Corporate governance

Governance model of Novo Nordisk, includes Shareholders, Board of Directors, Executive Management, and Organisation

Novo Nordisk’s B shares are listed on Nasdaq Copenhagen and on the New York Stock Exchange (NYSE) as American Depository Receipts (ADRs). Novo Nordisk reports on the Danish Corporate Governance Recommendations designated by Nasdaq Copenhagen, and – as a foreign private issuer – to the Corporate Governance Standards of NYSE except that these standards allow Novo Nordisk to continue to apply Danish corporate governance practices with some exceptions.

For a review of Novo Nordisk's compliance with and explanations to the applicable Danish Corporate Governance Recommendations and the NYSE Corporate Governance Standards, please refer to the section ‘ Corporate Governance Reporting ’.

Novo Nordisk strives to conduct its activities in a financially, environmentally and socially responsible way. This statement expresses the Triple Bottom Line principle which is a lens for decision-making that supports long-term success by creating shared value for society and investors. It is anchored in the company’s Articles of Association and in the Novo Nordisk Way.

The Novo Nordisk Way is the value-based management system. It makes it clear to employees what Novo Nordisk’s values and ambitions are and how the company will achieve them. The Novo Nordisk Way is supported by specific policies in areas relevant across the organisation.

As of 4 November 2022, the A shares held by Novo Holdings A/S represented 23.6% of the total share capital and 75.5% of the total votes of Novo Nordisk. In addition, the B shares held by Novo Holdings A/S represented 4.5% of the total share capital and 1.4% of the total votes. In total, as of 4 November 2022 Novo Holdings A/S’ ownership amounted to 28.1% of share capital and 76.9% of votes of Novo Nordisk. Treasury shares are included in the above, however voting rights of treasury shares cannot be exercised.

Novo Holdings A/S is wholly owned by the Novo Nordisk Foundation. The Novo Nordisk Foundation has a dual objective: to provide a stable basis for the commercial and research activities conducted by the companies within the Novo Group (of which Novo Nordisk A/S is that largest) and to support scientific, humanitarian, and social purposes.

Novo Nordisk is not aware of the existence of any agreements between shareholders on the exercise of votes or control.

The stake held by Board members and employees cannot be determined exactly. However, Novo Nordisk estimated that as of January 31, 2023, the B shares held by Novo Nordisk’s Board members and employees represented less than 1% of the beneficial ownership of the Company.

Novo Nordisk A/S is incorporated in Denmark and is a public limited liability company.

Novo Nordisk’s share capital is DKK 456,000,000, which is divided into an A share capital of nominally DKK 107,487,200 and a B share capital of nominally DKK 348,512,800.

All A shares are held by Novo Holdings A/S, a Danish private limited liability company wholly-owned by the Danish self-governing foundation, the Novo Nordisk Foundation. Please see further information in “Ownership Structure”.

The A shares are not listed but are in principle transferable. However, according to the Articles of Association of the Novo Nordisk Foundation, the A shares cannot be divested by Novo Holdings A/S or the Foundation.

The B shares are listed on Nasdaq Copenhagen under the ticker “NOVO B” and on the New York Stock Exchange (NYSE) as American Depository Receipts (ADRs) under the ticker “NVO” and are fully transferable.

Each A share of DKK 0.01 carries 10 votes, whereas each B share of DKK 0.01 carries one vote. Thus, each B share of DKK 0.2 (the present denomination of the company's shares) carries 20 votes and each A share of DKK 0.2 carries 200 votes.

The current differentiation of voting rights cannot be revoked, as this would violate the Articles of Association of the Novo Nordisk Foundation, which have been approved by the Danish Foundation Authority.

On 2 January 2014 the B shares were split in a five-for-one ratio and the trading unit of the B shares listed on Nasdaq Copenhagen was changed from DKK 1 to DKK 0.2. On 9 January 2014, each of Novo Nordisk’s American Depository Receipts (ADRs) listed on New York Stock Exchange was also split in a five-for-one ratio. Hence, the ratio of B shares to ADRs listed on the New York Stock Exchange remains 1:1.

