Recommendations on Foundation Governance, Corporate Governance and Transparency

Our ambition is to be at the forefront of the foundation community within these parameters. We consider at least once a year whether we are transparent enough and comply with the recommendations for both Foundation Governance and good Corporate Governance.

RECOMMENDATIONS ON FOUNDATION GOVERNANCE
The Lundbeck Foundation uses the Recommendations on Foundation Governance of the Committee on Foundation Governance (www.godfondsledelse.dk) as a benchmark.
(Statutory report cf. section 77a of the Financial Statements Act)

Foundation Governance

2023

Recommendations

The Lundbeck Foundation

1.1	It is recommended that the board of directors adopt principles for external communication that address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation

We comply

The Board has defined an external communication policy, which sets out who can make public statements on behalf of the Foundation and on what matters.

The CEO defines the general framework and goals for communication and make statements on behalf of the Foundation. This responsibility may be delegated to the Senior Vice President, Corporate Affairs, or relevant members of the Management Team. All media enquiries to the Board are referred to the Chair, who speaks on behalf of the Board.

2.1.1

It is recommended

that, in order to secure the activities of the commercial foundation in accordance with the purposes and interests of the foundation, the board of directors should, at least once a year, take a position on the overall strategy and distribution policy of the foundation on the basis of the articles of association.

We comply

At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of the Foundation.

2.1.2

It is recommended

that the board of directors regularly address whether the foundation's asset management is in line with the purpose of the foundation and its long- and short-term needs.

We comply

Although the Board of Directors maintains overall responsibility for the Foundation’s investments, the Board has established an Investment Committee which is formed by four members of the Board.

The committee meets regularly and are responsible for preparing decisions and recommendations for consideration and approval by the Board of Directors, and for ensuring that the Board of Directors is informed of all material matters. The supervising of the Foundation’s investment activities is delegated to the Investment Committee in accordance with the investment policy. In addition, the Investment Committee approves investments within the terms of the policy and guides the Foundation’s management on day-to-day investments.

Once a year the Board review and approve the Foundation’s investment policy to ensure that the asset management is in line with the purpose of the Foundation and its long- and short-term needs.

2.2.1

It is recommended

that the chairman of the board of directors organize, convene and chair meetings of the board of directors in order to ensure effective board work and to establish the best conditions for the work of the board members, individually and collectively.

We comply

The Chair plans all board meetings in close collaboration with the CEO. It is the Chair’s responsibility to convene, organise and chair board meetings.

2.2.2

It is recommended

that if the board of directors, in exceptional cases, asks the chairman of the board of directors to perform special activities for the commercial foundation which extend beyond the duties of chairman, a board resolution to that effect be passed to ensure that the board of directors maintains its independent, general management and control function. Appropriate allocation of responsibilities should be ensured between the chairman, the vice-chairman, the other members of the board of directors and the executive board, if any.

We comply

The Chair is responsible for organising the Foundation’s board work.

If, in exceptional circumstances, the Chair is requested to perform specific operating functions, the Board expects this to take place because of a board decision, which specifically ensures appropriate allocation of responsibilities between the Chair and the other members of the Board and Management.

2.3.1

It is recommended

that the board of directors regularly, and at least every second year, assess and stipulate the competences that the board of directors needs to possess in order to best perform the tasks in-cumbent upon the board of directors.

We comply

The Board regularly and at least every second year assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

It is recommended

that with due respect of any right in the articles of association to make appointments, the board of directors approves a structured, thorough and transparent process for selection and nomination of candidates for the board of directors.

We comply

The Board is a self-perpetuating entity that selects and supplements members in accordance with the statutes. The Chair and Deputy Chair typically nominate new members for the Board. In circumstances in which specific research skills are required, nomination takes place in collaboration with the Chair of the Foundation’s Research and Prize Committee. External advisors are usually called in to assist with the nomination and selection process.

2.3.3

It is recommended

that members of the board of directors are appointed on the basis of their personal qualities and competences, taking into account the collective competences of the board, and that when composing and nominating new members to the board, the need for introducing new talent is weighed against the need for continuity and the need for diversity in relation to, inter alia, commercial and grants experience, age and gender.

We comply

The Board is composed such that the combined knowledge and experience of its members ensures the fulfilment of the Foundation’s objectives, as specified in the statutes.

2.3.4

It is recommended

that in the management commentary in the annual report and on the commercial foundation's website, if any, there is an account of the composition of the board of directors, including its diversity, and that the following information is provided on each board member:

the name and position of the member,
the age and gender of the member,
date of original appointment to the board, whether the member has been re-elected, and expiry of the current election period,
any special competences possessed by the member,
other managerial positions held by the member, including positions on executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises and institutions, as well as other demanding organisation tasks,
whether the member owns shares, options, warrants and similar in the foundation's subsidiaries and/or associated companies,
whether the member has been appointed by authorities/providers of grants etc., and
whether the member is considered independent.

We comply

An overview of the composition of the Board of Directors is presented in the Management Report 2023 and on the Foundation’s website.

No authority or similar body appoints members to the Board.

An overview on the shares in the Foundation’s subsidiaries owned by the members of the Board of the Foundation is presented in the Management Report 2023.

2.3.5

It is recommended

that the majority of the members of the board of directors of the commercial foundation are not also members of the board of directors or executive board of the foundation's subsidiary(ies), unless it is a fully-owned actual holding company.

We comply

Most of the members of the Foundation’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

The Foundation is represented by two members on the boards of our subsidiaries. One of these members is our CEO, who serves as Deputy Chair on these boards. The other representative is a member of the Foundation’s Board.

Our Chair is not a member of the boards of our subsidiaries.

2.4.1

It is recommended

that an appropriate proportion of the board of directors be independent.

If the board of directors (excluding employee representatives) is composed of:

up to four members, at least one member should be independent,
between five and eight members, at least two members should be independent, or
nine to eleven members, at least three members should be independent, and so on.

To be considered independent, this person may not, for example:

be or within the past three years have been member of the executive board or a senior employee in the foundation or an essential subsidiary or associated company to the foundation,
within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,
within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or as-sociated company of the foundation,
be or within the past three years have been employed or partner at the external auditor,
have been a member of the board of directors or executive board of the foundation for more than 12 years,
be a close relative or in another way be very close to persons who are not considered as independent,
be the founder or a significant do-nor if the purpose of the foundation is to grant support to this per-son’s family or others who are especially close to this person, or
be a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have received significant donations from the foundation.

We comply

The Board consists of 11 members, of which seven are elected according to the statutes and four are employee-elected representatives appointed by Group employees.

Six of the seven statute-elected board members are considered independent.

According to the Foundation’s Rules of Procedure but respecting the governance rules for active involvement in subsidiaries, no present or former senior employees of either the Foundation or its subsidiaries can become members of the Board of the Foundation. This also applies to present or former members of the Board of Directors of a subsidiary, who cannot become a member of the Board of the Foundation.

2.5.1

It is recommended

that an age limit for members of the board of directors be set, which is published in the management commentary or on the foundation's website.

We explain

According to the statutes, a board member is elected for one year at a time – similar to best practice from listed companies. This allows for regular evaluation of a member’s performance.

No member who has been a member of the Board for more than 12 years can be re-elected.

The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.5.2

It is recommended

that an age limit for members of the board of directors be set, which is published in the management commentary or on the foundation's website.

We comply

Members of the Board who have turned 75 years of age may not be elected or re-elected to the Board. The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.6.1

It is recommended

that the board of directors establish an evaluation procedure in which the board of directors, the chairman and the contributions and performance of individual members are evaluated annually, and the result is discussed by the board of directors.

We comply

The Board performs an annual self-assessment and every second year with external assistance.

