Slide 1 5,05 4,10 3,50 4,72 11,82 Dr Göran Ando Chairman of Novo Nordisk A/S Mexico City – part of Cities Changing Diabetes Public Boards Perspective

Slide 1

Dr Göran AndoChairman of Novo Nordisk A/S

Mexico City – part of Cities Changing Diabetes

Public Boards Perspective

Slide 2

What does a board do?

Public Board Perspective October 2015

Slide 3

We hire and fire the CEO


Slide 4

Management

The board appoints management, supervises on performance and provides direction for the strategy

StrategyPerformance


• Supervise the financial performance of the company

• Supervise the performance and integrity of Executive Management

• Participate in managing the company by providing direction to Executive Management

• Participate in determining the strategy for the company, and approve major business plans and decisions

• Ensure the right Executive Management of the company

• Ensure the right organisation of the company

Slide 5

• Being more international

• Having more sector competence

• Having more diverse and balanced competencies

• Having more balanced tenures

The diversity of boards is increasing and board members are moving toward …

Novo Nordisk also has a clear approach and guiding principles in order to increase

diversity

Diversity is an overarching trend in board work leading to more careful recruitment of new candidates


Slide 6

• Six nationalities are represented on the board

• Five female and seven male board members

• Five of eight shareholder elected board members have a strong pharma background

• Three of eight shareholder elected board members have a strong US background

• Two of eight shareholder elected board members have profound financial expertise

… and the board has seen radical change over the past five years as just four members have been on the board for more than five years.

Novo Nordisk Board of DirectorsThe Novo Nordisk board

is diverse in multiple ways

The board of Novo Nordisk is diverse and has profound expertise in a number of key areas


Slide 7Public Board Perspective October 2015

Boards are different throughout the world

United States United Kingdom Sweden Denmark

Chairman and CEO role often the same person

One tier board systemCEO frequently also

a board member

Nomination committee of major shareholders

Two tier board system

Slide 8

Characteristics of Danish ownership structureNovo Nordisk’s two tiered board structure

is common in Denmark

Danish companies are frequently foundation owned and governed through a two tier board structure

*The Chairmanship is directly elected by the annual general meeting


• Foundation majority ownership is common

• Foundations can ensure sufficient “free float” to encourage other strong shareholders (if company is public)

• Foundations have controlling vote

• Pharmaceutical companies Novo Nordisk, Lundbeck and Leo Pharma are all foundation owned

• Foundation ownership represents an ideal ownership structure ensuring a long term focus and stability

Shareholders

Board of Directors

Executive Management

Organisation

Audit Committee

Chairmanship* NominationCommittee

Remuneration Committee

Slide 9

Note: Treasury shares are included in the capital but have no voting rights

Share structure The Novo Nordisk Foundation

Stable ownership structure - secured through A and B-share structure


• The Novo Nordisk Foundation is a self-governing institution that:• provides a stable basis for Novo Nordisk• supports scientific, humanitarian and social purposes

• All strategic and operational matters are governed by the board and management of Novo Nordisk

• Overlapping board memberships ensure that the Novo Nordisk Foundation and Novo Nordisk share vision and strategy

• The Novo Nordisk Foundation has no right to divest

Novo Nordisk A/S

Novo Nordisk FoundationInstitutional and private

investorsNovo A/S

A shares537m shares

B shares2,063m shares

74.7% of votes27.0% of capital

25.3% of votes73.0% of capital

Slide 10

Global leader in diabetes care Global insulin market leadership

Novo Nordisk at a glance

Source: IMS MAT May 2015 volume figures


R&D facilityManufacturingGlobal/regional headquarter

North America: Market share 37%

International Operations: Market share 55%

Japan & Korea: Market share 49%

Europe: Market share 47%

China: Market share 57%

Global insulin market share: 47%• A focused pharmaceutical company with leading positions

in diabetes, haemophilia and growth hormone

• Exclusively focused on proteins and peptides

• Double digit top line growth driven by diabetes pandemic

• Significant growth opportunities fuelled by global

presence and strong R&D pipeline

Slide 11

Share price development Annual cash return to shareholders

Novo Nordisk has offered an attractive shareholder return through share price increase and annual cash return

1 Based on improved outlook for free cash flow generation primarily related to partial divestment of NNITNote: Dividends are allocated to the year of dividend pay. For 2015 expected free cash flow is DKK 33-35 billion. Share repurchase programmes run for 12 months starting February until end January of the following year


0

50

100

150

200

250

300

350

400

450

2000Market cap ~90bDKK

2014Market cap ~700bDKK

2015Market cap peak >1000bDKK

Share price in DKK

2000 2015 2011 2012 2013 2014 2015E0

5

10

15

20

25

30

35

6 8 10 12 13

1212

1415 15

2.5

DKK billion

Share repurchase DividendFree cash flow

Expanded share repurchase1

Slide 12

• 39,000 employees globally

• 15,000 employees in Denmark spread across Headquarters Research & Development Manufacturing

• 1,000-2,000 new employees added net per year

Source: Danske Bank, 8 September 2015

Nordic companies listed by market cap Novo Nordisk employee numbers

Company name Market cap (mDKK)

Novo Nordisk A/S 967,979

Hennes & Mauritz AB 422,303

Nordea Bank AB 319,380

Statoil ASA 316,496

ABB LTD-REG 293,753

AP Moeller-Maersk A/S 232,762

Ericsson LM 215,233

Danske Bank A/S 213,928

Telenor ASA 201,865

Atlas Copco AB 197,341

Novo Nordisk is the most valuable company in the Nordic region and among the largest employers


Slide 13

• Likely not to exist as independent company

• Devastating effect on Danish life science

Source: www.novonordiskfonden.dk

Grants paid out by the Novo Nordisk Foundation

Large pharma M&A since 2000 – Novo Nordisk could have been a target if not for foundation

Foundation ownership has contributed to Danish life sciences and helped Novo Nordisk to remain independent

Source: Bloomberg


2010 2014

mDKK

201320122011

Thematic grants

Humanitarian and social causes

Open competition grants YearAcquirer/

resultant companyTarget/Merging

companiesDeal type

Total value (bUSD)

2004 Sanofi Aventis Acquisition 73.5

2000 GlaxoSmithKlineSmithkline Beecham + Glaxo Wellcome

Merger 72.4

2002 Pfizer Pharmacia Acquisition 64.3

2009 Pfizer Wyeth Acquisition 64.2

2009 Merck & Co. Schering-Plough Acquisition 47.1

2008 Roche Genentech Acquisition 44.0

2014 Actavis Forest Laboratories Acquisition 20.7

2010 Sanofi Genzyme Acquisition 19.6

2006 Bayer Schering AG Acquisition 18.4

2001 Amgen Immunex Acquisition 16.8

Slide 14

Ways in which boards add value Pitfalls related to board work

Boards add value in many ways but should also beware of a number of pitfalls

>> • The board and executive management have different roles which should not be confused with one another

• The board may get a sanitized view of what is truly going on

• The board must be careful not to get too focused on the company alone rather than seeing it in the context of the external world

• The board should beware of not shifting its focus beyond strategy and not focus too much on execution

• Developing strategy and balancing the short and long-term

• Providing oversight and good governance

• Encouraging and challenging management

• Utilising broad experience among board members

• Ensuring timely succession planning and talent development


Slide 15

• Skills needed at board changes

• Topics change

Board succession is a never ending topic

World is changing


Documents

Slide 1 5,05 4,10 3,50 4,72 11,82 Dr Göran Ando Chairman of Novo Nordisk A/S Mexico City – part of Cities Changing Diabetes Public Boards Perspective