The Audit Committee assists the Board with of Directors with: the external auditors; the internal audit function; handling complaints reported through the Compliance Hotline; financial, social and environmental reporting (ESG reporting); and internal controls over financial and ESG reporting; business ethics compliance; IT security; and insurance coverage.
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.
As part of its oversight of external reporting, the Audit Committee discusses significant legal and tax issues with the chief financial officer, head of finance & compliance, the general counsel, head of group internal audit and the external auditors. The chief financial officer is charged with responsibility for the tax strategy and policy, which is endorsed by the Board of Directors.
The Audit Committee has five members elected by the Board of Directors from among its members. One member is designated as chair and once member is an employee-elected Board member.
In March 2021, the Board of Directors elected the following members to the Audit Committee:
Out of the five members of the Audit Committee, three members qualify as independent as defined in the Danish Corporate Governance Recommendations and the Act on Approved Auditors and Audit Firms, including the chair, while Henrik Poulsen and Stig Strøbæk qualify as non-independent given that Henrik Poulsen is a member of the Board of Directors of the main shareholder Novo Holdings A/S and Stig Strøbæk is an employee-elected Board member. According to the Danish Corporate Governance Recommendations a majority of the members of a board committee should qualify as independent. Hence, the composition of the Audit Committee adheres to the Danish Corporate Governance Recommendations. In addition, two members, including the chair, have competences in accounting and auditing and collectively the members of the Audit Committee have competences relevant to the healthcare industry as required by the Danish Act on Approved Auditors and Audit Firms.
Pursuant to the US Securities Exchange Act three members qualify as independent, while two members 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).
In 2020, the Audit Committee conducted five meetings. All Audit Committee members attended all committee meetings within the member’s term in 2020 except one member who was excused from one meeting within the member’s term in 2020. Please refer to the Annual Report 2020 on page 44 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.