Deaths and costs from the burgeoning opioid epidemic continue to spiral upward. Investors, including state treasurers in states grappling with related budget impacts, are using a corporate governance lens to call for more transparency and accountability from companies connected to the crisis. The clear business risks apparent in lawsuits, legislation and reputational damage meant the resolutions earned high levels of support in 2018, with a majority vote of 62.3 perent at leading opioid maker Depomed (now Assertio Therapeutics) and another majority vote of 61.4 percent at drug store chain Rite Aid in October.

This year, proponents filed three resolutions that directly address the issue. Mercy Investments has withdrawn a resubmitted proposal to AmerisourceBergen that earned 41.2 precent in 2018. The company has agreed to provide the requested report. The resolution asked for information

on the governance measures ABC has implemented since 2012 to more effectively monitor and manage financial and reputational risks related to the opioid crisis in the United States (U.S.), given ABC’s distribution of opioid medications, including whether ABC has assigned responsibility for such monitoring to the Board or one or Board committee(s), revised senior executive compensation metrics or policies, adopted or changed mechanisms for obtaining input from stakeholders, or altered policies or processes regarding company political activities.

A similar proposal at Insys Therapeutics is pending, asking if it “has assigned responsibility for [monitoring opioid risks] to the Board or one or more Board committees, revised senior executive compensation metrics or policies, adopted or changed mechanisms for obtaining input from stakeholders, or altered policies or processes regarding company lobbying activities.”

In January, investors at Walgreens Boots Alliance, which merged with Rite Aid in 2018, gave 60.5 percent to a proposal that asked about

corporate governance changes Walgreens has implemented since 2012 to more effectively monitor and manage financial and reputational risks related to the opioid crisis, including whether and how the Board oversees Walgreens’ opioid-related programs and AmerisourceBergen’s opioid-related risks, whether the crisis has been designated (or is encompassed within) a material corporate social responsibility (CSR) issue and whether and how Walgreens has changed senior executive incentive compensation arrangements.

Walgreens is one of the biggest U.S. purveyors of prescription medication and it also owns 26 percent of AmerisourceBergen, one of the country’s largest drug distributors.

SEC action—The SEC staff had rejected Walgreens’ contention that the proposal relates to ordinary business.

(See p. 74 for two additional resolutions about legal costs connected to opioid litigation and executive pay.)