The Audit Committee
The Audit Committee has up to five members elected by the Board of Directors from among its members.
One member is designated as chair and one member is an employee representative.
The Board of Directors has in March 2019 elected the following
members to the Audit Committee:
Hewitt (re-elected, member since 2012 and chair since 2015;
independent; financial expert)
Debroux (elected, member since 2019, independent; financial
Fibig (re-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 reported through the Compliance Hotline
(whistleblowing), d) financial, social and environmental reporting, e)
business ethics compliance, f) information security, g) insurance
coverage and h) special theme reviews and other tasks on an ad hoc
basis as specifically decided by the Board of Directors.
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 four members qualify as
independent, including the chair, while one member, the employee
representative, relies 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).
Under Danish law, four members qualify as independent as defined in
the Danish Corporate Governance Recommendations, including the chair,
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, two members 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 2018, the Audit Committee conducted five meetings. All Audit
Committee members attended all committee meetings within the member’s
term in 2018, except one member who was excused from two meetings
within the member’s term in 2018. Please refer to the Annual Report on
pp. 50-51 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 2018
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 2018 the Audit Committee held five
meetings and discussed the following matters:
Audit Committee matters and governance
- Conducted a self-evaluation including a review of the Audit
Committee Charter and assessment of independence, financial
expertise and other legal requirements of each member of the Audit
- Conducted private meetings with selected members
of Executive Management, General Counsel, Head of Group Internal
Audit and with the external auditors.
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 Business Assurance, the
General Counsel, Head of Group Internal Audit and the external
- 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 bi-annual risk
- the risk reporting process,
- the company’s financial counterpart exposure in the
company’s treasury policy, and approved an update hereto,
- the model account for the statements of the financial,
social and environmental performance.
- The Audit Committee performed a fraud risk assessment in Novo
- 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