Foundation governance

The Board elects among its members a Chairman and a Deputy Chairman at the ordinary board meeting in March, who constitute the Chairmanship and who plan the board meetings. In March 2020, the Board elected Lars Rebien Sørensen as Chairman and Marianne Philip as Deputy Chairman

The Board has established a Nomination Committee comprising two or more members elected by and among the Board members. One Committee member is appointed as Chair. In March 2020, the Board elected Lars Rebien Sørensen as Chair of the Nomination Committee and Lars Munch as a member. The Nomination Committee assists the Board by reviewing the competence profile for members of the Board, nominating candidates for election to the Board and assessing the candidates Novo Holdings A/S nominates for election as members of the Board of Directors of Novo Holdings A/S.

Based on the competence profile, the Nomination Committee presents to the Board nominations related to the current Board members elected under the Articles of Association and nominations for candidates for new Board members elected under the Articles of Association. The ordinary election of Board members takes place at an ordinary board meeting in March each year. The Articles of Association stipulate that Board members must resign at the end of their electoral period but can be re-elected until they reach the age of 75 years.

In addition, the Board includes three employee representatives elected by and among the employees of the subsidiaries of the Foundation in accordance with Danish law. Employee-elected Board members serve for a 4-year term and have the same rights, duties and responsibilities as Board members elected under the Articles of Association.

The Board:

• approves the overall strategy for the Foundation;
• awards all grants and decides a framework for other grants in which a committee identifies the recipient;
• supervises the commercial activities of Novo Holdings A/S, including the companies in the Novo Group, and approves, among other things, the financial strategy for the Foundation and Novo Holdings A/S, the investment strategy for Novo Holdings A/S and major investments planned by Novo Holdings A/S;
• supervises the performance of the Foundation and the Executive Management; and
• ensures that the Foundation is properly organised.

The Board decides which grant areas the Foundation will support and establishes specialist committees comprising experts of high international calibre. The Foundation also draws on external international experts. This structure ensures that every applicant awarded a grant from the Foundation has been subjected to comprehensive peer review, thereby guaranteeing that the application is assessed on its quality, potential and viability and on the merits of the applicant’s qualifications before the Foundation decides to award a grant.

The Board decides the rules of procedure, and every year it decides on the framework for the committees’ work, including their specific grant instruments and the amount of money allocated for these.

The committee members are elected for a period of up to four years, with the possibility of being reappointed for an additional term of up to two years. The total number of years as Chair and member of the same committee, however, cannot exceed 10 years.

The Board holds at least four ordinary board meetings each year and a number of additional meetings discussing more strategic issues.

The Board determines and approves the Board members’ remuneration for the preceding financial year at an ordinary board meeting in March where the Board approves the Annual Report for the Novo Nordisk Foundation. The Foundation’s remuneration policy is that the Board members receive a reasonable base fee for their work on the Board. The Chairman of the Board receives 3 times the base fee, the Deputy Chairman receives twice the base fee and the other members receive 1 times the base fee. In addition, the Chair of the Nomination Committee receives 0.5 times the base fee, and the other member of the Nomination Committee receives 0.25 times the base fee. Finally, the two Board members elected under the Articles of Association with a medical or scientific background receive remuneration for work as members of the Foundation’s specialist committees, as determined by the Board, in addition to their remuneration as Board members.

In March 2017, the Board of the Novo Nordisk Foundation approved an annual basic board fee of DKK 300,000 for board members, with the Vice Chair receiving the board fee multiplied by 2 and the Chair of the Board receiving the board fee multiplied by 3. Fees for the committees are 0.5 x basic board fee for the Chair of the Nomination Committee and 0.25 x board fee for members of the Scientific Advisory Group.

Each year, the Board evaluates its work and the collaboration between the Board and the Executive Management to identify areas for improvement. The Chairmanship facilitates this evaluation.

The Board’s rules of procedure lay down the framework for the work of the Board and are evaluated regularly to ensure that they reflect the activities of the Foundation at all times.

The Board has decided who may and shall speak on behalf of the Foundation to the public and on which matters. The Chairman speaks on behalf of the Board and about the Foundation’s corporate interests. The Executive Management speaks on behalf of the Foundation about the grant policies and strategies decided by the Board and on all operational issues related to the Foundation’s work. Senior employees may, following usual coordination with the Executive Management, speak about matters within their field of expertise, including on grants and publications.

