Social: Bribery and corruption
Strategy, risk and communication: Competitive and sustainable marketing strategy
What we did
In 2012, we spoke to the chair to understand the lessons learned by the company to avoid a repeat of the mis-selling scandal in the US. In 2013, shortly after we learned of the further scandal in China, we engaged with the company to gain assurances that it would take the issue seriously. We spoke to the chair and later the senior independent director to express concerns that in spite of a review of the remuneration of its sales force in the US, further issues had arisen in China.
We continued to raise questions about the company’s response throughout 2014 and 2015 with the newly appointed chair and the CEO. In early 2016, we received a detailed briefing from the head of ethics and compliance on the changes to the company’s expenses system which were put in place to help ensure that the company avoids any bribery payments in future.
We also met the chair of the corporate responsibility committee in 2016 and 2017 to discuss implementation of the changes to the company’s sales model to make sure the company avoids further mis-selling incidents, while at the same time remaining competitive.
Following news of the Chinese scandal, the CEO announced an independent investigation into its causes by a law firm.
In January 2015, the company completed the roll-out of a new remuneration model for its sales teams, replacing individual rewards based on sales or market share with rewards based on the quality of interactions with health care professionals. A year later, the company stopped paying doctors to speak on its behalf, instead engaging with them through digital channels and providing direct contact with its own medical teams. The company also strengthened the training on its code of conduct and put in place tighter controls on the authorisation of business expenses and external payments.
We have received assurances that GSK is carefully monitoring the impact of these changes and that there have been no adverse consequences. Indeed, we were comforted to hear the company report that in a survey of US-based healthcare professionals in 2016, the company ranked first for customer trust and company value.