Special rights are attached to A shares as further specified in the Articles of Association

General meetings shall be called with 3-5 weeks’ notice.

Among others, the Annual General Meeting approves the Annual Report, any amendments to the Articles of Association, elects the chair, the vice chair and 2-8 other members of the Board of Directors as well as the independent auditor.

All shareholders may, no later than 6 weeks prior to the general meeting, request that proposals for resolution be included on the agenda. All shareholders may also ask questions at the general meetings. Moreover, all shareholders can observe the general meeting through a digital transmission.

All documents relating to general meetings are published on Novo Nordisk’s website at least three weeks prior to the general meeting. Information about most current Annual General Meeting can be found here.

Normally, Novo Nordisk hosts an informal shareholder meeting conducted in Danish for the company's shareholders shortly after the Annual General Meeting.

Documents relating to the Annual General Meetings held since 2017 are available here.

The Board of Directors is responsible for the overall strategic direction and supervision of the performance of the company, strategy implementation and the work of Executive Management. The Board may also exercise authorisations granted by the shareholders at the general meetings.

Board members

The Board of Directors currently consists of 12 members, of whom wight were elected by the shareholders at the Annual General Meeting and four were elected by the Danish-based employees of Novo Nordisk A/S.

Shareholder-elected Board members

Shareholder-elected Board members are elected by the shareholders at the general meetings and are nominated either by the Board or by a shareholder. They serve a one-year term and may be re-elected. Descriptions of Board candidates' qualifications are included in the notice to convene the Annual General Meeting.

Diversity

To ensure that discussions include perspectives relevant for the complex, global healthcare environment, the Board of Directors aspires to be diverse. The Board of Directors has adopted and annually reviews the Competence Profile containing guidelines on desired Board member competences and Board composition including diversity targets for gender and nationality.

For the most recent reporting on diversity for the Board of Directors, please refer to the Corporate Governance Report.

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 shareholder-elected Board members. Employee-elected Board members serve for a statutory four-year term, with the next election in 2026, and have the same rights, duties and responsibilities as shareholder-elected Board members.

Independence

Six of the eight shareholder-elected Board members are considered independent as defined by the Danish Corporate Governance Recommendations, while two are considered non-independent as they are either member of the board of directors or executive management of the main shareholder Novo Holdings A/S. Employee-elected Board members are not considered independent according to the Danish Corporate Governance Recommendations.

Board meetings and attendance

The Board ordinarily meets six times a year, including a strategic session over two to three days. Please refer to the Annual Report 2022 on page 50 for a detailed attendance overview, which also includes the attendance for the Board committee meetings.

Except for agenda items reserved for the Board of Directors at each Board meeting, members of Executive Management attend and speak at the Board meetings, without the right to vote, 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.

Board Governance Documents

The Rules of Procedure for the Board of Directors as well as The Competence Profile and Board Committee Charters are available here.

Information about Board members is available here

Chair Committee
The Chair Committee assists the Board of Directors with: the planning of the Board meetings to ensure a balance between overall strategy-setting and financial and managerial supervision of the company; employment, incentive remuneration and performance evaluation of Executive Management; and represents the Board externally.

In March 2023, the shareholders elected the following Chair Committee at the Annual General Meeting:

Helge Lund (re-elected, chair since 2018, independent)
Henrik Poulsen (re-elected, vice chair since 2022, not independent)

Audit Committee
The Audit Committee assists the Board of Directors with the oversight of: external auditors; the internal audit function; handling complaints reported through the Compliance Hotline; financial and ESG (environmental, social and governance) reporting,); financial risk management system and financial counterpart exposure, business ethics compliance, information security, insurance coverage and special theme reviews.

