CFO Studio Magazine with Dominic Caruso, CFO, Johnson & Johnson

A DOCUMENT FROM73 YEARS AGOGUIDES THE DECISIONS OF JOHNSON& JOHNSON CFODOMINIC CARUSO BY JULIE BARKER Photography by Matt Furman Grounded “OUR CREDO.” So begins a four-paragraph statement penned by General Robert Wood Johnson II in 1943. “We believe our first responsibility is to the doctors, nurses, and patients, to mothers and fathers and all others who use our products and services,” it starts. Paragraph three expounds: “We are responsible for the communities in which we live and work and to the world community as well. …We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.” These principles of corporate responsibility are chiseled into twin slabs of marble eight feet high and five feet wide at the entrance to Johnson & Johnson’s headquarters in New Brunswick, NJ. The same words appear at the entrance of all the J&J facilities around the world, and no matter how routine it becomes to see the words, everyone pays attention to them. Dominic Caruso, J&J’s Executive Vice President and Chief Financial Officer, who joined the company in 1999, has long since internalized the Credo’s meaning. If a business leader calls him and says, “I need to speak with you about Our Credo,” it’s clear there will be little debate; the General’s words themselves will point to the right solution. He got such a phone call in 2007, just months after J&J’s $1.4 billion acquisition of Conor Medsystems and its unique cardiovascular stent. At the time, J&J had 45 percent of the $6 billion worldwide market for coronary stents, according to a May 2007 article by MD+D ( Medical Device and Diagnostic Industry ). The unique stent was being offered in some foreign markets but had not yet received FDA approval. New tests, however, gave J&J reason for concern: A competitive stent was a safer choice for patients. “We withdrew that product from the market,” Caruso says. Caruso, who was CFO of the medical devices business segment at the time, says walking away from the product’s potential was “gut-wrenching,” but it was a decision made “easy” by the Credo, which creates a structure for thinking about the implications of every action. J&J’s cardiovascular business leader at the time “knew this would be financially painful,” says Caruso. “But he explained the situation, and what he heard from me was, ‘Okay, I get it.’ ” Throughout its 130-year history, J&J has earned a reputation as a top-performing company. Along with Microsoft, Q4 2016 WWW.CFOSTUDIO.COM 7