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Johnson & Johnson Report

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Johnson & Johnson

Executive Summary

It has been 130 years since Johnson & Johnson was established in 1886 in United States, and now this company has a large scale with over 250 branches all over the world. This report will briefly introduce the background of this company and analyze the status quo of its corporate governance from five mainly expects, including shareholders’ rights, equitable treatment, stakeholders, disclosure, and Board of directors.

Totally, Johnson & Johnson runs different qualities of management in different areas. According to my CG scoring results, corporate governance of this company reaches target outcome in two of five expects, and performs not much well in shareholder’s rights, Board of director and disclosure. Though Johnson & Johnson publishes all shareholders’ principles on official website, and updates SEC filling and other activities on time.

Johnson & Johnson has 12 members in board of directors, but Alex Gorsky serves as the chairman of BOD, and simultaneously holds CEO of the company from 2012. No independent director exists in the BoD, leading to potential problems of centralization. Also, the GSM meeting information disclosure is not detailed enough to display the process of changing BoD members and procedures for minority shareholders.

Though value of Johnson & Johnson ranked No.39 in “Fortune” in 2016, its stock price is going down recently and fluctuated a lot due to some scandals and negative comments. This report will go through the strength and weakness of the corporate governance of this company, and point out its threats as well as opportunities.

Company Background

Johnson and Johnson was founded in 1886 by three brothers. In 1888 they published their first book called “"Modern Methods of Antiseptic Wound Treatment” that discussed practicing sterile surgeries. Also in 1888 the first “First Aid Kit” was introduced. Over the years, they expanded to other countries and their product. In 2016 it marked 130 years of transforming and caring for communities, consumers, and patients. Over 130 years Johnson and Johnson has only had eight Chairman of Executive Officers. And now in 2017, Johnson & Johnson only has seven Chairman of Executive Officers. Their vision is “Caring for the world, one person at a time…” (Johnson & Johnson Services, 2013)

Johnson & Johnson is a care company for personal hygiene products, medical equipment manufacturer. Johnson & Johnson is the world's large-scale, Johnson & Johnson Diversification of products in health care products and consumer care Products Company. The world of the film to the glass of the Johnson & Johnson occupied a strong brand. According to the results published in the "Fortune" in 2016, Johnson & Johnson market value of the index rating ranked 39 in the world. Now the global turnover of 126 billion U.S. dollars. Johnson & Johnson more than 230 branch offices in 60 countries around the world, with about 125,000 employees, product sales in 175 countries and regions.

Johnson & Johnson does face a challenge to control the structure and stableness of the whole company, and need to analyze the total governance, since some scandals occurred in recent years. During that time, Johnson & Johnson almost every month committed serious mistakes, such as wood and metal debris were found in (Rolaids) in chewed pieces, excessive baby lotion bacteria, etc. In several cases, the products have been recalled because the stench, and the problem has been traced to cargo pallets. Because of the "invisibly" recalling antipyretics Merrill lynch (Motrin) incurred, the company was mocked: it signed a contract with a company, which bought all the shelves of unqualified products, but there was no public statement. Those problems also reflect weakness of inside governance.

Summary of Results


Johnson & Johnson is recognized for its corporate repute, strong customer base, brand loyalty and brand image. Johnson & Johnson has successfully employed experienced executives in the board, that helps it distinguish itself from its competitors and plan promote strategies. The firm declared dividends for its shareholders quarterly since 1944 and the dividends have been increasing every year for the consecutive years. The use of independent offices working as standalone units in various markets of the world provides the opportunity to develop concepts with cultural considerations and hence, helps the company manage the diversity. The clear written policies published on official website can lead to more detailed disclosure about the shareholders, leaders team and ongoing activities. And an important distinction has been made between executive (9) and non-executive directors (3).



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