What assures?
What assures? is a question not easily answered in a single sentence. What is important to understand is that assurance is different to different stakeholders and to different organisations.
Answering the question
Some types of assurance mechanisms are inherent due to the activities of the company. They can be known or unknown to the stakeholders, and they can be inherent to the business or voluntarily added to the activities of the company. For example, to many customers it is inherent that pharmaceutical products are under strict regulatory control, which implies that the customer can at any time rest assured that the product safety and quality is totally dependable, yet not many customers are thinking of this as assurance to them.
According to many of the participants in the ‘What Assures?’ conference in London in November 2004, at which Novo Nordisk took part, there are therefore many different aspects of an organisation’s activities and performance that provides assurance to different stakeholder on different topics.
What is assurance?
Traditionally in sustainability forums, assurance is closely linked to companies’ reporting of their sustainability performance. According to AccountAbility’s AA1000 Assurance Standard´ Assurance is an evaluation method that uses a specific set of principles and standards to assess the quality of a Reporting Organisation’s subject matter, such as Reports, and the organisation’s underlying systems, processes and competencies that underpin its performance. Assurance includes the communication of the results of this evaluation to provide credibility to the subject matter for its users.’
To Novo Nordisk, this type of assurance is just one of many assurance methods which are applied in the company. Just as assurance is either something inherent in the activities of the company or something the company engages in to ensure a higher level of credibility of the activities in the company, there are types of assurance which are mandatory and regulated by authorities and types which are used voluntarily by companies. For all of these types, a range of processes are in place to provide information, documentation and assurance. Some of these are explicit assurance mechanisms, while others implicitly serve as safeguards to reliability.
What assures in Novo Nordisk?
In Novo Nordisk, there are many types of assurance mechanisms, some more evident that others. As a basis for all of these is the Novo Nordisk Way of Management which forms the foundation for ‘how we do business’. The Charter describes the corporate values and management principles, and the Novo Nordisk way of Management also lists policies on all core business activities. The values, on which the assurance mechanisms are designed, are:
- Accountable
- Ambitious
- Responsible
- Engaged with stakeholders
- Open and honest
- Ready for change.
Below is a list of some of the assurance mechanism in place, that can add assurance and thereby credibility to the company’s activities and reporting with regard to accuracy, completeness and reliability of reporting. The assurance mechanisms are grouped according to whether they are internal or externally generated.
Externally generated assurance mechanisms
- FDA requirements and control in relation to products and production
- Regulatory approvals
- SRI ratings, eg SAM, oekom, EIRIS, SIRI and others
- Other requirements and control from authorities
- External audits as part of ISO 9001 and ISO 14001 certification.
Internally generated assurance mechanisms
Communication assures by:
- Annual Report (including non-financial information and other reporting formats, eg Annual Review, web report and site reports)
- Specialist publications, eg Novo Nordisk’s stakeholder magazine, ‘Perspective’
- Employee magazines, People and People+
- Internet and intranet
- Help lines.
Strategies, policies and programmes assures by:
- Policies & Codes, eg Novo Nordisk Way of Management, Business Ethics and accounting policies
- Functional strategies, eg strategies for each EVP area
- Public policies and positions, eg animal welfare policies
- Employee Value Creation models, eg People & Organisation Strategy
- Procurement policies
- Loyalty programs
- Advertising and marketing in accordance with eg the Helsinki Declaration
- Memberships, eg Nordic Partnership, Climate Savers Programmes.
Internal Audit assures by:
- Facilitations by independent facilitators
- Internal audits as part of ISO9001 and ISO14001 certification.
Governance structures assures by:
- Governance structures inl. Audit Committee and whistleblowing system, Group Internal Audit and quality audits, ombudsman function
- Risk management, eg Risk Committee and Risk Management process.
Stakeholder dialogue assures by:
- Climate surveys, eg eVoice
- Open days
- Stakeholder consultations.
Remuneration and awards assures by:
- Performance feedback, eg APIS and link to incentive system
- Balanced Scorecards at different levels, eg Corporate, EVP and SVP.
- Employee Award, eg TakeAction! award, Danish OHS award, Best sales rep of the year, Manager of the year, Novo Nordisk Lifetime Award etc.
- Incentive schemes linked to targets.
Community involvement assures by:
- Investments in the community, eg World Diabetes Foundation, National Diabetes Programmes, TakeAction! etc.
The governance structure and management systems in Novo Nordisk which guides reporting is described in the Corporate Governance article in the Annual Report 2004 and is in accordance with the GRI 2002 Sustainability Reporting Guidelines.
A table containing all elements of the GRI Report Content by section and indicator can be found in the GRI Content Index.
See also the Accounting policies for non-financial data, the assurance provider’s statement and the guide to assurance, and the assurance provider’s Independence statement.
