The Novo Nordisk Way
The Novo Nordisk Way of Management is the framework for how the company does business. It consists of three elements: the Vision, the Charter, and a set of 13 global company policies.
The Vision sets out the direction for Novo Nordisk. It expresses what Novo Nordisk is striving for, how the company works and how it is guided by its values in its endeavours to find the right balance between commercial interests and the obligations of a responsible business.
The Charter describes the company’s values, which underpin its commitment to the Triple Bottom Line and sustainable development, its Fundamentals – 11 management principles – and follow-up methods to provide on going systematic and validated documentation of
performance in respect of the Novo Nordisk Way of Management.
The global company policies set global standards and give operational guidelines within 13 specific areas: bioethics, business ethics, communication, environment, finance, global health, health and safety, information technology, legal, people, purchasing, quality and
risk management.
The follow-up methodology has three key components:
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 with 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.
Organisational development is assessed through an annual Organisational Audit, commissioned by the Board of Directors and Executive Management. This process, conducted at the senior management level, includes an assessment of ‘linking business and organisation’ and succession management, and takes both a retrospective and a forward-looking perspective.
Annual reporting accounts for financial and non-financial performance against short-term and long-term targets, strategies, activities, and key business risks and opportunities. Novo Nordisk has adopted the Balanced Scorecard as the company-wide management
tool for measuring progress. As part of the remuneration package, individuals are rewarded for performance that meets or exceeds the financial and non-financial targets in the Balanced Scorecard, which comprise both corporate, unit-specific, and individual targets.
The Triple Bottom Line business principle
Novo Nordisk ‘strives to conduct its activities in a financially, environmentally and socially responsible way’. This statement is anchored in the Articles of Association and embraces the principles upon which the company was founded.
This formal commitment to sustainable development and balanced growth has been built into the corporate governance structures, management tools and individual performance assessments.
The Triple Bottom Line is a broad business principle that ensures that decision-making balances financial growth with corporate responsibility, short-term gains with long-term profitability and shareholder return with other stakeholder interests. It implies that any decision should always seek to balance three considerations: Is it economically viable? Is it
socially responsible? And is it environmentally sound?
Economically viable means managing the business in a way that ensures corporate profitability and growth and seeks to leave a positive economic footprint in the community. Examples are consistent delivery of solid financial results, business-ethical conduct and health-economic considerations.
Socially responsible implies caring for people. For Novo Nordisk, this applies to the people who rely on the company’s products and to employees. It also considers the impact of the business on society. Examples include initiatives to improve access to health, diversity and equal opportunities in the workplace, health and safety, human rights and community engagement.
Environmentally sound decisions address the company's impact on the external environment as well as the bioethical implications of its activities. Examples are environmental management, safe uses of genetic engineering, a strategy to combat climate change, and consideration for the welfare of experimental animals.
Priorities and targets
Long-term priorities and objectives are identified through a 10-year Strategic Planning Process, updated annually and informed by trendspotting and 20-year diabetes scenarios, which are revisited every three years. This plan identifies opportunities for growth, risks
and mitigations, and forms the basis for annual target-setting in the company’s Balanced Scorecards. To ensure focus on shareholder value, long-term targets are set for financial and non-financial performance.
Engaged with stakeholders
Novo Nordisk holds itself accountable to the company’s shareholders and other stakeholders, including individuals or groups affected by its business in local communities. Key stakeholder groups are people with diabetes and others whose healthcare needs it serves, healthcare professionals, policy-makers, educators, employees, investors, suppliers and other business partners as well as media, interest groups and other opinion-formers. To better manage emerging risks and act on opportunities, Novo Nordisk proactively maintains engagement with a broad range of stakeholders within its sphere of influence.
