Follow-up methodologies
Novo Nordisk has three main follow-up activities to ensure that the Novo Nordisk Way of Management is being lived in practice:
- Annual reporting
- Organisational Audit
- Facilitations
Annual reporting
The annual reporting accounts for the financial and non-financial performance against short-term and long-term targets, strategies, activities risk profile and key business opportunities.
Novo Nordisk has chosen to report on the company’s financial and non-financial performance in one, inclusive document.
The company continues the process to drive integration of the financial and non-financial perspectives to business and seeks to reflect this in the approach to reporting. In the absence of global standards for inclusive reporting, this approach takes its point of departure in current standards for mandatory, financial reporting and current guidelines for voluntary, non-financial reporting. The aim is to drive business performance and enhance shareholder value by exploring the interactions between financial and non-financial objectives. This entails alignment of key priorities, target-setting and definition of key performance indicators, in consultations that involve internal and external stakeholders.
The aim is for the Annual Report to:
- Explain the main trends and factors underlying the development, performance and position of the business during the year
- Explain the main trends and factors that are likely to affect Novo Nordisk’s future development, performance and position
- Interpret and assess the financial and non-financial statements in the context of the environment in which we operate
- Assess what management views as the most important issues facing Novo Nordisk and how it intends to manage these issues
- Assess the company’s strategies and the likelihood that they will be successful
- Be future-oriented
- Be understandable, relevant, supportable, balanced and comparable over time.
Read more about Novo Nordisk's reporting strategy here.
Organisational Audit
Organisational development is assessed through an annual Organisational Audit (OA), commissioned by the Board of Directors and Executive Management. This process, conducted at senior management level, includes an assessment of ‘linking business and organisation’ and succession management, and takes both a retrospective and a forward-looking perspective.
Organisational Audit as a management tool
For more than 10 years OA has been an important management tool in the companies in the Novo Group. The method is a learning process, where the management teams and boards of directors review whether the various business units have met their organisational targets, and also get an impression of future targets for continued organisational development. In connection with the OA each executive vice president prepares a report, which forms the basis for the management's review of the following two issues: 'Linking business & organisation' and 'Succession management'.
Linking business & organisation
What is the present and future business situation of the company - and how is this reflected in the further development of the organisation? The report, prepared by each executive vice president, describes the targets set for organisational development, activities implemented and results achieved. Learning from the experience of implementing the organisational development activities is emphasised, as well as evaluating to what extent the organisation has achieved what the management intended and whether the results warrant the resources allocated.
Regular discussions about the present and future organisational development of the Executive Management group ensure that the interfaces between various business areas are covered. Furthermore, they give management an opportunity to identify further needs for organisational development across the entire organisation, thus enabling them to coordinate various activities.
Succession management
The purpose of succession management is partly to ensure that key positions are always occupied by highly motivated and qualified employees, and partly to ensure that key people and future managers commit to a focused development plan.
Facilitations
Facilitation is a specific follow-up method that is unique to companies in the Novo Group. It is used to provide systematic and validated documentation of how the values are practised in the company and of the compliance levels to the Novo Nordisk Way of Management. The result of facilitations is part of the annual Organisational Audit.
The head of Facilitation & Development reports to Lise Kingo, executive vice president and chief of staffs (COS), and, like the head of Group Internal Audit, has a formal reporting line to the chairman of the Audit Committee.
The global facilitator team consists of senior people with deep insight into the business, who focus on broad themes that are central to the business, such as business ethics, diversity and globalisation. The team also helps educate new managers in the Novo Nordisk Way of Management and how it is applied in practice.
More than control
The facilitations have a dual purpose. The facilitators not only establish whether the individual departments are being run and managed according to the Novo Nordisk Way of Management, they also identify areas for improvements and support the individual departments in implementing action points to address the identified challenges.
The facilitations are planned in close collaboration with Executive Management to ensure that all departments are covered within a 3-4 year timeframe. The facilitators base their work on written information and interviews with managers and employees. The output from the facilitations is gathered together in a report for the department manager, outlining the extent, to which the department is being managed according to the Novo Nordisk Way of Management, as well as specific action points for improvement. Six months after the facilitation, the facilitators follow up on how the action points have been addressed. The report is also shared with the executive vice president of the specific department.
Conclusions from all facilitations are gathered together in one report for the Executive Management team and Board of Directors bi-annually.
Facilitation moves in-house
The facilitation function has existed in Novo Nordisk since 1997. After the demerger of Novozymes in 2000, the function was placed in the holding company Novo A/S to ensure continuity and common values in the two companies.
As of 1 January 2007 the two companies have taken responsibility for the facilitation function. As the companies have grown in size and complexity, it is more important than ever to have a thorough understanding of the specific company in order to ensure its values.
This page has been assessed by PricewaterhouseCoopers as part of its assessment of Novo Nordisk’s statement that it reports ‘in accordance’ with GRI. Please refer to Audit and assurance for a full description of the nature of assurance offered.