The Foundation has established a corporate social responsibility policy that covers the Foundation’s grant-awarding activities.

The menu on the left provides an overview of how the Foundation complies with the individual recommendations.

The Foundation’s shares in Novo Holdings A/S are non-negotiable instruments and are prohibited from being sold as long as the Foundation exists. By exercising the Foundation’s voting rights in Novo Holdings A/S, the Foundation’s Board is obligated at all times:

• to hinder any capital increase in Novo Holdings A/S by which the Foundation would lose its majority of votes in Novo Holdings A/S;
• to hinder any sale by Novo Holdings A/S of A shares in Novo Nordisk A/S and/or Novozymes A/S (Novonesis); and
• to ensure that all decisions made in Novo Holdings A/S comply with and respect the provisions of the Foundation’s Articles of Association.

 

The Board is obligated to ensure reasonable consolidation of the Foundation through suitable appropriation of funds, possibly in Novo Holdings A/S, among other things, to enable the Foundation to participate at the discretion of the Board, possibly through Novo Holdings A/S, in future capital increases of Novo Nordisk A/S and Novozymes A/S (Novonesis) and thus maintain the controlling interest in these companies.

To the extent deemed necessary by the Board to uphold and develop the commercial and research activities of Novo Nordisk A/S and Novozymes A/S (Novonesis) as internationally competitive companies, the Foundation, in connection with a capital increase in Novo Nordisk A/S and/or Novozymes A/S (Novonesis) or in connection with, for example, a merger of these companies with other companies, may waive its controlling interest in Novo Nordisk A/S and/or Novozymes A/S (Novonesis). Nevertheless, the Foundation is obligated to strive to maintain material influence in Novo Nordisk A/S and/or Novozymes A/S (Novonesis) through Novo Holdings A/S.

The basis for the Foundation’s ownership of Novo Nordisk A/S and Novozymes A/S is that the two companies are governed by independent and qualified boards of directors, thus ensuring an arm’s length relationship between the Foundation and the two companies.

As shareholder with a majority of the votes in both companies, the Foundation is particularly mindful of observing and respecting the rights of other shareholders.

As a permanent owner of Novo Nordisk A/S and Novozymes A/S (Novonesis), the Foundation has formulated several long-term objectives concerning its ownership. The objectives reflect that Novo Nordisk A/S and Novozymes A/S (Novonesis) must be global leaders in their respective fields with distinct commercial and research activities. Thus, through its ownership the Foundation seeks, among other things, to support the companies in:

• realising a shared vision to contribute positively to the lives of people and the sustainability of society;
• providing engaging and inspiring working environments;
• generating competitive long-term financial results; and
• living up to the Novo Charter.

The Foundation emphasises being a responsible, relevant and capable owner, thereby helping to secure the financial capacity of the companies and supporting societal developments that will benefit Novo Nordisk A/S and Novozymes A/S (Novonesis) as well as the rest of society. This has concrete implications for the Foundation, for instance in relation to our capital reserves and policies.

Several times a year, the Foundation’s chairmanship holds meetings with the chairs of Novo Nordisk A/S and Novozymes A/S (Novonesis), respectively. In addition to this, its executive management meets with the managements of Novo Nordisk A/S and Novozymes A/S (Novonesis).

Through its ownership, the Foundation supports Novo Nordisk A/S and Novozymes A/S (Novonesis) in appointing chairs who are independent of the Foundation and in having a majority of independent members on their boards. Following the annual general meeting, the boards of Novo Nordisk A/S and Novozymes A/S (Novonesis) appoint the chairmanships from their own groups of candidates.

The Foundation nominates two members for each of the boards in Novo Nordisk A/S and Novozymes A/S (Novonesis). One of the appointees selected by the Foundation can be nominated as vice chair. In addition, the Foundation works towards having representation on the boards’ nomination and remuneration committees. The Board of the Foundation refers to the principles for remuneration of board members and executive managements in Novo Nordisk A/S and Novozymes A/S (Novonesis).

19 February 2020