Terence Gallagher helped Pfizer build a reputation as a governance stalwart
Terence J. Gallagher often gets stares when he tells people his title at Pfizer Inc. ''People are almost always surprised,'' he says. ''They've never heard anything like it.''
Gallagher may be the world's only vice-president for corporate governance. Most companies hand over such duties to their general counsels, who serve as the liaison between the board and senior management. But when William C. Steere Jr. became chairman five years ago, he wanted Pfizer to help shape the then-emerging debate over governance.
Enter Gallagher, a 32-year Pfizer veteran who had been assistant vice-president for administration. Since 1992, the soft-spoken lawyer has helped the company build a reputation as a governance stalwart. Ironically, he has done so even as the company toes a moderate line on board issues. ''At Pfizer, governance has not been a revolution. It has been an evolution,'' says Robert W. Lear, a consultant and executive-in-residence at Columbia University's business school.
Pfizer's carefully cultivated reputation enabled Gallagher to pull off the near-impossible earlier this year: He persuaded the country's most activist investors--from the New York City Teachers' Retirement Fund to TIAA-CREF--to swallow its renewal of a poison pill. To most stockholders, such devices are anathema, since they protect management. Poison pills usually bring a call for a shareholder vote.
Pfizer, however, avoided a fuss over its poison pill, largely through goodwill Gallagher created. He talked investors into accepting the pill by ensuring it would be reviewed every three years by the independent directors. ''Maybe I sell out too easily, but I judge their outreach effort to be serious,'' says Jon Lukomnik, deputy controller for New York City pensions. ''We haven't always agreed on things, but they have been out front in examining governance.''
So what does a corporate-governance VP do? Gallagher started by helping revamp executive compensation, linking pay to performance. Next, he assisted the board in creating a governance committee and designing a charter that empowered the panel--instead of the CEO--to recommend new board members. He also helped to draft a set of governance principles and regularly meets with shareholders.
In his first year, Gallagher visited with 20 top Pfizer institutional investors. ''I learned that some of them weren't much interested in corporate governance,'' he says. ''They didn't care about it unless we failed to make the bottom line next quarter.''
COURTED. More important, however, many investors--who had scant contact with the management of the companies in their portfolios--were suddenly being courted by Gallagher. ''This is a company that has been very attentive to shareholders,'' says B. Kenneth West, the head of governance at TIAA-CREF.
As boards go, Pfizer's is good. CEO Steere and two other insiders do not sit on the audit, compensation, or governance committees. And once a year, the outsiders meet without Steele to discuss his performance and other matters. Pfizer also ditched director pensions in 1995.
But if those moves put it ahead of many, Pfizer is hardly pushing the envelope. Among other things, Pfizer doesn't let shareholders vote each year for all directors. It does not do performance evaluations of either the board or individual directors, and it has no mandatory share ownership rules. Moreover, among his four directorships, Steere serves on the board of Minerals Technologies Inc., whose CEO also sits on Pfizer's board.
Such relationships would be prohibited at governance leaders like Campbell Soup, Compaq, and Chrysler. Gallagher's answer to this charge: ''You can have a good corporate-governance program without going as far as Campbell or Compaq.'' Gallagher's unique title notwithstanding, Pfizer remains firmly in the middle of the pack.
By John A. Byrne in New York
|It is a truth that has comforted Terence J. Gallagher, vice president for corporate governance at Pfizer, Inc., a giant pharmaceutical firm with 40,000 employees, operations in 40 countries, and $10 billion in annual revenues. Gallagher's prime responsibilities include maintaining the company's code of conduct and dealing with large institutional stockholders on social-responsibility issues.|
In the course of a candid conversation on human rights, corporate responsibility and personal faith, Gallagher mentions several examples where the economic was as vital a need as any other.
"We have operations in South Africa, and have for a long time. When apartheid was in place, religious groups wanted us to withdraw. I pointed out we were operating in accordance with our code of conduct, which requires equal opportunity in hiring and promotions.
"We had been in South Africa since the 1950s, so we had employees who had been with us for 30 years. We did not want to abandon these employees, and, as a pharmaceutical company, we felt that we were providing a vital service to people, black or white, by providing basic pharmaceuticals."
