The Board of Directors
The company has a two-tier board structure consisting of the Board of Directors and the Executive Management.
The Board of Directors supervises the performance of the company, its management and organisation on behalf of the shareholders. It also participates in determining the company strategy.
Executive Management, in turn, has responsibility for the company's daily operations.
The two bodies are separate, and no person serves as a member of both.
The Board of Directors
On behalf of the shareholders, the Board determines the overall strategy and actively contributes to developing the company as a focused global pharmaceutical company. The Board supervises Executive Management in its decisions and operations and may issue new shares or buy back shares in accordance with authorisations granted by the general meeting and recorded in the minutes.
The guiding principle in composing the Board is that it should comprise individuals whose particular knowledge and experience enables the Board as a whole to attend to the interests of shareholders, employees and other stakeholders.
The Board has 12 members, of whom eight are elected by shareholders at general meetings, and four are Novo Nordisk employees from Denmark, elected by Danish employees. See profile of board members.
Shareholder-elected board members
Shareholder-elected board members are elected by the shareholders at the general meetings. Such board members are nominated by either the Board or a shareholder.
Shareholder-elected board members serve a one-year term and can be re-elected at the general meeting. Board members must retire at the first general meeting after reaching the age of 70.
At the Annual General Meeting in March 2011 six out of seven shareholder-elected board members were re-elected. One shareholder-elected board member had decided not to seek re-election. Further, the number of shareholder-elected board members was increased by one from seven to eight. Thus, two board members were elected by the shareholders for the first time.
Nomination of board candidates by the Board
The Board has determined which competencies should be present at the Board - see competence profile for the Board. The competence profile is reviewed annually by the Board and was significantly revised in 2011 to include special competencies relating to the chairmanship, aspirations regarding Board diversity and a 12-year guiding principle to Board tenure.
A proposal for nomination of shareholder-elected board members is presented by the Chairmanship to the Board taking into account required competences and the result of the self-assessment process and the need for integration of new talent and diversity. In nominating candidates, the Chairmanship seeks to achieve a balance between renewal and continuity.
Executive search has helped identify board members who meet such criteria.
Descriptions of the candidates' qualifications accompany the agenda of the general meeting.
Board independence
In February 2012, the Board determined that five of the eight shareholder-elected board members are independent as defined by the Danish Corporate Governance Recommendations, while three shareholder-elected board members are related to the majority shareholder through board or executive positions, see profile of board members.
Employee-elected board members
According to the Danish Companies Act the employees of Novo Nordisk are entitled to be represented by half of the total number of board members elected by the shareholders. At the time of election in 2010 there were seven board members elected by the shareholders, and consequently, the employees elected 4 board members. Board members elected by the employees serve for a four year term and have the same rights, duties and responsibilities as shareholder-elected board members. Employee elected board members may be re-elected. All employees in Novo Nordisk A/S in Denmark, who are employed on the day of election, can vote on the candidates. To be eligible for election the employee has to have been employed by the company for at least one year and be at least 18 years of age. The election is carried out by an election committee that is responsible for ensuring that the election is done correctly. The election committee amongst other things handle the distribution of voting form and counting of votes. Candidates are elected by simple majority. If there are no more candidates than seats, the candidates are elected automatically. When the election has been completed the election committee publishes the result and ensures that the employee elected board members are registered as board members of the company with the Danish Commerce & Companies Agency. The employee elected board members take office on the day of the Annual General Meeting.
Induction and education
New board members undergo an induction programme equivalent to two full days during their first year on the Board and subsequently participate in educational activities as required to update and refresh their competences and knowledge, including issues related to environmental and social risks and opportunities.
Board meetings
The Board ordinarily meets seven times a year, including a strategic session over two to three days. In 2011, the Board met seven times. Four meetings were attended by all board members; three of the members had to be excused from attending one meeting each during the year. By means of a fixed annual calendar, the Board ensures that it addresses its main tasks in a timely manner.
With the exception of agenda items reserved for the Board's internal discussion at each meeting, executives attend and may speak, without voting rights, at board meetings to ensure that the Board is adequately informed of the company’s operations. Executives' regular feedback from meetings with investors allows board members an insight into major shareholders' views of Novo Nordisk.
Trading in Novo Nordisk shares by board members, executives and other employees
Novo Nordisk has issued rules on board members' and executives' trading in Novo Nordisk shares. Consequently, trading is only permitted within a 15-calendar day open window period after each quarterly financial release. Novo Nordisk shall be notified immediately after such trading and Novo Nordisk will publish such trading via the stock exchanges. The rules apply also to persons associated with a board member or an executive (i.e. family) as well as their companies.
