In 2009, Merck’s governance of Corporate Responsibility (CR) continued to develop, with the goal of improving integration of CR-related processes and increasing accountability for performance across the Company.

In 2007-08, we established a formal CR governance function and process – a new Office of Corporate Responsibility and the CR Council – and we also developed indicators and metrics to foster greater accountability for CR and to determine the Company’s performance progress in numerous areas.

We are confident that our approach to managing our CR is useful in several ways:

• setting CR aspirations
• measuring Merck performance in numerous areas across the Company
• informing Company strategy and developing consensus on complicated issues
• identifying and clarifying key issues and defining the scope of the Company’s responsibility for these issues and possible solutions, and
• inspiring our employees

Our renewed focus on reporting continues to raise awareness of Merck’s CR performance and leadership in particular areas. We see it as a way to engage further with our stakeholders; as our stakeholders become better informed about Merck and our business, we anticipate that this will create greater trust in Merck, our products and points of view, which we believe will translate to superior financial performance. Our business strategy, CR approach and policy views are informed by our stakeholders. By improving our understanding of what our stakeholders value, we are better positioned to respond quickly and effectively to emerging issues.

The Office of Corporate Responsibility

Merck’s CR performance is dependent on all Merck employees and flows throughout the Company – from Merck's Chairman and Executive Committee, through each business unit, subsidiary, manufacturing plant and research laboratory. All of us at Merck are aware of these responsibilities through Our Values and Standards – the Merck code of conduct. But we recognize that a central coordinating function is necessary to ensure a comprehensive CR approach. This is the role of Merck's Office of Corporate Responsibility (OCR), which is led by the Vice President, Global Public Policy and Corporate Responsibility, who reports to Merck's Executive Vice President and General Counsel.

The OCR is responsible for coordinating the development, implementation and communication of Merck's global CR approach and policy, and, with the CR Council, for reporting on Merck’s CR performance. OCR does this in parallel with our stakeholder engagement program. Since its inception in March 2007, the OCR has brought new focus and coherence to the Company’s approach to CR and has established more systematic processes for data gathering, analysis and collaborations. We expect the work of the OCR to support the Company’s business strategy. The OCR is accountable for producing an annual CR report. To contact members of the OCR, please click here.

The CR Council

In addition to the OCR, Merck has established the CR Council, a formal governance body for Merck’s CR approach, membership of which includes senior Merck leaders across all divisions and major functions. The Council's responsibilities include reviewing external issues with the potential to affect Merck's business and reputation; providing high-level guidance on Merck’s overall approach to CR, such as deciding on the priority of CR issues; developing policies and position statements; target setting and data collection, identifying key external stakeholders and engaging in outreach; reviewing Merck’s CR report; and providing counsel and guidance to the OCR. A subset of the CR Council reports annually to Merck's Executive Committee on top CR issues, and to Merck's Board of Directors.

Executive Committee

Merck’s Executive Committee includes nine senior leaders representing the Company divisions and corporate functions. It is headed by Merck Chairman, President and CEO Richard T. Clark. With respect to CR, the Executive Committee is responsible for reviewing Merck’s CR approach and related Company performance, for approving the CR report.

Board Committee on Public Policy and Social Responsibility ( PDF*)

Five independent directors comprise Merck’s Board Committee on Public Policy and Social Responsibility. Chaired by Dr . Thomas E. Shenk, Elkins Professor at Princeton University.and Director Cell Genesys, Inc. and CV Therapeutics, Inc., the group is responsible for advising the Board of Directors and management on Company policies and practices that pertain to the Company’s responsibilities as a global corporate citizen, our special obligations as a pharmaceutical company whose products and services affect health and quality of life around the world, and our commitment to the highest standards of ethics and integrity in all our dealing.

In this role, the Committee reviews social, political, economic and environmental trends and issues that affect or could affect the Company’s business activities and performance, and our stakeholders; reviews the positions and strategies that the Company pursues to influence public policy; and monitors and evaluates the Company's corporate responsibility programs and activities, such as charitable, political and educational organizations, environmental, health and safety issues, employment practices, marketing practices, community and government relations, and global business ethics. The Committee also reviews legislative, regulatory, privacy and other matters that could affect the Company's stakeholders and reviews and makes recommendations to the Board on proposals that relate to public policy and/or social responsibility issues submitted by shareholders for inclusion in the Company’s proxy materials. As necessary, the Committee can also conduct or authorize studies, reviews and/or inquiries into any matters within the scope of the Committee’s responsibilities.

In addition to the Board Committee on Public Policy and Social responsibility, other Board committees oversee aspects of CR-related issues, such as corporate governance, audit and compliance, and executive compensation.

To manage our performance on these issues better, in 2009, we plan to begin to collect CR data more systematically, using a new electronic data collection system. This system will enable us to improve our data analysis and to identify and address measurement gaps.

In addition, we will continue to report in the context of external indicators that are meaningful to our business. This year, we have used several external guidelines and measurement frameworks to inform the scope of our reporting. These include the Global Reporting Initiative (GRI) G3 Guidelines, the Millennium Development Goals, the Access to Medicines Index and the U.N. Global Compact. We are pleased to have achieved a reporting level B on the GRI G3 Guidelines, and our self-assessment has been checked/confirmed by the GRI.

We have published a printed report of our performance in 2008, and to reach more people who might also have an interest in our CR performance but for whom the report or website may be too detailed, we have published a CR Executive summary. We plan to publish our next CR report in September, 2010.