After apartheid, Pfizer was asked by a delegation of investors from the Interfaith Center on Corporate Responsibility to adopt the "Code of Conduct for Businesses Operating in South Africa," written by Catholic bishops and other church leaders from the South African Council of Churches. Gallagher told the group, which included Maryknoll Father Joseph La Mar and Ursuline Sister Barbara Glendon, that Pfizer's code was similar and "generally consistent."
After much back and forth, the company issued a statement to that effect, one that Gallagher shepherded through all necessary channels.
"We were not only pleased with the compromise that resulted from open and frank dialogue," he says, "but gratified when six other companies, following our lead, accepted the South African [Council of Churches] code's standards for their businesses in that country."
In another instance, Gallagher recalls the scene in Haiti, where he traveled to donate Pfizer goods. "I was discouraged by what I saw both in terms of human rights and from a business perspective. In that brief visit, it looked like a country that was virtually bankrupt. You've got to provide some sort of livelihood for the people to get human rights to mean anything."
Though doing good helps Pfizer do well, Gallagher's faith also directs his work.
"As a Catholic, I am involved in humanity generally and have a responsibility for my fellow man. Whatever I can do to assist my fellow man, I should do."
He was raised in New York City in a family "that was always reaching out to other people." This included housing orphaned cousins and others in need. He attended Manhattan College and Harvard Law School. Today, Gallagher is active in his parish—St. Joseph's in Bronxville, New York—and as a Knight of Malta.
http://salt.claretianpubs.org/issues/worldcom/neighbor.html (Proof Positive)
|Pfizer, Inc. engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals in the United States, Europe, Canada, Asia, and Latin America. Its Pharmaceutical segment offers products for cardiovascular and metabolic diseases, such as Lipitor for elevated cholesterol levels in the blood; Norvasc for hypertension; Caduet for cardiovascular events; Chantix/Champix for smoking cessation; and Exubera, the inhaled human insulin therapy for glycemic control. Its products for central nervous system disorders include Zoloft for various disorders; Geodon/Zeldox, a psychotropic agent; Aricept for Alzheimer's disease; and Lyrica for adjuctive therapy for adults with partial onsent epileptic seizures. This segment also offers Celebrex for osteoarthritis, adult rheumatoid arthritis, acute pain, menstrual pain, and familial adenomatous polyposis; Zithromax for bacterial infections; Vfend for serious and potentially fatal fungal infections, esophageal candidiasis, and blood stream infections in non-neutropenic patients; Zyvox for bacterial infections; and Viagra for erectile dysfunction; and Detrol for overactive bladder. In addition, it offers Camptosar, a therapy for metastatic colorectal cancer; Sutent, an oral multi-kinase inhibitor; Xalatan/Xalacom for open-angle glaucoma and ocular hypertension; Genotropin for various growth disorders; and Zyrtec for allergies and hives. The company's Animal Health segment offers parasiticides, anti-inflammatories, vaccines, and antibiotics. Pfizer also offers Celsentri (maraviroc), an oral CCR5, for HIV treatment. It serves retailers, clinics, pharmacies, doctors, nurse practitioners, physician assistants, pharmacists, hospitals, pharmacy benefit managers, managed care organizations, and government agencies. Pfizer has collaboration with Icagen, Inc.; Bristol-Myers Squibb Company; and Graffinity Pharmaceuticals AG. The company was founded in 1849 and is headquartered in New York, New York.|
Nigeria sues drug giant
The government of Nigeria is suing Pfizer, charging that the world's largest pharmaceutical company conducted improper trials of the anti-meningitis drug Trovan in children.
The Nigerian government wants $7 billion in damages for the families of children who allegedly died or suffered serious side effects after being given the experimental antibiotic, BBC News reported. A few years ago, the Nigerian state of Kano filed a separate lawsuit against Pfizer seeking $2.7 billion in damages. That suit is still working its way through the legal system.
Pfizer tested Trovan in children during a meningitis outbreak in Kano in 1996. About 200 children died and others suffered mental and physical problems. In its lawsuit, the Nigerian government says Trovan caused the deaths and injuries and that the children were injected with the drug without approval from the country's regulatory agencies, BBC News reported.
Pfizer has steadfastly denied any wrongdoing and says the trials were conducted with the full knowledge of the Nigerian government, according to Nigerian and international law.
In the United States, Trovan is approved to treat adults, but not children. – (HealthDayNews)