Running a responsible organization

The previous section looked in detail at the issues that are most important for Shire as a pharmaceutical business; we will now turn to how we manage Shire as an organization.

The CR Committee

As Chief Financial Officer I take Board level responsibility for CR, which includes chairing the CR Committee. We made a number of changes to the composition of the Committee this year and there is now a good balance of senior managers and function heads whose roles have particular relevance to CR. The new members include Caroline West, our recently-appointed Chief Compliance Officer, Eliseo Salinas, Chief Scientific Officer and David Pendergast, who is the General Manager of Shire HGT.

We meet at least three times a year and follow up on issues that arise in between meetings. This year, topics on our agendas have included:

  • our EH&S mission statement;
  • the introduction of fuel-efficient 'hybrid' cars to our sales force fleet;
  • a presentation by the BITC on Shire's performance in the 2004 CR index and suggested areas for improvement - e.g. increased amount of measurable performance data in the CR report, improvements to supply chain management, development of environmental targets, increased measurement of impact of community initiatives;
  • review and updating of our CR policy;
  • enhancement of Community policy to pro-actively encourage employee volunteering;
  • progress on our global recycling programs;
  • global fund-raising appeals for victims of the Tsunami and Hurricane Katrina disasters;
  • development of the CR risk schedule;
  • membership of Business for Social Responsibility (BSR) to provide educational and networking opportunities for colleagues in the US; and
  • the inclusion of CR objectives in our 2006 Corporate Balanced Scorecard.

The CR Committee is responsible for managing and assessing CR risks. We carried out a full CR risk assessment in 2004 and reviewed it in depth during 2005. Our internal audit process has also been broadened to cover a wider range of issues and if this identifies any CR-related risks these are submitted to the Executive Committee and the Board. This means we are constantly monitoring both direct risks, such as those relating to regulatory change or product safety and indirect risks.

The Committee also sets our CR objectives. You can see a summary of these on the inside cover of this report. These are monitored by the Committee and reported to the Executive Committee and, annually to the Board and cover both the commercial aspects of our business and the way in which we operate as a company, including the management of clinical trials, product safety, patient education, ethical selling, procurement and environmental performance, as well as people-related issues such as diversity and work-life balance.

There are also formal policies addressing many of these issues, including animal welfare, business ethics, health and safety, product quality, anti-bribery and drug safety. We also have our own code of business conduct, overseen by our compliance team. We are transparent about our approaches to stakeholders so our policies and CR objectives can be viewed on our website; www.shire.com

CR issues are also part of the annual performance appraisals we carry out for senior managers and for any line managers who run functions or where CR issues are particularly relevant. We also run specific CR-related training for people working in areas such as sales and marketing, environmental legislation and corporate governance.

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Engaging with our stakeholders

We spend a great deal of time building and maintaining productive relationships with all our key stakeholders. This ranges from meetings with institutional shareholders, which I take part in myself, to regular contact with regulators and health providers such as the US FDA, the UK Medicines and Healthcare products Regulatory Agency (MHRA) and EMEA, to the relationships we have with specialist physicians and patient groups, such as Children and Adults with ADHD, the Society for Mucopolysaccharide Diseases, the Alzheimer's Society and the National Osteoporosis Society.

Of course, one of our most important stakeholder groups is our employees. We have an active internal communications program to ensure we keep Shire people engaged in our business. As part of our regular efforts, we make use of our global intranet to keep employees informed of news and progress and senior leaders' telephone conference calls are held quarterly with our Executive Committee. At least once a year, the Executive Committee fronts an 'all employee' meeting at our major sites where staff can ask any question as well as hear about key topical issues.

Our written communications comprise emails from the Chief Executive, an online newsletter, site newsletters and a global employee magazine. We conducted a survey of employees' views of the magazine at the end of 2005 and are responding to the suggestions made for content and style enhancements with a 'new look' magazine in 2006.

In addition, we conducted a development needs assessment survey of all employees in 2005. We asked our people what they saw as the most important skills that Shire needed, to meet its goals for the future and asked them to assess the gap and needs. In 2006 we will be introducing a capability framework in response to this, this will ensure greater focus on people development and honing the right skills to enable us to compete most effectively in the future. I'll say more about progress with this in next year's report.

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CR in 2005

As always, we responded to a wide range of external requests for information about our approach to CR – some general in nature and some specific to certain aspects of CR.

We signed up as a user of the new London Stock Exchange Corporate Responsibility Exchange; an online database designed to provide information to research groups and assessors.

During the year we were confirmed again as constituents of the FTSE4Good index, we were highly placed in The Guardian newspapers 'Giving List' index of top UK companies that contribute to charity, earning ourselves a position again in The Per Cent Club (a grouping of companies that donate in excess of 1% of their profits to charity) and we were within the top 100 companies in the Business in the Community 'Companies that Count' index.

Insight Investment and FTSE4Good in collaboration with BITC, prepared a report on Boards' involvement in CR and how functions are structured. I took part in the research for this report, which was published in early 2006.

Following this involvement, I was invited to address a group of senior finance professionals on practical approaches to CR by a former partner of PricewaterhouseCoopers. I delivered a presentation that drew upon our own experiences within Shire of how CR is at its most effective if you build it into the line management responsibilities of the business and make it relevant to day-to-day decisions and actions.

The rest of this section of our 2005 CR Report looks at specific aspects of corporate responsibility in Shire, from how we treat our people, to health and safety, to our involvement in the wider community.

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