Johnson & Johnson Agrees to Beef Up Internal Oversight
Published: Jul 12, 2012
After tussling with angry shareholders for nearly two years over a raft of alleged managerial lapses, Johnson & Johnson has reached a settlement by agreeing to create a board-level committee to ensure that its numerous subsidiaries comply with FDA regulations. And the health care giant will also adopt companywide risk-management policies in hopes of catching problems before they mushroom into the sort of crises that have plagued J&J for the past few years. The settlement, which must still be approved by a federal court judge, is the result of a so-called derivative shareholder lawsuit in which a group of J&J shareholders charged that the health care giant’s board of directors breached their fiduciary duty, despite a series of red flags in the form of FDA warning letters; government subpoenas; a criminal plea to kickback charges; whistleblower lawsuits; product recalls and off-label marketing.