2.6.2

It is recommended

that once a year the board of directors evaluate the work and performance of the executive board and/or the administrator (where relevant) in accordance with predefined clear criteria.

We comply

The work and performance of the Management Team is assessed as part of the annual self-assessment of the Board.

3.1.1

It is recommended

that the members of the board of directors of commercial foundations be remunerated with a fixed remuneration and that members of a potential executive board be remunerated with a fixed remuneration, possibly combined with a bonus which should not be dependent upon accounting results. The remuneration should reflect the work and responsibilities consequential to the position.

We explain

Members of the Board and the CEO are remunerated by a fixed fee. The members of the Board’s Research and Prize Committee, Grants and Prizes Panel and Investment Committee also receive additional fixed fees, taking the workload into account.

Moreover, the Board has decided to use a bonus model in the remuneration of the CEO to ensure the alignment between the CEO remuneration and the long-term development of the Foundation, which comprise a very broad range of commercial and philanthropic activities. The CEO bonus is therefore based on several elements: 1) a part of the CEO bonus is based on achievement of objective KPIs relating to the subsidiaries including their financial performance. This reflects the fact that the CEO has the role as Deputy Chair in the Foundation’s three subsidiaries, which constitute the majority of the Foundation’s asset base and therefore is critical for the Foundation’s financial flexibility and ability to deliver on its purpose, 2) another part of the CEO bonus is driven by the result of the Foundation’s financial investment activities, which is critical to safeguard the Foundation’s level of grant activities and thereby its ability to honour its commitments to external parties including universities, scientists etc. and 3) a final part of the bonus is discretionary and based on the Board’s general evaluation of the CEO in the execution of the Foundation’s strategy, which sets the long-term direction for the delivery of the Foundation’s purpose and the general development toward 2030.

Appointed members of the boards of our subsidiaries also receive an ordinary fee set by the subsidiaries.

3.1.2

It is recommended

that the financial statements provide information about the full remuneration received by each member of the board of directors and any executive board from the commercial foundation and from the foundation's subsidiaries and associated companies. Furthermore there should be information on any other remuneration which members of the board of directors and an executive board, if any, have received for performing other work or tasks for the foundation, the foundation's subsidiaries or associated companies, except for the remuneration of employee representatives as employees.

We comply

Information on the total sum paid in remuneration to each member of the Board and the CEO is specified in the Foundation’s Annual report 2023 and on the Foundation’s website.

2022

Recommendations

Lundbeckfonden

1.1	It is recommended that the board of directors adopt principles for external communication that address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

We comply

The Board has defined an external communication policy, which sets out who can make public statements on behalf of the Foundation and on what matters.

2.1.1

We comply

At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of the Foundation.

2.1.2

It is recommended

that the board of directors regularly address whether the foundation's asset management is in line with the purpose of the foundation and its long- and short-term needs.

We comply

Although the Board of Directors maintains overall responsibility for the Foundation’s investments, the Board has established an Investment Committee which is formed by four members of the Board.

Once a year the Board review and approve the Foundation’s investment policy to ensure that the asset management is in line with the purpose of the Foundation and its long- and short-term needs.

2.2.1

It is recommended

We comply

The Chair plans all board meetings in close collaboration with the CEO. It is the Chair’s responsibility to convene, organise and chair board meetings.

2.2.2

It is recommended

We comply

The Chair is responsible for organising the Foundation’s board work.

2.3.1

It is recommended

We comply

The Board regularly and at least every second year assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

It is recommended

We comply

2.3.3

We comply

The Board is composed such that the combined knowledge and experience of its members ensures the fulfilment of the Foundation’s objectives, as specified in the statutes.

2.3.4

It is recommended

that in the management commentary in the annual report and on the commercial foundation's website, if any, there is an account of the composition of the board of directors, including its diversity, and that the following information is provided on each board member:

the name and position of the member,
the age and gender of the member,
date of original appointment to the board, whether the member has been re-elected, and expiry of the current election period,
any special competences possessed by the member,
other managerial positions held by the member, including positions on executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises and institutions, as well as other demanding organisation tasks,
whether the member owns shares, options, warrants and similar in the foundation's subsidiaries and/or associated companies,
whether the member has been appointed by authorities/providers of grants etc., and
whether the member is considered independent.

We comply

An overview of the composition of the Board of Directors is presented in the Management Report 2022 and on the Foundation’s website.

No authority or similar body appoints members to the Board.

An overview on the shares in the Foundation’s subsidiaries owned by the members of the Board of the Foundation is presented in the Management Report 2022.

2.3.5

We comply

Most of the members of the Foundation’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

Our Chair is not a member of the boards of our subsidiaries.

2.4.1

It is recommended

that members of the board of directors be appointed for a minimum period of two years and a maximum period of four years.

up to four members, at least one member should be independent, between five and eight members, at least two members should be independent, or

To be considered independent, this person may not, for example:
be or within the past three years have been member of the executive board or a senior employee in the foundation or an essential subsidiary or associated company to the foundation,
within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,
within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or as-sociated company of the foundation,
be or within the past three years have been employed or partner at the external auditor,
have been a member of the board of directors or executive board of the foundation for more than 12 years,
be a close relative or in another way be very close to persons who are not considered as independent,
be the founder or a significant do-nor if the purpose of the foundation is to grant support to this per-son’s family or others who are especially close to this person, or
be a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have received significant donations from the foundation.
nine to eleven members, at least three members should be independent, and so on.

We comply

The Board consists of 11 members, of which seven are elected according to the statues and four are employee-elected representatives appointed by Group employees.

The seven statute-elected board members are considered independent.

2.5.1

It is recommended

that members of the board of directors be appointed for a minimum period of two years and a maximum period of four years.

We explain

The Foundation has chosen a shorter election period. According to the statutes, a board member is elected for one year at a time – adopting best practice from listed companies. This allows for regular evaluation of a member’s performance.

No member who has been a member of the Board for more than 12 years can be re-elected.

The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.5.2

It is recommended

that an age limit for members of the board of directors be set, which is published in the management commentary or on the foundation's website.

2.6.1

It is recommended

We comply

The Board performs an annual self-assessment and every second year with external assistance.

2.6.2

It is recommended

that once a year the board of directors evaluate the work and performance of the executive board and/or the administrator (where relevant) in accordance with predefined clear criteria.

We comply

The work and performance of the Management Team is assessed as part of the annual self-assessment of the Board

3.1.1

It is recommended

We explain

Members of the Board and the CEO are remunerated by a fixed fee. The members of the Board’s Research and Prize Committee, Grants and Prizes Panel and Investment Committee also receive additional fixed fees, taking the workload into account.

Foundation’s asset base and therefore is critical for the Foundation’s financial flexibility and ability to deliver on its purpose, 2) another part of the CEO bonus is driven by the result of the Foundation’s financial investment activities, which is critical to safeguard the Foundation’s level of grant activities and thereby its ability to honour its commitments to external parties including universities, scientists etc. and 3) a final part of the bonus is discretionary and based on the Board’s general evaluation of the CEO in the execution of the Foundation’s strategy, which sets the long-term direction for the delivery of the Foundation’s purpose and the general development toward 2030.

Appointed members of the boards of our subsidiaries also receive an ordinary fee set by the subsidiaries.

3.1.2

It is recommended

We comply

Information on the total sum paid in remuneration to each member of the Board and the CEO is specified in the Foundation’s Annual report 2022 and on the Foundation’s website.