In March 2023, the Board of Directors elected the following members to the Audit Committee:

Laurence Debroux (re-elected, member since 2019 and chair since 2021, independent, financial expert)
Sylvie Grégoire (re-elected, member since 2015, independent)
Mette Bøjer Jensen (re-elected, member since 2022, employee-elected Board member, not independent but relies on an exemption)
Christina Law (re-elected, member since 2022, independent)
Henrik Poulsen (re-elected, member since 2021, financial expert, not independent but relies on an exemption)

Under the US Securities Exchange Act on Audit Committee requirements, three members qualify as independent, while Henrik Poulsen and Mette Bøjer Jensen rely on an exemption to the independence requirements. In addition, two members, including the chair, have been designated as financial experts as defined by the US Securities and Exchange Commission (SEC).

Nomination Committee
The Nomination Committee assist the Board of Directors with the oversight of: the competence profile and the composition of the Board of Directors; the nomination of members of the Board; the nomination of members of Board committees; the evaluation programme for the Board of Directors and the corporate governance of the company.

In March 2023, the Board of Directors elected the following members to the Nomination Committee:

Helge Lund (re-elected, member since 2017, chair since 2018, independent)
Sylvie Gregoire (re-elected, member since 2018, independent)
Thomas Rantzau (re-elected, member since 2022, employee-elected Board member, not independent)
Kasim Kutay (re-elected, member since 2017, not independent)

Remuneration Committee
The Remuneration Committee assists the Board of Directors with the preparation and/or oversight of: the Remuneration Policy for the members of the Board of Directors and Executive Management; the remuneration of the members of the Board of Directors and its committees; the remuneration and employment terms of Executive Management; the Remuneration Report and other reporting.

In March 2023, the Board of Directors elected the following members to the Remuneration Committee:

Henrik Poulsen (re-elected, member since 2022 and chair since 2023, not independent)
Elisabeth Dahl Christensen (re-elected, member since 2022, employee-elected Board member, not independent)
Laurence Debroux (re-elected, member since 2021, independent)
Martin Mackay (re-elected, member since 2021, independent)

Research & Development Committee
The Research & Development Committee assists the Board of Directors with the oversight of: the Research and Development strategy; the Pipeline and the R&D organisation.

In March 2023, the Board of Directors elected the following members to the Research & Development Committee:

Martin Mackay (re-elected, member and chair since 2018, independent)
Andreas Fibig (re-elected, member since 2022, independent)
Sylvie Gregoire (re-elected, member since the establishment in 2017, independent)
Liselotte Hyveled (re-elected, member since 2022, employee-elected Board member, not independent)
Kasim Kutay (re-elected, member since 2020, not independent)

Committee meetings and activities
Please refer to the Annual Report for a detailed meeting attendance overview for all committees in the past financial year.

For a more detailed description of all the committees and their activities in the past year, please refer to the Corporate Governance Report available further down this page.

Board Committee Charters are available under Board Governance Documents.

Evaluation
The Board conducts an annual evaluation to improve the performance of the Board and the cooperation with Executive Management. A description of the annual Board evaluation procedure and the outcome are included in our Corporate Governance Report.

The Board Committees also conduct an annual evaluation. The evaluation by the Committees is based on written questionnaires.

The performance of and collaboration with Executive Management is continuously evaluated by the Board including as part of the annual Board evaluation, and once a year the chair of the Board also conducts a formal interview with each executive.

In relation to the composition of the Board of Directors, the guiding principle is that it should be composed of individuals whose particular knowledge and experience enables the Board of Directors as a whole to attend to the interests of shareholders, employees, and other stakeholders.

The Board of Directors has adopted and annually reviews “The Competence Profile of the Board of Directors of Novo Nordisk A/S” containing guidelines on desired Board member competences and Board composition including diversity targets for gender and nationality.

Board remuneration is governed by the applicable Remuneration Policy adopted by the Annual General Meeting.

Remuneration to Board members is described in the Remuneration Report. The Remuneration Report is submitted to the Annual General Meeting for an advisory vote.

