Bill Weldon announced his retirement today as J&J CEO.  He will remain as Chairman of the Board. His replacement is Alex Gorsky, a longtime J&J executive.

Of course, every business leader has to be judged according to a complex set of factors, particularly at a diversified and leading global company like J & J.  However, I think Weldon’s legacy will be marred by the fact that he presided with little apparent sense of urgency over an extraordinary decline in the J & J brand. From Tylenol to Risperdol, from Motrin to hip replacements hardly any area of the company’s healthcare portfolio was spared mismanagement and scandal in recent years.

When former CEO James Burke reflected on the meaning of the Tylenol crisis–the defining event in J & J’s formerly exemplar corporate reputation—he said that he was relying on a century of public trust.  The way Burke and J & J handled that crisis demonstrated to the public that it was a special company and that could be trusted to adhere to the lofty principles in its famous Credo.  That is the company that Weldon inherited.  What he will hand over to his successor is a company that has lost its way and that is no longer special in the eyes of customers.

J & J may never regain the stature it once had unless a transformational leader leads the company back to living the core values enunciated in its Credo.  Weldon’s retention of the Chairman’s role does not bode well for the company, but hopefully over time Alex Gorsky will emerge from Weldon’s shadow and help make J&J a great company again.

Wall Street firms are just beginning to understand how devastating the Volcker Rule is to their business model.