Case Study: Kenneth C. Frazier: A Golden Rule Leader
Kenneth Frazier’s leadership at Merck exemplifies stakeholder capitalism in practice even though he never used the term. His refusal to prioritize short-term gains over innovation, his moral clarity in moments of social crisis, and his commitment to equity and workforce development illustrate how CEOs can deliver value across multiple stakeholder groups.By Bruce Bolger
Patients and Public Health: Innovation Over Short-Term Profits
Ethical Leadership and Social Responsibility
Commitment to Employees and Equity
Community and Society
Balancing Profit and Purpose
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Kenneth C. Frazier’s legacy is not just Merck’s scientific breakthroughs, but a model of purpose-driven leadership that demonstrates how corporations can—and should—create value for society as well as shareholders. The company’s stock price almost tripled during his tenure, powered in part by the best-selling anti-cancer drug Keytruda, whose high price has raised questions in some quarters as the company’s current management seeks ways to delay the loss of its patent.
This article continues a series highlighting the practice of stakeholder management in business. Kenneth C. Frazier, the former Chairman and CEO of Merck & Co. (2011–2021) is featured as an exemplary leader in the Enterprise Engagement Alliance’s book Enterprise Engagement for CEOs. Click here for a list of all the Golden Rule leaders.
Widely regarded as one of the most influential corporate leaders of his generation, he was the first African American to lead a major pharmaceutical company. During his tenure, he led Merck through a period of scientific breakthroughs and societal disruption. His leadership style provides a clear, practical example of stakeholder capitalism in action—balancing the needs of shareholders with those of patients, employees, communities, and society at large.
In 2021, he had a Glassdoor rating of 96%; the company had a score of 4.25, with 82% of employees saying they would recommend the company to a friend. Today, the CEO Rob Davis gets an 84% approval rating; the company scores 4.1, and 82% would recommend it to a friend.
Patients and Public Health: Innovation Over Short-Term Profits
- Research and development. Despite Wall Street pressures, Frazier refused to cut Merck’s research and development budget to boost short-term earnings.
- Keytruda breakthrough: Under his leadership, Merck developed Keytruda, an immunotherapy drug that has revolutionized cancer treatment. Frazier argued that delivering lifesaving medicines was both a moral responsibility and a long-term value driver.
- Pandemic response: Merck took a collaborative approach during COVID-19, partnering with Johnson & Johnson to manufacture vaccines, demonstrating cross-industry commitment to public health, a fundamental principle of stakeholder capitalism.
Ethical Leadership and Social Responsibility
- Access to medicines: Frazier promoted global initiatives to increase access to HIV and HPV vaccines in underserved regions, reinforcing Merck’s role in societal impact beyond profit.
- Response to period social unrest. Frazier did stir a small controversy when he resigned from the US President’s Manufacturing Council after the administration’s response to violence in Charlottesville, stating he felt a responsibility to “take a stand against intolerance and extremism.”
Commitment to Employees and Equity
- OneTen Initiative (2020): Frazier co-founded this coalition of CEOs to create one million jobs for Black Americans over 10 years, focusing on skills-based hiring rather than four-year degrees.
- Merck Workforce Development: He expanded employee development programs and positioned diversity, equity, and inclusion (DEI) as central to Merck’s culture.
Community and Society
- Civic engagement: Frazier has been outspoken on issues of racial justice, voting rights, and equal opportunity, pushing business leaders to recognize their societal obligations.
- Philanthropy and education: He has supported initiatives in education and mentorship, especially aimed at underrepresented communities, reinforcing the link between corporate success and societal progress.
Balancing Profit and Purpose
- During Frazier’s tenure, Merck’s stock price roughly tripled, demonstrating that long-term shareholder returns can coexist with stakeholder commitments.
- He consistently emphasized that serving patients and communities was not in conflict with investor value—but essential to it.
Enterprise Engagement Alliance Services
Celebrating our 15th year, the Enterprise Engagement Alliance helps organizations enhance performance through:1. Information and marketing opportunities on stakeholder management and total rewards:
- ESM Weekly on stakeholder management since 2009. Click here to subscribe; click here for media kit.
- RRN Weekly on total rewards since 1996. Click here to subscribe; click here for media kit.
- EEA YouTube channel on enterprise engagement, human capital, and total rewards since 2020
Management Academy to enhance future equity value for your organization.3. Books on implementation: Enterprise Engagement for CEOs and Enterprise Engagement: The Roadmap.
4. Advisory services and research: Strategic guidance, learning and certification on stakeholder management, measurement, metrics, and corporate sustainability reporting.
5. Permission-based targeted business development to identify and build relationships with the people most likely to buy.
Contact: Bruce Bolger at TheICEE.org; 914-591-7600, ext. 230.