Board Remuneration 2023
Each Board member receives a fixed base fee per year. Ordinary Board members receive a fixed amount (the base fee) while the Chair Committee receives a multiplier thereof. Service on Board Committees entitles members to receive a multiplier of the fixed base fee in addition to their board membership fee.

In March 2023, the Annual General Meeting approved the following remuneration level for 2023:

	^_Board		^{_{Audit committee}}		^{_{Nomination, Remuneration and R&D Committees}}
	^_Multiplier	^_DKK	^_Multiplier	^_DKK	^_Multiplier	^_DKK
^_Chair	^_4.00	^_3,136,000	^_+1.00	^_+784,000	^_+0.50	^_+392,000
^{_{Vice chair}}	^_2.00	^_1,568,000	^_N/A	^_N/A	^_N/A	^_N/A
^_Member	^_1.00	^_784,000	^_+0.50	^_+392,000	^_+0.25	^_+196,000

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Travel allowance
All Board members are paid a fixed travel allowance per Board meeting and per Board committee meeting attended in person. Consequently, no travel allowance is paid to Board members when no travel is required to attend Board meetings or Board committee meetings.

In March 2023, the Annual General Meeting approved the following travel allowance level for 2023:

^{_{Travel allowances for board meetings and committee meetings*}}
^{_{In home country with 5 hours or more air travel}}	^{_{DKK 42,000 per meeting}}
^{_{Outside home country but on home continent}}	^{_{DKK 42,000 per meeting}}
^{_{On another continent than the home country}}	^{_{DKK 84,000 per meeting}}

*Expenses, such as travel and accommodation in relation to meetings are reimbursed in addition to the travel allowance.

Other fees and expenses
For information about payments of social security taxes and travel, accommodation and education expenses, as well as fees for ad hoc tasks outside Board members’ normal duties please refer to the Remuneration Policy and Remuneration Report.

Variable remuneration
Board members are not offered stock options, warrants or participation in other incentive schemes.

Employment of executives
The Board of Directors appoints members of Executive Management and determines their remuneration.

The Chair Committee reviews the performance of the executives. As part of the Organisational Development Process, succession planning is reviewed by the Board.

Executive Committees
The Executive Management has established a number of executive committees to assist or implement Executive Management's decisions. To ensure the organisational implementation of our strategy, Executive Management has established a Management Board consisting of the chief executive officer, executive vice presidents and senior vice presidents.

Further, executive committees include the Research Portfolio Committee responsible for management of the research portfolio and the early device portfolio, the Product Development Committee responsible for management of the product development and device portfolios and the Disclosure Committee overseeing Novo Nordisk’s disclosures to the capital markets.

Information about Executive Management members is available here.

Executive remuneration is governed by the applicable Remuneration Policy adopted at the Annual General Meeting, while the Remuneration Principles adopted by the Annual General Meeting in 2019 still governs long term incentive programmes granted to executives until 2020.

The remuneration consists of a fixed base salary, a short-term cash-based incentive, a long-term share-based incentive, a pension contribution, and other benefits.

Remuneration to Executive Management members is further described in the Remuneration Report, which is submitted to the Annual General Meeting for an advisory vote.

Articles of Association 2023 (English)

Vedtægter 2023 (Danish)

View the latest Annual Reports here.

Novo Nordisk prepares an annual Corporate Governance Report that, among other, describes Novo Nordisk’s compliance with and explanations to the applicable corporate governance standards designated by Nasdaq Copenhagen and the New York Stock Exchange where Novo Nordisk is listed. The statutory Corporate Governance Report is prepared in accordance with Section 107 b of the Danish Financial Statements Act (in Danish: "Redegørelse for virksomhedsledelse, jf. årsregnskabslovens § 107 b").

Novo Nordisk’s Corporate Governance Reports can be found below:

A detailed review of Novo Nordisk compliance with both the Danish Corporate Governance Recommendations and NYSE Corporate Governance standards can be found in the 2022 Corporate Governance Report.