2021

Recommendations

Lundbeckfonden

1.1	It is recommended that the board of directors adopt principles for external communication that address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

We comply

The Board has defined an external communication policy, which sets out who can make public statements on behalf of Lundbeckfonden and on what matters.
The CEO defines the general framework and goals for communication and make statements on behalf of the Foundation. This responsibility may be delegated to the Senior Vice President, Corporate Affairs, or relevant members of the management team. All media enquiries to the Board are referred to the Chairman, who speaks on behalf of the Board.

2.1.1

It is recommended

that, in order to secure the activities of the enterprise foundation in accordance with the purposes and interests of the foundation, the board of directors should, at least once a year, take a position on the overall strategy and distribution policy of the foundation on the basis of the articles of association.

We comply

At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of Lundbeckfonden.

2.1.2

It is recommended

that the board of directors regularly address whether the foundation's asset management is in line with the purpose of the foundation and its long- and short-term needs.

We comply

Although the Board of Directors maintains overall responsibility for the Foundation’s investments, the Board has established an Investment Committee which is formed by four members of the Board.
The committee meets regularly and are responsible for preparing decisions and recommendations for consideration and approval by the Board of Directors, and for ensuring that the Board of Directors is informed of all material matters. The supervising of the Foundation’s investment activities is delegated to the Investment Committee in accordance with the investment policy. In addition, the Investment Committee guides the Foundation’s management on day-to-day investments.
Once a year the Board review and approve the Foundation’s Investment Policy to ensure that the asset management is in line with the purpose of the Foundation and its long- and short-term needs.

2.2.1

It is recommended

We comply

The Chairman plans all board meetings in close collaboration with the CEO. It is the Chairman’s responsibility to convene, organise and chair board meetings.

2.2.2

It is recommended

that if the board of directors, in exceptional cases, asks the chairman of the board of directors to perform special activities for the enterprise foundation which extend beyond the duties of chairman, a board resolution to that effect be passed to ensure that the board of directors maintains its independent, general management and control function. Appropriate allocation of responsibilities should be ensured between the chairman, the vice-chairman, the other members of the board of directors and the executive board, if any.

We comply

The Chairman is responsible for organising Lundbeckfonden’s board work.

If, in exceptional circumstances, the Chairman is requested to perform specific operating functions, the Board expects this to take place because of a board decision, which specifically ensures appropriate allocation of responsibilities between the Chairman and the other members of the Board and management.

2.3.1

It is recommended

We comply

The Board regularly and at least every second year assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

It is recommended

We comply

The Board is a self-perpetuating entity that selects and supplements members in accordance with the statutes. The Chairman and Deputy Chairman typically nominate new members for the Board. In circumstances in which specific research skills are required, nomination takes place in collaboration with the Chairman of the Foundation’s Research and Prize committee. External advisors are usually called in to assist with the selection process.

2.3.3

It is recommended

that members of the board of directors are appointed on the basis of their personal qualities and competences, taking into account the collective competences of the board, and that when composing and nominating new members to the board, the need for introducing new talent is weighed against the need for continuity and the need for diversity in relation to, inter alia, enterprise and grants experience, age and gender.

We comply

The Board is composed such that the combined knowledge and experience of its members ensures the fulfilment of Lundbeckfonden’s objectives, as specified in the statutes.

2.3.4

It is recommended

that in the management commentary in the annual report and on the enterprise foundation's website, if any, there is an account of the composition of the board of directors, including its diversity, and that the following information is provided on each board member:

the name and position of the member,
the age and gender of the member,
date of original appointment to the board, whether the member has been re-elected, and expiry of the current election period,
any special competences possessed by the member,
other managerial positions held by the member, including positions on executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises, and institutions, as well as other demanding organisation tasks,
whether the member owns shares, options, warrants and similar in the foundation's subsidiaries and/or associated companies,
whether the member has been appointed by authorities/providers of grants etc., and
whether the member is considered independent.

We comply

An overview of the composition of the Board of Directors is presented in the Management Report 2021 and on Lundbeckfonden’s website.

No authority or similar body appoints members to the Board.

An overview on the shares in the Foundation’s subsidiaries and associated companies owned by the members of the Board of the Foundation are presented in the Management Report 2021 and on Lundbeckfonden’s website.

2.3.5

It is recommended

that the majority of the members of the board of directors of the enterprise foundation are not also members of the board of directors or executive board of the foundation's subsidiary(ies), unless it is a fully-owned actual holding company.

We comply

Most of the members of Lundbeckfonden’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

The Foundation is represented by two members on the boards of our subsidiaries. One of these members is our CEO, who serves as Deputy Chairman on these boards. The other representative is a member of the Foundation’s Board.

Our Chairman is not a member of the boards of our subsidiaries.

2.4.1

It is recommended

that an appropriate proportion of the board of directors be independent.

If the board of directors (excluding employee representatives) is composed of:

up to four members, at least one member should be independent,
between five and eight members, at least two members should be independent, or
nine to eleven members, at least three members should be independent, and so on.

To be considered independent, this person may not, for example:

be or within the past three years have been member of the executive board or a senior employee in the foundation or an essential subsidiary or associated company to the foundation,
within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,
within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or associated company of the foundation,
be or within the past three years have been employed or partner at the external auditor,
have been a member of the board of directors or executive board of the foundation for more than 12 years,
be a close relative or in another way be very close to persons who are not considered as independent,
be the founder or a significant donor if the purpose of the foundation is to grant support to this person's family or others who are especially close to this person, or
be a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have received significant donations from the foundation.

We comply

The Board consists of 11 members, of which seven are elected according to the statues and four are employee-elected representatives appointed by Group employees.

The seven statute-elected board members are considered independent.

According to the Foundation’s Rules of Procedure but respecting the governance rules for active involvement in subsidiaries, no present or former senior employees of either the Foundation or its subsidiaries can become members of the Board of the Foundation. This also applies to present or former members of the Board of Directors of a subsidiary, who cannot become a member of the Board of the Foundation.

2.5.1

It is recommended

that members of the board of directors be appointed for a minimum period of two years and a maximum period of four years.

We explain

Lundbeckfonden has chosen a shorter election period. According to the statutes, a board member is elected for one year at a time – adopting best practice from listed companies. This allows for regular evaluation of a member’s performance.

No member who has been a member of the Board for more than 12 years can be re-elected.

The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.5.2

It is recommended

that an age limit for members of the board of directors be set, which is published in the management commentary or on the foundation's website.

We comply

Members of the Board who have turned 75 years of age may not be elected or re-elected to the Board. The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.6.1

It is recommended

that the board of directors establishes an evaluation procedure in which the board of directors, the chairman, and the contributions and performance of individual members are evaluated annually, and the result is discussed by the board of directors.

We comply

The Board performs an annual self-assessment and every second year with external help.

2.6.2

It is recommended

that once a year the board of directors evaluate the work and performance of the executive board and/or the administrator (where relevant) in accordance with predefined clear criteria.

We comply

The work and performance of the management team is assessed as part of the annual self-assessment of the Board.

3.1.1

It is recommended

that the members of the board of directors of enterprise foundations be remunerated with a fixed remuneration and that members of a potential executive board be remunerated with a fixed remuneration, possibly combined with a bonus which should not be dependent upon accounting results. The remuneration should reflect the work and responsibilities consequential to the position.

We comply

Members of the Board and the CEO are remunerated by a fixed fee. The members of the Board’s two committees also receive an additional fee, which is defined as a fixed share of the base fee taking the additional workload into account.

