JOHNSON & JOHNSON | Board of directors accountability and transparency at JOHNSON & JOHNSON

Status
Omitted
AGM date
Previous AGM date
Resolution details
Company ticker
JNJ
Lead filer
National Center for Public Policy
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request the Board of Directors to adopt a policy, and amend the bylaws as
necessary, requiring Company directors to disclose their expected allocation of hours among all
formal commitments set forth in the director's official bio. Allocation may be on a weekly,
monthly, or annual basis. This policy would be phased in for the next election of directors in
2025.
Supporting statement
SUPPORTING STATEMENT: Overboarding is an issue specifically addressed by proxy advisors Independent Shareholder
Services and Glass Lewis, as well as asset managers BlackRock, Vanguard, and State Street,
with none of them recommending more than 6 board commitments per director.' In addition, the
oversight duties of directors continue to require significant attention, with a McKinsey interview
asserting that even as far back as 2014, "if a potential director can't put in 300 to 350 hours a
year, she shouldn't take the job."
2 Meanwhile, potential liability for failures of oversight are
significant, with relevant litigation from a few years ago related to Boeing including "US$20
billion in non-litigation costs and more than US$2.5 billion in litigation costs."
3
Meanwhile, a review of Johnson & Johnson's director bios reveals multiple cases of formal
commitments exceeding six, with some apparently as high as 17.
4 While it is certainly true that
not all, or even most, of these competing commitments involve service as a director on other
corporate boards (though many do), the commitments must nonetheless be assumed to be
material or else their inclusion in the bios would be potentially misleading.
The excerpt below from a related article provides an example of the type of material information
this proposal seeks to reveal. It involves the case of an individual sitting on 4 boards in addition
to serving as a CEO. Based on various reasonable assumptions, such an individual:
should apparently be working 90.5 hours per week or 13 hours per
day Monday thru Sunday. But should shareholders really have to
perform back-of-the-envelope calculations ... to determine whether
their directors are reasonably likely to be devoting appropriate time
to a job that is supposedly at the heart of a corporation's governance
and for which the director is being well-compensated (it has been
reported that the average 2022 compensation for an S&P 500
director was $316,091)2°

By adopting this proposal, the Company can provide material information that shareholders
should not have to worry about. Specifically, the Company can allow shareholders to make fully
informed decisions regarding the ability of the Company's directors to devote sufficient time to
their important duties.

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