Eli Lilly 2011 Annual Report Download - page 145

PROXY STATEMENT
Lilly already actively engages with shareholders on important matters irrespective of voting results. We do not
need the artifice of a special board committee to encourage us to talk with our shareholders. In addition to our
extensive investor relations efforts, we actively engage with shareholders on matters of importance, including
corporate governance, company operations, and social issues affecting the company. We have had extensive dia-
logue with shareholders on the two governance issues noted above, and that dialogue continues. We also engage in
shareholder dialogue on many other important issues whether or not they would receive substantial voting support.
In addition, shareholders can communicate directly with the board of directors by writing to them in care of the
corporate secretary.
The independent directors already exercise oversight over shareholder issues. We do not need a special board
committee to inform the board of shareholder concerns. The independent directors are kept advised of shareholder
views and concerns through regular reports by management to the board and relevant committees, particularly the
directors and corporate governance committee and the compensation committee. The board and committees also
periodically receive advice from outside advisors on shareholder relations issues.
The proposal is too prescriptive and could divert the board’s attention from other oversight issues. Maintaining
relations with shareholders is primarily a management function, subject to board oversight. In appropriate but lim-
ited circumstances, it can be beneficial for independent board members to meet directly with shareholders to dis-
cuss important issues. In fact, this has occurred at Lilly. However, involving board members in direct interactions
should not be mandated in a one-size-fits-all fashion. If adopted, the shareholder proposal would require directors
to engage unnecessarily in management tasks that could distract them from their primary role of providing oversight
over company operations and strategy.
The board recommends that you vote AGAINST this proposal.
Item 7. Shareholder proposal on transparency in animal research
People for the Ethical Treatment of Animals (PeTA), 501 N. Front Street, Norfolk, Virginia 23510, on behalf of Mer-
idith Page, beneficial owner of approximately 100 shares, has submitted the following proposal:
RESOLVED, to promote transparency and minimize the use of animals, the Board should issue an annual report to
shareholders disclosing procedures to ensure proper animal care, including measures to improve the living conditions
of all animals used in-house and at contract laboratories, as well as plans to promote alternatives to animal use.
Supporting Statement
As shown below, our Company has not been in compliance with its animal welfare policy.
In 2008, our Company’s in-house laboratories used more than 3,000 animals, including 300 primates and almost
800 dogs. More than two-thirds of these animals were used in painful experiments. Vast numbers of others were
used who are not required to be counted. The U.S. government cited our Company for the death of a dog who stran-
gled in his cage.
A comparison of these figures to 2010 numbers shows that our Company is outsourcing much of its animal
experimentation to U.S. and overseas laboratories, including to China, where there are few animal protection laws
and enforcement is near non-existent.
In one U.S. contract laboratory used by our Company, Covance, Inc., an undercover investigator videotaped
workers striking primates and throwing them against cages. Primates circled frantically in their cages, pulled out
their hair, and chewed at their own flesh.
At other Covance facilities, a primate became trapped in his cage bars, unable to reach food or water for days,
while others suffered frostbite from inadequate weather protection. The government has cited and fined Covance for
improper care and failure to provide pain relief to suffering animals.
Documentation of abusive conditions at another contract laboratory used by our Company, Professional Labo-
ratory and Research Services (PLRS), resulted this year in 14 felony cruelty charges against its employees. The gov-
ernment issued a report confirming the appalling conditions at the facility and PLRS is now out of business. The
abuses included:
• Sick and injured animals—including dogs with ear and eye infections, diseased gums, facial lacerations, and
inflamed feet—were routinely denied veterinary care;
• An untrained worker used pliers to pull a tooth from a struggling, under-sedated dog;
• Dogs and cats were slammed into cages, thrown, kicked and dragged;
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