Moreover, the Board has decided to use a bonus model in the remuneration of the CEO to ensure the alignment between the CEO remuneration and the long-term development of the Foundation, which comprise a very broad range of enterprise and philanthropic activities. The CEO bonus is therefore based on several elements: 1) a part of the CEO bonus is based on achievement of objective KPIs relating to the subsidiaries including their financial performance. This reflects the fact that the CEO has the role as deputy chairman in the Foundation’s three subsidiaries, which constitute the majority of the Foundation’s asset base and therefore is critical for the Foundation’s financial flexibility and ability to deliver on its purpose, 2) another part of the CEO bonus is driven by the result of the Foundation’s financial investment activities, which is critical to safeguard the Foundation’s level of grant activities and thereby its ability to honour its commitments to external parties including universities, scientists etc. and 3) a final part of the bonus is discretionary and based on the Board’s general evaluation of the CEO in the execution of the Foundation’s strategy, which sets the long-term direction for the delivery of the Foundation’s purpose and the general development toward 2030.

Members of our research and investment committees – as well as the board members of our subsidiaries – receive an additional fee which has been set as a fixed share of the base fee taking the workloads into account.

3.1.2

It is recommended

that the financial statements provide information about the full remuneration received by each member of the board of directors and any executive board from the enterprise foundation and from the foundation's subsidiaries and associated companies. Furthermore there should be infor-mation on any other remuneration which members of the board of directors and an executive board, if any, have received for performing other work or tasks for the foundation, the foundation's subsidiaries or associated companies, except for the remuneration of employee representatives as employees.

We comply

Information on the total sum paid in remuneration to each member of the Board and the CEO is specified in Lundbeckfonden’s Annual Report 2021 and on Lundbeckfonden’s webs

2020

Recommendations

Lundbeckfonden

1.1	It is recommended that the board of directors adopts principles for external communication that address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

We comply

The Board has defined an external communication policy, which sets out who can make public statements on behalf of Lundbeckfonden and on what matters.

The CEO defines the general framework and goals for communication and makes statements on behalf of the Foundation. This responsibility may be delegated to the Senior Vice President, Corporate Affairs or relevant members of the management team. All media enquiries to the Board are referred to the Chairman, who speaks on behalf of the Board.

2.1.1

It is recommended

We comply

At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of Lundbeckfonden.

2.1.2

It is recommended

that the board of directors regularly address whether the foundation's asset management is in line with the purpose of the foundation and its long- and short-term needs.

We comply

Although the Board of Directors maintains overall responsibility for the Foundation’s investments, the Board has established an Investment Committee which is formed by four members of the Board.

The committee meets regularly and is responsible for preparing decisions and recommendations for consideration and approval by the Board of Directors, and for ensuring that the Board of Directors is informed of all material matters. The supervising of the Foundation’s investment activities is delegated to the Investment Committee in accordance with the investment policy. In addition, the Investment Committee guides the Foundation’s management on day-to-day investments.

2.2.1

It is recommended

that the chairman of the board of directors organize, convene, and chair meetings of the board of directors in order to ensure effective board work and to establish the best conditions for the work of the board members, individually and collectively.

We comply

The Chairman plans all board meetings in close collaboration with the CEO. It is the Chairman’s responsibility to convene, organise and chair board meetings.

2.2.2

It is recommended

We comply

The Chairman is responsible for organising Lundbeckfonden’s board work.

If, in exceptional circumstances, the Chairman is requested to perform specific operating functions, the Board expects this to take place because of a board decision, which specifically ensures appropriate allocation of
responsibilities between the Chairman and the other members of the Board and management.

2.3.1

It is recommended

We comply

The Board regularly and at least every second year assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

It is recommended

We comply

2.3.3

It is recommended

We comply

The Board is composed such that the combined knowledge and experience of its members ensures the fulfillment of Lundbeckfonden’s objectives, as specified in the statutes.

2.3.4

It is recommended

the name and position of the member,
the age and gender of the member,
date of original appointment to the board, whether the member has been re-elected, and expiry of the current election period,
any special competences possessed by the member,
other managerial positions held by the member, including positions on executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises, and institutions, as well as other demanding organisation tasks,
whether the member owns shares, options, warrants and similar in the foundation's subsidiaries and/or associated companies,
whether the member has been appointed by authorities/providers of grants etc., and
whether the member is considered independent.

We comply

An overview of the composition of the Board of Directors is presented in the Management Report 2020 and on Lundbeckfonden’s website.

No authority or similar body appoints members to the Board.

2.3.5

It is recommended

We comply

The majority of the members of Lundbeckfonden’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

The Foundation is represented by two members on the boards of our subsidiaries. One of these members is our CEO, who serves as Deputy Chairman on these boards. The other representative is a member of the Foundation’s Board.

2.4.1

It is recommended

that an appropriate proportion of the board of directors be independent.

If the board of directors (excluding employee representatives) is composed of:

up to four members, at least one member should be independent,
between five and eight members, at least two members should be independent, or
nine to eleven members, at least three members should be independent, and so on.

To be considered independent, this person may not, for example:

be or within the past three years have been member of the executive board or a senior employee in the foundation or an essential subsidiary or associated company to the foundation,
within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,
within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or associated company of the foundation,
be or within the past three years have been employed or partner at the external auditor,
have been a member of the board of directors or executive board of the foundation for more than 12 years,
be a close relative or in another way be very close to persons who are not considered as independent,
be the founder or a significant donor if the purpose of the foundation is to grant support to this person's family or others who are especially close to this person, or
be a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have received significant donations from the foundation.

We comply

The Board consists of 11 members, of which seven are elected according to the statutes and four are employee-elected representatives appointed by Group employees.

The seven statute-elected board members are considered independent.

According to the Foundation’s Rules of Procedure, but respecting the governance rules for active involvement in subsidiaries, no present or former senior employees of either the Foundation or its subsidiaries can become members of the Board of the Foundation. This also applies to present or former members of the Board of Directors of a subsidiary, who cannot become a member of the Board of the Foundation.

2.5.1

It is recommended

that members of the board of directors be appointed for a minimum period of two years and a maximum period of four years.

We explain

No member who has been a member of the Board for more than 12 years can be re-elected.

The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.5.2

It is recommended

that an age limit for members of the board of directors be set, which is published in the management commentary or on the foundation's website.

We comply

2.6.1

It is recommended

We comply

The Board performs an annual self-assessment and every second year with external help.

2.6.2

It is recommended

that once a year the board of directors evaluate the work and performance of the executive board and/or the administrator (where relevant) in accordance with predefined clear criteria.

We comply

The work and performance of the management team is assessed as part of the annual self-assessment of the Board.

3.1.1

It is recommended

We comply

Members of the Board and the CEO are remunerated by a fixed fee. This fee does not depend on the financial results of the subsidiaries nor on our other investment activities. In addition, the CEO has a bonus potential which is not dependent on the financial result of the Foundation, nor on the financial results of the subsidiaries. The bonus is partly dependent on the results from the Foundation’s financial investment activities, which ensure the financial flexibility required to safeguard the level of grant activities.

Members of our research and investment committees – as well as the board members of our subsidiaries – receive an additional fee which has been set as a fixed share of the base fee taking the workloads into account.

3.1.2

It is recommended

that the financial statements provide information about the full remuneration received by each member of the board of directors and any executive board from the enterprise foundation and from the foundation's subsidiaries and associated companies. Furthermore, there should be information on any other remuneration which members of the board of directors and an executive board, if any, have received for performing other work or tasks for the foundation, the foundation's subsidiaries, or associated companies, except for the remuneration of employee representatives as employees.

We comply

Information on the total sum paid in remuneration to each member of the Board and the CEO is specified in Lundbeckfonden’s Annual Report 2020 and on Lundbeckfonden’s website.

2019

Recommendations

Lundbeckfonden

1.1

It is recommended
that the board of directors adopt guidelines for external communication, including who can make public statements on behalf of the foundation and on what matters. The guidelines should address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

We comply
The Board has defined an external communication policy, which sets out who can make public statements on behalf of Lundbeckfonden and on what matters.

