SAN FRANCISCO - With Samuel Waksal practically peering over his shoulder (and Martha Stewart tidying up the tables), industry heavyweight Amgen Inc. Chairman and CEO Kevin Sharer took on some tough issues from the headlines during a luncheon speech here at the JPMorgan Healthcare Conference.
There's "no issue of more importance" than corporate ethics, Sharer told the packed Grand Ballroom of the Westin St. Francis Hotel.
"This has been pointed out to us by business periodicals [asking], Where are the CEOs of the major companies? Why don't you speak?' [CNN commentator] Lou Dobbs, somebody I respect, has said again and again, You guys are silent. Why are you hiding?' I don't want to hide."
Sharer did not mention by name the insider trading scandal involving New York-based ImClone Systems Inc., which led to the resignation and eventual imprisonment of Waksal and the indictment of domestic maven Stewart. But he didn't have to. "I'm not going to talk about biotechnology," he said - but everybody knew he was, at least in part.
So many "inexcusable" incidents involving companies in various industries have taken place, Sharer said, "that we can't stand up here as a business community and face our fellow citizens and say, It doesn't affect me, it was a small matter, [an] aberration, boys will be boys, these things happen.' That's bullshit."
He said that "in a moral sense - this isn't a legal sense; that's a lot more nuanced and complex - but in a moral sense, if something goes wrong at a company, it is the CEO's fault. I accept that personally."
Sharer, CEO of Thousand Oaks, Calif.-based Amgen since May 2000, noted that CEOs have jobs of high reward and privilege and said that "there are responsibilities that go with that. I don't think all of the people who have my job have come out and said that loud and clear."
To help head off trouble, he urged a "prime ministerial" rather than a presidential model for CEOs in relation to their boards.
"In a presidential model, the president is all powerful [and likely to say], Yeah, we got some cabinet members and they come and go, and I can't even remember their names,'" he said, making a reference to former President Ronald Reagan that drew a laugh from the crowd.
The board should be clearly positioned as the boss of the CEO, Sharer said, but also should be advisory.
"They're kind of in it with me," he said. "They're not there presumptively to catch me when I do something wrong," and individually might be mentors.
"I try to get on the board of directors people who are ahead of me in life, not just in age or maybe not even in age, but people whose life accomplishments put them in a place where they can really advise me," Sharer said.
"You need a strong leadership team who has the courage to overrule and go around the CEO," he added, conceding that "that might seem like a fanciful, crazy notion" to his audience.
Loyalty should be to "higher principles" instead of the CEO, if the choice must be made, Sharer said.
"I cannot believe at those companies - you know the list - where things obviously went grievously wrong" that the leaders "didn't, in a morally indefensible way, know what was going on and should have blown the whistle."
As the four-day conference goes on, attendees of the annual financial meeting, regarded by many as an industry barometer, might have been more interested in the nitty-gritty of making deals and finding new sources of cash for drug development than in high philosophical perspectives. Surging through the hallways of the hotel were scores of suited people on their ways to meetings, cell phones clamped to their heads.
But ideas were floating. During a panel discussion Tuesday, Roger Longman, publisher of In Vivo magazine, offered an eyebrow-raising proposal that licensing and business development are more important in biotechnology today than research and development.
"Big pharma is still fixated on blockbusters, even though nobody knows what will be a blockbuster," Longman said. "Nobody knows that."
The conference continues through Thursday.