The Audit Committee
The Audit Committee has up to four members elected by the Board of Directors from among its members.
One member is designated as chairman and one member is an employee representative.
The Board of Directors has in March 2018 elected the following
members to the Audit Committee:
Hewitt (re-elected, member since 2012 and chairman since 2015;
independent; financial expert)
Fibig (elected, member since 2018, independent)
Grégoire (re-elected, member since 2015; independent)
Strøbæk (re-elected, member since 2013, employee representative;
Roles and responsibilities
The Audit Committee assists the Board with oversight of a) the
external auditors, b) the internal audit function, c) the procedure
for handling complaints regarding accounting, internal accounting
controls, auditing or financial reporting matters and business ethics
matters (“whistleblowing”), d) financial, social and environmental
reporting, e) business ethics compliance, f) post-completion reviews
and post-investment reviews of investments, g) long-term incentive
programmes, h) information security, i) insurance coverage and j)
Under Danish law, the statutory external auditor is elected by the
shareholders. All shareholders as well as the Board have the right to
propose candidates for election. The Audit Committee recommends to the
Board the statutory external auditor to be nominated by the Board and
elected by the shareholders at the annual general meeting.
Pursuant to the US Securities Exchange Act three members qualify as
independent, including the chairman, while one member, the employee
representative, relies on an exemption to the independence
requirements. In addition, one member, the chairman, have been
designated as financial expert as defined by the US Securities and
Exchange Commission (SEC).
Under Danish law, three members qualify as independent as defined in
the Danish Corporate Governance Recommendations, including the
chairman, and one member, who is an employee representative, qualifies
as non-independent. According to the Danish Corporate Governance
Recommendations a majority of the members of a board committee shall
qualify as independent. Hence, the composition of the Audit Committee
adheres to the Danish Corporate Governance Recommendations. In
addition, one member have competences in accounting and auditing and
the members of the Audit Committee collectively have competences
relevant to the healthcare industry as required by the Danish Act on
Approved Auditors and Audit Firms.
In 2017, the Audit Committee conducted four meetings. The members of
the Audit Committee participated in all meetings within the member’s
term in 2017. Please refer to the Annual Report 2017 on pp 54-55 for a
detailed attendance overview.
Concerns of possible business ethics misconduct, financial fraud,
breaches of the Novo Nordisk Way or quality misconduct may be raised
anonymously by employees and other stakeholders through the global
Compliance Hotline. Complaints made through the Compliance Hotline are
received by the Audit Committee Secretariat. Complaint handling is
monitored by the Board of Directors or the Audit Committee, depending
on the nature of the complaint. As such the hotline works
independently of Executive Management. The Compliance Hotline is available by telephone
and online in multiple languages.
Audit Committee Report 2017
According to SEC reporting requirements for listed companies the
Audit Committee shall report on their activities.
The Audit Committee works according to an Annual Work Plan with
fixed agenda items following key events of the annual financial
reporting cycle. In addition, The Audit Committee request topics to be
discussed on their meetings from time to time.
For the financial reporting year 2017 the Audit Committee held four
meetings (one hosted in US, one hosted in India and two hosted in
Denmark) and discussed the following matters:
Audit Committee matters and governance
- Conducted a self-assessment including a review of the Audit Committee
Charter and assessment of independence, financial expertise and
other legal requirements of each member of the Audit Committee.
- Conducted private meetings with selected members of Executive
Management, Head of Finance, Head of Business Assurance, General
Counsel, Head of Group Internal Audit and with the external
- Reviewed a report on Audit Committee
Review of internal and external audit matters
- Evaluated the performance and the independence of the external
- Recommended the election of the external auditor to
the Board of Directors and annual general meeting.
the performance, independence, effectiveness and organisation of the
internal audit function including a review of the charter for Group
- The Head of Group Internal Audit and the
external auditor presented the audit planning and audit resources.
In addition, they presented the annual conclusion and results of
audit activities conducted each quarter for review including the
conclusion of the audit of internal controls over financial
- Assessed the performance of targets and the
remuneration for the head of Group Internal Audit.
- Furthermore, the external auditor presented its annual long form
report, and the annual Audit Committee Report required by the
- The Audit Committee reviewed and approved the
pre-approval procedure for audit, non-audit and tax services to
external auditors, reviewed the given pre-approvals for the current
year and pre-approved the level for the next financial year
(including engagement letter). Further the Audit Committee reviewed
the procedure for hiring employees from external auditors.
Financial, social and environmental reporting
- Discussed with the CFO, Head of Finance, Head of Business
Assurance, the General Counsel, Head of Group Internal Audit and the
- material and relevant new accounting
pronouncement, implementation of such, review of key accounting
policies and the accounting for certain transactions and
- accounting for significant legal and tax
- critical accounting estimates,
- transactions with related parties, and
- the scope of
internal controls over financial reporting in relation to the
requirements in the Sarbanes Oxley Act and Danish
- The Audit Committee
performed a review of:
- the global finance organisation,
- the financial statement releases for the full year and
interim financial reports,
- the Annual Report including
the statements of financial, social and environmental
performance, and the Form-20 F,
- the quarterly risk
- the risk reporting process,
- the company’s financial counterpart exposure in the
company’s treasury policy, and approved an update hereto,
- the calculation of the long term incentive Programme for
- the model account for the statements of the
financial, social and environmental performance.
- The Audit Committee performed a fraud risk
assessment in Novo Nordisk.
- Review of established Business Ethics activities including a
- the Business Ethics strategy, the Compliance
Programme and the compliance organisation, and
- Compliance reporting from the Business Ethics Compliance
officer, and the US Compliance officer.
- The Audit Committee performed a review of:
reported via Compliance Hotline and the Audit Committee agreed
on the performed investigations, conclusions and sanctions
- the Information Security activities and focus
areas as well as the PwC assessment of the Information Security
- post-completion reviews of fixed asset
investments previously approved by the Board of Directors,
- the dividend policy