The CEO defines the general framework and goals for communication and make statements on behalf of the Foundation. This responsibility may be delegated to the Senior Vice President, Communications or relevant members of the management team. All media enquiries to the Board are referred to the Chairman, who speaks on behalf of the Board.

2.1.1

It is recommended
that, to secure the activities of the commercial foundation in accordance with the purposes and interests of the foundation, at least once a year the board of directors take a position on the overall strategy and distribution policy of the foundation based on the articles of association.

We comply
At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of Lundbeckfonden.

2.2.1

It is recommended
that the chairman of the board of directors organise, convene and chair meetings of the board of directors to ensure effective board work and to establish the best conditions for the work of the board members individually and collectively.

We comply
The Chairman plans all board meetings in close collaboration with the CEO. It is the Chairman’s responsibility to convene, organise and chair board meetings.

2.2.2

It is recommended
that if, in addition to the position as chairman, in exceptional circumstances, the chairman of the board of directors is requested to perform specific operating functions for the commercial foundation, a board resolution be passed which ensures that the board of directors retains its independent, overall management and control function. Appropriate allocation of responsibilities should be ensured between the chairman, the vice-chairman, the other members of the board of directors and the executive board, if any.

We comply
The Chairman is responsible for organising Lundbeckfonden’s board work.

If, in exceptional circumstances, the Chairman is requested to perform specific operating functions, the Board expects this to take place because of a board decision, which specifically ensures appropriate allocation of  responsibilities between the Chairman and the other members of the Board and management.

2.3.1

It is recommended
that the board of directors regularly assess and stipulate the competences that the board of directors is to possess to perform the tasks incumbent upon the board of directors as well as possible.

We comply
The Board regularly assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

It is recommended
that, with due respect of any right in the articles of association to make appointments, the board of directors ensures a structured, thorough and transparent process for selection and nomination of candidates for the board of directors.

We comply
The Board is a self-perpetuating entity that selects and supplements members in accordance with the statutes. The Chairman and Deputy Chairman typically nominate new members for the Board. In circumstances in which specific research skills are required, nomination takes place in collaboration with the Chairman of the Foundation’s Research and Prize committee. External advisors are usually called in to assist with the selection process.

2.3.3

It is recommended
that members of the board of directors are appointed based on their personal qualities and competences considering the collective competences of the board and when composing and nominating new members of the board the need for introducing new talent is weighed against the need for continuity and the need for diversity is considered in relation to commercial and grants experience, age and gender.

We comply
The Board is composed such that the combined knowledge and experience of its members ensures the fulfilment of Lundbeckfonden’s objectives, as specified in the statutes.

2.3.4

It is recommended
that in the management review in the annual report and on the commercial foundation's website, there is an account of the composition of the board of directors, including its diversity, and that the following information is provided on each board member:

the name and position of the member,

the age and gender of the member,

date of original appointment to the board whether the member has been re-elected, and expiry of the current election period,

any special competences possessed by the member,

other managerial positions held by the member, including positions on  executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises and institutions, as well as other demanding organisation tasks,

whether the member has been appointed by authorities/providers of grants etc., and

whether the member is considered independent.

We comply
An overview of the composition of the Board of Directors is presented in the Management Report 2019 and on Lundbeckfonden’s website.

No authority or similar body has the power to appoint members to the Board.

2.3.5

It is recommended
that the majority of the members of the board of directors of the commercial foundation are not also members of the board of directors or executive board of the foundation's subsidiary(ies), unless it is a fully owned actual holding company.

We comply
The majority of the members of Lundbeckfonden’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

The Foundation is represented by two members on the boards of our subsidiaries. One of these members is our CEO, who serves as Deputy Chairman on these boards. The other representative is a member of the Foundation’s Board.

Our Chairman is not a member of the boards of our subsidiaries.

2.4.1

It is recommended
that an appropriate proportion of the board of directors be independent. If the board of directors (excluding employee representatives) is composed of up to four members, at least one member should be independent. If the board of directors is composed of between five and eight members, at least two members should be independent. If the board of directors is composed of nine to eleven members, at least three members should be independent, and so on.

To be considered independent, this person may not:

be or within the past three years have been member of the executive board, or senior employee in the foundation, or a subsidiary or associated company to the foundation,

within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,

within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or associated company of the foundation,

be or within the past three years have been employed or partner at the  external auditor,

have been a member of the board of directors or executive board of the foundation for more than 12 years,

have close relatives with persons who are not considered as independent,

is the founder or a significant donor if the purpose of the foundation is to grant support to this person's family or others who are especially close to this person, or

a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have  received significant donations from the foundation.

We comply
The Board consists of 11 members, of which seven are elected according to the statues and four are employee-elected representatives appointed by Group employees.

Six of the seven statute-elected board members are considered independent – as one board member received a research grant from the Foundation in 2015 before being elected to the Board.

According to the Foundation’s Rules of Procedure, but respecting our governance for active involvement in subsidiaries, no present or former senior employees of either the Foundation or its subsidiaries can become members of the Board of the Foundation or the Board of Directors of the subsidiaries. This also applies to present or former members of the Board of Directors of a subsidiary who cannot become a member of the Board of the Foundation.

2.5.1

It is recommended
that members of the board of directors be appointed for a minimum  period of two years and a maximum period of four years.

We explain
Lundbeckfonden has chosen a shorter election period. According to the statutes, a board member is elected for one year at a time – adopting best practice from listed companies. This allows for regular evaluation of a member’s performance.

No member who has been a member of the Board for more than 12 years can be re-elected.

The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.5.2

It is recommended
that an age limit for members of the board of directors be set, which is published in the management review or on the foundation's website.

We comply
Members of the Board who have turned 75 years of age may not be elected or re-elected to the Board. The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.6.1

It is recommended
that the board of directors establish an evaluation procedure in which the board of directors, the chairman and the contributions and performance of individual members are evaluated annually and the result is discussed by the board of directors.

We comply
The Board performs an annual self-assessment.

2.6.2

It is recommended
that once a year the board of directors evaluate the work and performance of the executive board and/or the administrator (where relevant) in accordance with predefined clear criteria.

We comply
The work and performance of the management team is assessed as part of the annual self-assessment of the Board.

3.1

It is recommended
that the members of the board of directors of commercial foundations be  remunerated with a fixed remuneration and that members of a possible executive board be remunerated with a fixed remuneration, possibly combined with a bonus which should not be dependent upon accounting results. The remuneration should reflect the work and responsibilities consequential to the position.

We comply
Members of the Board and the CEO are remunerated by a fixed fee. This fee does not depend on the financial results of the subsidiaries nor on our other investment activities. In addition, the CEO has a bonus potential which is not dependent on the accounting result of the Foundation.

Members of our research and investment committees – as well as the board members of our subsidiaries – receive an additional fee in proportion to their workload.

3.2

It is recommended
that the annual financial statements provide information about the full  remuneration received by each member of the board of directors and executive board (if relevant) from the commercial foundation and from other  enterprises in the group. Furthermore, there should be information on any other remuneration which members of the board of directors, except for  employee representatives, have received for performing tasks for the foundation, subsidiaries of the foundation or enterprises in the same group as the foundation.

We comply
Information on the total sum paid in remuneration to members of the Board and the CEO is specified in Lundbeckfonden’s Annual Report 2019.

2018

Recommendations

Lundbeckfonden

1.1

It is recommended
that the board of directors adopt guidelines for external communication,  including who can make public statements on behalf of the foundation and on what matters. The guidelines should address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

We comply
The Board has defined an external communication policy, which sets out who can make public statements on behalf of Lundbeckfonden and on what matters.

