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The CEO's Boss: Tough Love in the Boardroom resources

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T H E S O C I A L C O N T R AC T 7 We must be mindful of ways to help our employees fulfi ll their family responsibilities. Employees must feel free to make suggestions and complaints. Th ere must be equal opportunity for employment, devel- opment and advancement for those qualifi ed. We must provide com- petent management, and their actions must be just and ethical. We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens— support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources. Our fi nal responsibility is to our stockholders. Business must make a sound profi t. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockhold- ers should realize a fair return.9 A joint commitment to a common set of instrumental values between the board and the CEO is central to a healthy partnership. Without a col- lective agreement as to the company’s values, the leadership team will not have a complete set of tools to navigate through good and bad times. In 1982, Johnson & Johnson proved just how committed it was to its Credo, and how the Credo helped shape strategic decisions, with its re- sponse to the Tylenol crisis. On September 29th of that year, a 12- year- old from Chicago died aft er taking a capsule of Extra Strength Tylenol. An- other Chicagoan died shortly thereaft er, as did his brother and sister- in- law aft ere were two more deaths in er taking pills from the same bottle. Th the area before investigators discovered the Tylenol link. Th ey believed that someone had stolen bottles of Tylenol off the shelves of various super- markets, poisoned them with solid cyanide, and then replaced the bottles. Th rmed when three doctored bottles were found in is suspicion was confi supermarkets. I have worked with a number of “Big Pharma” companies and have referenced Johnson & Johnson’s response to this incident as a clear exam- ple of a company that stuck to its credo in a crisis. Th e company warned hospitals and distributors, issued a nationwide recall of Tylenol products, and off ered to exchange all capsules already purchased by the public with

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