Fuelled by demands raised in the public debate on the back of several corporate downfalls, there has been a healthy debate on how companies must hold themselves accountable to their stakeholders and how, in turn, their managements will need to have better systems in place to ensure good corporate governance.

In 2002, numerous reports of corporate malpractice at some of the world’s prominent companies brought the general confidence in business to an all-time low and sparked an intense debate about corporate governance. Regulators in the US rushed to implement new accounting and governance legislation that brought governance issues, transparency and accountability to the corporate board and management agendas around the world.

Nordisk’s business is supported by good corporate governance, and the current debate confirms to us that our approach over many years is solid. It is a dynamic approach, which builds on continuous evaluation and adjustments when appropriate.

Novo Nordisk is in general in compliance with the codes of good corporate governance designated by the stock exchanges in Copenhagen, New York and London, where Novo Nordisk is listed. Our approach towards these codes is described in the Annual Financial Report. These principles include risk management.

Novo Nordisk has processes to identify, assess and manage business risks. The major risks of not achieving the company‘s business objectives have been linked into our Balanced Scorecard for regular reporting to management.

In 2002, Novo Nordisk established a process to standardise and optimise the company’s risk management system. This has resulted in an improved reporting structure.

Exceutive Management has responsibility for conducting the ongoing risk management process including risk identification, risk assessment and evaluation of risk probability within their areas of responsibility.

A range of activities keep the company alert to emerging issues and enable us to better manage opportunities as they emerge. One such activity is the Novo Group Academy that was established in 2001 to support the governance efforts in Novo Nordisk and other Novo Group companies. The Academy introduces forefront trends in markets, culture, politics and knowledge to the Boards of Directors and management teams, and provides a space to reflect on global business and societal issues. The Academy held two one-day symposia in 2002 on the themes of corporate governance and – in lack of a more precise term – non-financial risks.

The symposia are backed by the Trendspotter journal, presenting leading thoughts on the theme. It is produced in dialogue with a virtual network of ‘trendspotters’, mostly external experts. Systematic issues monitoring is shared in a bi-weekly management update, a series of topical briefing papers and formal issues assessments expressed in risk matrices used by management committees.

In 2002, we initiated a cross-organisational programme to explore how the future
may evolve and affect our business. One aim is to strengthen the organisation’s ability to spot and interpret early signals of change in society and the marketplace. Early in 2003, a set of signposts – indicators of the emerging future – will be defined and monitored as part of ‘trendspotting’ activities.

The ‘Novo Nordisk Stakeholder Dialogue Forum’ is a key element in our sustainability activities. We invite experts to share their knowledge and discuss complex topics, where Novo Nordisk needs to learn.

In 2002, Dialogue Forum hosted a one-day roundtable discussion on socially responsible investing, SRI. Representatives from rating organisations, index providers and ethical screening organisations provided a better understanding of their approach towards healthcare companies and major SRI trends.

The dilemmas of stem cell research were the theme of another roundtable, where ethical, societal and medical aspects were discussed. The meeting was part of our preparations for the hearing on stem cell research in the Danish parliament and the following debate on revising current Danish legislation.