The CEO defines the general framework and goals for communication and make statements on behalf of the Foundation. This responsibility may be delegated to the Director of Communications or relevant members of the management team. All media enquiries to the Board are referred to the Chairman, who speaks on behalf of the Board.

2.1.1

We comply
At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of Lundbeckfonden.

2.2.1

We comply
The Chairman plans all board meetings in close collaboration with the CEO. It is the Chairman’s responsibility to convene, organise and chair board meetings.

2.2.2

2.3.1

We comply
The Board regularly assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

We comply
The Board is a self-perpetuating entity that selects and supplements members in accordance with the statutes. The Chairman and Vice Chairman typically nominate new members for the Board. In circumstances in which specific research skills are required, nomination takes place in collaboration with the Chairman of the Foundation’s Research and Prize committee. External advisors are usually called in to assist with the selection process.

2.3.3

We comply
The Board is composed such that the combined knowledge and experience of its members ensures the fulfilment of Lundbeckfonden’s objectives, as specified in the statutes.

2.3.4

the name and position of the member,

the age and gender of the member,

date of original appointment to the board whether the member has been re-elected, and expiry of the current election period,

any special competences possessed by the member,

other managerial positions held by the member, including positions on  executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises and institutions, as well as other demanding organisation tasks,

whether the member has been appointed by authorities/providers of grants etc., and

whether the member is considered independent.

We comply
An overview of the composition of the Board of Directors is presented in the Management Report 2018 and on Lundbeckfonden’s website.

No authority or similar body has the power to appoint members to the Board.

2.3.5

It is recommended
that the majority of the members of the board of directors of the commercial foundation are not also members of the board of directors or executive board of the foundation's subsidiary(ies), unless it is a fully owned actual holding company.

We comply
The majority of the members of Lundbeckfonden’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

The Foundation is represented by two members on the boards of our subsidiaries. One of these members is our CEO, who serves as Vice Chairman on these boards. The other representative is a member of the Foundation’s Board.

Our Chairman is not a member of the boards of our subsidiaries.

2.4.1

be or within the past three years have been member of the executive board, or senior employee in the foundation, or a subsidiary or associated company to the foundation,

within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,

within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or associated company of the foundation,

be or within the past three years have been employed or partner at the external auditor,

have been a member of the board of directors or executive board of the foundation for more than 12 years,

have close relatives with persons who are not considered as independent,

is the founder or a significant donor if the purpose of the foundation is to grant support to this person's family or others who are especially close to this person, or

a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have received significant donations from the foundation.

2.5.1

It is recommended
that members of the board of directors be appointed for a minimum period of two years and a maximum period of four years.

2.5.2

It is recommended
that an age limit for members of the board of directors be set, which is published in the management review or on the foundation's website.

We comply
Members of the Board who have turned 75 years of age may not be elected or re-elected to the Board. The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.6.1

We comply
The Board performs an annual self-assessment.

2.6.2

We comply
The work and performance of the management team is assessed as part of the annual self-assessment of the Board.

3.1

It is recommended
that the members of the board of directors of commercial foundations be remunerated with a fixed remuneration and that members of a possible executive board be remunerated with a fixed remuneration, possibly combined with a bonus which should not be dependent upon accounting results. The remuneration should reflect the work and responsibilities consequential to the position.

3.2

It is recommended
that the annual financial statements provide information about the full remuneration received by each member of the board of directors and executive board (if relevant) from the commercial foundation and from other enterprises in the group. Furthermore, there should be information on any other remuneration which members of the board of directors, except for employee representatives, have received for performing tasks for the foundation, subsidiaries of the foundation or enterprises in the same group as the foundation.

We comply
Information on the total sum paid in remuneration to members of the Board and the CEO is specified in Lundbeckfonden’s Annual Report 2018.

2017

Recommendations

Lundbeckfonden

1.1

It is recommended
that the board of directors adopt guidelines for external communication,  including who can make public statements on behalf of the foundation and on what matters. The guidelines should address the need for transparency and stakeholders' needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

We comply
The Board has defined an external communication policy, which sets out who can make public statements on behalf of Lundbeckfonden and on what matters.

The CEO defines the general framework and goals for communication and make statements on behalf of the Foundation. This responsibility may be delegated to the Director of Communications or relevant members of the management team. All media enquiries to the Board are referred to the Chairman, who speaks on behalf of the Board.

2.1.1

We comply
At the annual strategy seminar, the Board takes a position on the overall strategy and grant policy of Lundbeckfonden.

2.2.1

We comply
The Chairman plans all board meetings in close collaboration with the CEO. It is the Chairman’s responsibility to convene, organise and chair board meetings.

2.2.2

2.3.1

We comply
The Board regularly assesses and stipulates the skills required by the Board of Directors to perform the tasks that the Board carries out.

2.3.2

It is recommended
that, with due respect of any right in the articles of association to make  appointments, the board of directors ensures a structured, thorough and transparent process for selection and nomination of candidates for the board of directors.

2.3.3

We comply
The Board is composed such that the combined knowledge and experience of its members ensures the fulfilment of Lundbeckfonden’s objectives, as specified in the statutes.

2.3.5

It is recommended
that the majority of the members of the board of directors of the commercial foundation are not also members of the board of directors or executive board of the foundation's subsidiary(ies), unless it is a fully owned actual holding company.

We comply
The majority of the members of Lundbeckfonden’s Board are not also members of the boards of our subsidiaries, just as the Board is not represented on the executive management teams of the subsidiaries.

The Foundation is represented by two members on the boards of our subsidiaries. One of these members is our CEO, who serves as Vice Chairman on these boards. The other representative is a member of the Foundation’s Board.

Our Chairman is not a member of the boards of our subsidiaries.

2.4.1

be or within the past three years have been member of the executive board, or senior employee in the foundation, or a subsidiary or associated company to the foundation,

within the past five years have received larger emoluments, including distributions or other benefits from the foundation/group or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors or executive board of the foundation,

within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation/group or a subsidiary or associated company of the foundation,

be or within the past three years have been employed or partner at the
external auditor,

have been a member of the board of directors or executive board of the foundation for more than 12 years,

have close relatives with persons who are not considered as independent,

is the founder or a significant donor if the purpose of the foundation is to grant support to this person's family or others who are especially close to this person, or

a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have
received significant donations from the foundation.

We comply
The Board consists of 10 members, of which seven are elected according to the statutes and three are employee-elected representatives appointed by Group employees.

Six of the seven statute-elected board members are considered independent – as one board member received a research grant from the Foundation in 2015 before being elected to the board.

According to our Rules of Procedure, no present or former senior employees of neither the foundation nor of its subsidiaries can become members of Lundbeckfonden’s Board.

2.5.1

It is recommended
that members of the board of directors be appointed for a minimum period of two years and a maximum period of four years.

2.5.2

It is recommended
that an age limit for members of the board of directors be set, which is published in the management review or on the foundation's website.

We comply
Members of the Board who have turned 75 years of age may not be elected or re-elected to the Board. The Board may deviate from this rule if the Board’s competence profile dictates it. The decision to do so is always made by the Board.

2.6.1

We comply
The Board performs an annual self-assessment.

2.6.2

We comply
The work and performance of the management team is assessed as part of the annual self-assessment of the Board.

3.1

We comply
Members of the Board and the CEO are remunerated by a fixed fee. This fee does not depend on the financial results of the subsidiaries nor on our other investment activities.

Members of our research and investment committees – as well as the board members of our subsidiaries – receive an additional fee in proportion to their workload.

3.2

We comply
Information on the total sum paid in remuneration to members of the Board and the CEO is specified in Lundbeckfonden’s Annual Report 2017.

