Walgreens Boots Alliance shareholders have instructed the company to explain how it's monitoring and managing risks related to the opioid crisis, according to preliminary results announced Friday at Walgreens' annual shareholders meeting.
The measure requires Walgreens to prepare a report by June 30 detailing any changes the company has made to its corporate governance since 2012 in response to the opioid crisis. Investors want more specifics, including how Walgreens' board oversees opioid-related programs and whether executive bonuses consider any opioid-related objectives like promoting ethical conduct.
Investors for Opioid Accountability, a coalition that includes state treasurers, comptrollers, asset managers, labor funds and faith-based groups, submitted the proposal. It has filed similar ones with nearly a dozen companies, including drug distributors AmerisourceBergen and Cardinal Health and drug companies Johnson & Johnson and Pfizer.
Walgreens' board opposed the proposal, saying it already discloses how it's handling the issue. Preliminary results showed shareholders voted in favor of the measure, though the company said final results will be released in a filing with the Securities and Exchange Commission. CEO Stefano Pessina is Walgreens' largest shareholder, holding about 15 percent of the company's stock, according to FactSet.
Drugmakers, distributors and pharmacies have all come under scrutiny for their role in the crisis that has killed scores of Americans. Lax prescribing and monitoring of prescription painkillers is widely seen as fueling opioid addiction. Now these companies face lawsuits from thousands of state and local governments.
Two influential proxy advisory firms, Glass Lewis and Institutional Shareholder Services, recommended shareholders vote in favor of the proposal. In its analysis, ISS said despite a proliferation of lawsuits, subpoenas and investigations related to the opioid crisis, Walgreens "does not seem to have taken steps at the board level related specifically to managing risks stemming from the opioid epidemic."
Glass Lewis in its analysis said a "more thorough discussion is warranted at this time."
They cite the immediate financial and legal risks to the company, as well as the additional threats. Walgreens owns about one-fourth of AmerisourceBergen, which is also embroiled in opioid litigation.