Novo Nordisk's chairman quits amid Foundation row
Novo Nordisk's chairman Helge Lund (inset) and nominated replacement Lars Rebien Sørensen.
Novo Nordisk's chairman Helge Lund and several other independent board members have indicated they will step down next month, amid criticism from the company's controlling shareholder.
The mass resignations follow pressure from the Novo Nordisk Foundation to accelerate a shake-up at the company, which saw massive growth on the back of its GLP-1 drugs for diabetes and weight loss in recent years but has latterly been hit by competition.
While obesity drugs continue to be a hot market, Novo Nordisk has struggled to maintain its leadership in that market, facing growing competition from Eli Lilly, as well as from questionably legal drug compounders and grey market providers.
It is understood that the Novo Nordisk Foundation has been unhappy with the pace of a turnaround plan at the company, which was briefly the largest company in Europe last year before a decline in its fortunes decimated its share price and claimed the job of former chief executive Lars Fruergaard Jørgensen.
Jørgensen was replaced as CEO by Mike Doustdar in August, also under pressure from the Foundation, which has said it will now propose former CEO Lars Rebien Sørensen to step in for Lund and take on the role of temporary chairman for the next two or three years.
"Following dialogue with the Novo Nordisk Foundation regarding the future composition of the board of directors, it has not been possible to reach a common understanding," said Lund in a statement today.
"After thorough deliberation and considering the Foundation's position and control of the majority of votes in Novo Nordisk, the board concluded that it is in the best interest of the company and its shareholders to convene an Extraordinary General Meeting to elect new board members to provide clarity on the future governance of Novo Nordisk," he added.
Along with Lund, independent board members Laurence Debroux, Andreas Fibig, Sylvie Grégoire, Christina Law, and Martin Mackay have said they will not stand for re-election at the EGM, which has been scheduled for Friday, 14th November.
The Foundation said it would put forward five new members for consideration, namely Sørensen and Cees de Jong, Britt Meelby Jensen, Mikael Dolsten, and Stephan Engels, with two others due to be nominated next year.
Novo Nordisk's share price, which has lost more than 40% of its value since the start of the year, continued to weaken after the announcements and was down around 1.6% at the time of writing.
New CEO Doustdar has already implemented a restructuring of the business, including thousands of job cuts, but the word is that the Foundation is looking for further changes and wants to have more input on future strategy.
In a statement, Sørensen said the Foundation "fully supports" Doustdar and the transformation plan but thinks it is "time to bring in new competencies and perspectives" to lend support in executing on the strategy.
"Given the fast-moving environment in which Novo Nordisk operates, we believe that it is in the best interest of the company and its shareholders to implement a board renewal as soon as possible, rather than wait until the ordinary annual general meeting in March next year," he added.