Corporate Governance

2023

Recommendations

The Lundbeck Foundation

1.1.1

It is recommended

that the management through ongoing dialogue and interaction ensures that shareholders, investors, and other stakeholders gain the relevant insights into the company’s affairs, and that the board of directors obtains the possibility of hearing and including their views in its work.

We comply

The Foundation’s Governance Principles and policies can be accessed on the Foundation’s website.

1.1.2

It is recommended

that the company adopts policies on the company’s relationships with its shareholders, investors and if relevant other stakeholders in order to ensure that the various interests are included in the company’s considerations and that such policies are made available on the company’s website.

Not relevant

The Foundation’s Governance Principles and Communication policy can be accessed on the Foundation’s website.

1.1.3

It is recommended

that the company publishes quarterly reports.

Not relevant

The Foundation does not publish quarterly reports since it is not a public company. The Foundation’s large subsidiaries publish quarterly reports.

1.2.1

It is recommended

that the board of directors organises the company’s general meeting in a manner that allows shareholders, who are unable to attend the meeting in person or are represented by a proxy at the general meeting, to vote and raise questions to the management prior to or at the general meeting. The Committee recommends that the board of directors ensures that shareholders can observe the general meeting via webcast or other digital transmissions.

Not relevant

The Foundation is a self-governing and independent institution with no shareholders.

1.2.2

It is recommended

that proxies and postal votes to be used at the general meeting enable the shareholders to consider each individual item on the agenda.

Not relevant

The Foundation is a self-governing and independent institution with no shareholders.

1.3.1

It is recommended

that the company has a procedure in place in the event of takeover bids, containing a “road map” covering matters for the board of directors to consider in the event of a takeover bid, or if the board of directors obtains reasonable grounds to suspect that a takeover bid may be submitted. In addition, it is recommended that it appears from the procedure that the board of directors abstains from countering any takeover bids by taking actions that seek to prevent the shareholders from deciding on the takeover bid, without the approval of the general meeting.

Not relevant

The Foundation is a self-owned institution with no shareholders.

1.4.1

It is recommended

that the board of directors adopts a policy for the company’s corporate social responsibility, including social responsibility and sustainability, and that the policy is available in the management commentary and/or on the company’s website. The Committee recommends that the board of directors ensures compliance with the policy.

We comply

The Foundation’s policy for corporate social responsibility (Sustainability Policy) can be accessed on the Foundation’s website.

1.4.2

It is recommended

that the board of directors adopts a tax policy to be made available on the company’s website.

We comply

The Foundation’s tax policy can be accessed on the Foundation’s website.

2.1.1

It is recommended

that the board of directors in support of the company’s statutory objects according to its articles of association and the long-term value creation considers the company’s purpose and ensures and promotes a good culture and sound values in the company. The company should provide an account thereof in the management commentary and/or on the company’s website.

We comply

The Foundation’s purpose and social priorities are communicated in the annual Sustainability report, furthermore strategy 2030 and the value creation entailed herein is the basis for all internal communication, both available on the Foundation’s website.

2.1.2

It is recommended

that the board of directors at least once a year discusses and on regular basis follow up on the company’s overall strategic targets in order to ensure value creation in the company.

We comply

The Board of Directors has an annual Board strategy seminar.

2.1.3

It is recommended

that the board of directors on a continuous basis takes steps to examine whether the company’s share and capital structure supports the strategy and the long-term value creation in the interest of the company as well as the shareholders. The Committee recommends that the company gives an account thereof in the management commentary.

Not relevant

The Foundation is a self-governing institution with no shareholders.

2.1.4

It is recommended

that the board of directors prepares and on an annual basis reviews the guidelines for the executive management, including requirements in respect of the reporting to the board of directors.

We comply

Once a year the Board of Directors reviews the guidelines for the CEO.

2.2.1

It is recommended

that the board of directors, in addition to a chairperson, appoints a vice chairperson, who can step in if the chairperson is absent and who can generally act as the chairperson’s close sparring partner.

We comply

The Board of Directors has appointed a Chair and a Deputy Chair.

2.2.2

It is recommended

that the chairperson in cooperation with the individual members of the board of directors ensures that the members update and supplement their knowledge of relevant matters, and that the members’ special knowledge and qualifications are applied in the best possible manner.

We comply

The Board performs an annual self-assessment to ensure that the board holds all relevant competencies.

2.2.3

It is recommended

that if the board of directors, in exceptional cases, requests a member of the board of directors to take on special duties for the company, for instance, for a short period to take part in the daily management of the company, the board of directors should approve this in order to ensure that the board of directors maintains its independent overall management and control function. It is recommended that the company publishes any decision on allowing a member of the board of directors to take part in the daily management, including the expected duration thereof.

We comply

If, in exceptional circumstances, a board member is requested to perform specific operating functions, the Board expects this to take place because of a board decision, which specifically ensures appropriate allocation of responsibilities between the board member in question and the other members of the Board and Management.

3.1.1

It is recommended

that the board of directors on an annual basis review and in the management commentary and/or on the company’s website states:

Which qualifications the board of directors should possess, collectively and individually, in order to perform its duties in the best possible manner.
The composition of and diversity on the board of directors.

We comply

An overview of the composition of the Board of Directors is presented in the Management Report 2023 and on the Foundation’s website.

An overview on the shares in the Foundation’s subsidiaries owned by the members of the Board of the Foundation is presented in the Management Report 2023.

3.1.2

It is recommended

that the board of directors on an annual basis discusses the company’s activities in order to ensure relevant diversity at the different management levels of the company and adopts a diversity policy, which is included in the management commentary and/or available on the company’s website.

We explain

The Foundation has not formulated a concrete diversity policy, but principles and priorities are stated in the Sustainability Policy, which is available on the Foundation’s website.

3.1.3

It is recommended

that candidates for the board of directors are recruited based on a thorough process approved by the board of directors. The Committee recommends that in assessing candidates for the board of directors – in addition to individual competencies and qualifications – the need for continuity, renewal, and diversity is also considered.

We comply

The Board is a self-perpetuating entity that selects and supplements members in accordance with its statutes. The Chair and Deputy Chair typically nominate new members for the Board. In circumstances in which specific research skills are required, nomination takes place in collaboration with the Chair of the Foundation’s Research and Prize Committee. External advisors are usually called in to assist with the nomination and selection process.

3.1.4

It is recommended

that the notice convening general meetings, where the election of members to the board of directors is on the agenda – in addition to the statutory items – also includes a description of the proposed candidates’:

Qualifications.
Other managerial duties in commercial undertakings. Including board committees.
Demanding organisational assignments.
Independence.

Not relevant

The Foundations is a self-governing institution with no shareholders. The Board is a self-perpetuating entity that selects and supplements members in accordance with its statutes.

3.1.5

It is recommended

that members to the board of directors elected by the general meeting stand for election every year at the annual general meeting, and that the members are nominated and elected individually.

We comply

The Board of Directors has seven board members who according to the statutes are elected for one year at a time. In addition, the Board has four board members who are employee-elected representatives from its subsidiaries and elected for a four-year period.

3.2.1

It is recommended

that at least half of the members of the board of directors elected in general meetings are independent in order for the board of directors to be able to act independently avoiding conflicts of interest. In order to be independent, the member in question may not:

Be or within the past five years have been a member of the executive management or an executive employee in the company, a subsidiary, or a group company.
Within the past five years have received large emoluments from the company/group, a subsidiary, or a group company in another capacity than as a member of the board of directors.
Represent or be associated with a controlling shareholder.
Within the past year has had a business relationship (e.g., personally, or indirectly as a partner or an employee, shareholder, customer, supplier, or member of a governing body in companies with similar relations) with the company, a subsidiary, or a group company, which is significant for the company and/or the business relationship.
Be or within the past three years have been employed with or a partner in the same company as the company’s auditor elected in the general meeting.
Be a CEO in a company with cross-memberships in the company’s management.
Have been a member of the board of directors for more than twelve years.
Be closely related to persons, who are not independent, of the above-stated criteria.

