seem to skate away from company woes that occurred on their watch.

To some investors, this is an example of the refusal of those involved in the debacle to accept responsibility for it. Whether you are talking about top executives loading up on leverage, regulators who slept while companies took on titanic risks or mortgage lenders that made thousands of dubious loans, few in this crowd have acknowledged culpability. Taxpayers and shareholders, meanwhile, who had nothing to do with the problems, are left holding the bag.

Read more…

Interesting article, but more data might be needed before a conclusion can be drawn. Read the article here.
Excerpt:

From a carbon emissions point-of-view, is it better to buy products online or in a store? You probably guessed the former. And if so, you’re right, according to a study conducted by MindClick GSM, a sustainability consulting firm and released today by GigaOM Pro, a subscription based research and analysis service covering green IT (among other topics).
[...]
The researchers took these numbers and ran with them, calculating that the negative environmental impact of an in-store purchase made on Black Friday is 50 times that of an online purchase made on Cyber Monday. And in more general terms, it found that carbon emissions related to purchasing an item inside a store represents an increase of more than 15 times that of an online purchase.

Read more…

Read the article here.
Excerpt:

What critics do do – in both good economic times and bad – is offer the usual bromide that the minimum wage is a “job-killer.” In reality, though, the most careful studies of state and federal minimum wage increases have found little evidence of job loss. For example, states that raised their minimum wages higher than the federal level between 1997 and 2007 (when the federal minimum wage was stuck at $5.15 an hour) enjoyed lower unemployment rates than states that did not. When Congress finally raised the minimum wage in 2007, the move was endorsed by more than 650 economists, including five Nobel laureates and six past presidents of the American Economics Association, who argued that the increase would significantly improve the lives of low-wage workers “without the adverse effects critics have claimed.”

Read more…

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