Even if a member of the board of directors does not fall within the above-stated criteria, the board of directors may for other reasons decide that the member in question is not independent.

We comply

Six out of seven statute-elected board members are considered independent. Further, according to the Foundation’s governance model, no present or former executive of either the Foundation or its subsidiaries can become members of the Foundation’s Board of Directors. This also applies to present or former members of the board of directors of the Foundation’s subsidiaries.

3.2.2

It is recommended

that members of the executive management are not members of the board of directors and that members retiring from the executive management do not join the board of directors immediately thereafter.

We comply

In accordance with the Foundation’s Rules of Procedure but respecting the governance rules for active involvement in subsidiaries, no present or former senior employees of either the Foundation or its subsidiaries can become members of the Board of the Foundation. This also applies to present or former members of the board of directors of a subsidiary, who cannot become a member of the Board of the Foundation.

3.3.1

It is recommended

that the board of directors and each of the members on the board of directors, in connection with the annual evaluation, of recommendation 3.5.1., assess how much time is required to perform the board duties. The aim is for the individual member of the board of directors not to take on more managerial duties than the board member in question is able to perform in a satisfactory manner.

We comply

The assessment is part of the follow up dialogue on the evaluation between the chair and the individual board member.

3.3.2

It is recommended

that the management commentary, in addition to the statutory requirements, contains the following information on the individual members of the board of directors:

Position, age, and gender.
Competencies and qualifications relevant to the company.
Independence.
Year of joining the board of directors.
Year of expiry of the current election period.
Participation in meetings of the board of directors and committee meetings.
Managerial duties in other commercial undertakings, including board committees, and demanding organisational assignments
The number of shares, options, warrants, etc. that the member holds in the company and its group companies and any changes in such holdings during the financial year.

We comply

The information is presented in either the annual report or on the Foundation’s website.

3.4.1

It is recommended

that the management describes in the management commentary:

The board committees’ most significant activities and the number of meetings in the past year.
The members on the individual board committees, including the chairperson, and the independence of the members of the committee in question.

In addition, it is recommended that the board committees’ terms of reference are published on the company’s website.

We comply

Information to be found on the Foundation’s website and in the Annual report 2023.

3.4.2

It is recommended

that board committees solely consist of members of the board of directors and that the majority of the members of the board committees are independent.

We comply

The Board consists of 11 members, of which seven are elected according to the statues and four are employee-elected representatives appointed by Group employees.

Six out of seven statute-elected board members are considered independent.

Committee member are all elected among statute-elected board members, and the majority of the members of the board committees are independent.

3.4.3

It is recommended

that the board of directors establishes an audit committee and appoints a chairperson of the audit committee, who is not the chairperson of the board of directors. The Committee recommends that the audit committee, in addition to its statutory duties, assists the board of directors in:

Supervising the correctness of the published financial information, including accounting practices in significant areas, significant accounting estimates, and related party transactions.
Reviewing internal control and risk areas in order to ensure management of significant risks, including in relation to the announced financial outlook.
Assessing the need for internal audit.
Performing the evaluation of the auditor elected by the general meeting.
Reviewing the auditor fee for the auditor elected by the general meeting.
Supervising the scope of the non-audit services performed by the auditor elected by the general meeting.
Ensuring regular interaction between the auditor elected by the general meeting and the board of directors, for instance, that the board of directors and the audit committee at least once a year meet with the auditor without the executive management being present.

If the board of directors, based on a recommendation from the audit committee, decides to set up an internal audit function, the audit committee must:

Prepare terms of reference and recommendations on the nomination, employment, and dismissal of the head of the internal audit function and on the budget for the department.
Ensure that the internal audit function has sufficient resources and competencies to perform its role.
Supervise the executive management’s follow-up on the conclusions and recommendations of the internal audit function.

We explain

As a self-governed Foundation with no shareholders, financial information is only shared in the Annual report but complemented by its subsidiaries, which share information on a quarterly basis. Further, the Foundation has chosen not to have an audit committee or internal audit function.

3.4.4

It is recommended

that the board of directors establishes a nomination committee to perform at least the following preparatory tasks:

Describing the required qualifications for a given member of the board of directors and the executive management, the estimated time required for performing the duties of this member of the board of directors, and the competencies, knowledge, and experience that is or should be represented in the two management bodies.
On an annual basis evaluate the board of directors and the executive management’s structure, size, composition, and results and prepare recommendations for the board of directors for any changes.
In cooperation with the chairperson handling the annual evaluation of the board of directors and assessing the individual management members’ competencies, knowledge, experience, and successions as well as reporting on it to the board of directors.
Handling the recruitment of new members to the board of directors and the executive management and nominating candidates for the board of directors’ approval.
Ensuring that a succession plan for the executive management is in place.
Supervising executive management’s policy for the engagement of executive employees.
Supervising the preparation of a diversity policy for the board of directors’ approval.

We comply

The tasks are performed by the Chair and Deputy Chair.

3.4.5

It is recommended

that the board of directors establishes a remuneration committee to perform at least the following preparatory tasks:

Preparing a draft remuneration policy for the board of directors’ approval prior to the presentation at the general meeting.
Providing a proposal to the board of directors on the remuneration of the members of the executive management.
Providing a proposal to the board of directors on the remuneration of the board of directors prior to the presentation at the general meeting.
Ensuring that the management’s actual remuneration complies with the company’s remuneration policy and the evaluation of the individual member’s performance.
Assisting in the preparation of the annual remuneration report for the board of directors’ approval prior to the presentation for the general meeting’s advisory vote.

We comply

The tasks are performed by the Chair and Deputy Chair. Remuneration policy is reviewed on a yearly basis.

3.5.1

It is recommended

that the board of directors once a year evaluate the board of directors and at least every three years engage external assistance in the evaluation. The Committee recommends that the evaluation focuses on the recommendations on the board of directors’ work, efficiency, composition, and organisation, cf. recommendations 3.1.-3.4. above, and that the evaluation as a minimum always includes the following topics:

The composition of the board of directors with a focus on competencies and diversity.
The board of directors and the individual member’s contribution and results.
The cooperation of the board of directors and between the board of directors and the executive management.
The chairperson’s leadership of the board of directors.
The committee structure and the work in the committees.
The organisation of the work of the board of directors and the quality of the material provided to the board of directors.
The board members’ preparation for and active participation in the meetings of the board of directors.

We comply

The Board performs an annual self-assessment and every second year with external assistance.

3.5.2

It is recommended

that the entire board of directors discusses the results of the evaluation of the board of directors and that the procedure for the evaluation and the general conclusions of the evaluation are described in the management commentary, on the company’s website, and in the company’s general meeting.

We comply

3.5.3

It is recommended

that the board of directors at least once a year evaluates the work and results of the executive management according to pre-established criteria and that the chairperson reviews the evaluation together with the executive management. In addition, the board of directors should on a continuous basis assess the need for changes in the structure and composition of the executive management, including in respect of diversity, succession planning, and risks, in light of the company’s strategy.

We comply

The work and performance of the Management Team is assessed alongside the annual self-assessment of the board.

4.1.1

It is recommended

that the remuneration for the board of directors and the executive management and the other terms of employment/service is considered competitive and consistent with the company’s long-term shareholder interests.

We comply

The Foundation conducts regular benchmarking of the remuneration of the Board of Directors and of all employees in the Foundation. The Foundation’s Remuneration policy can be accessed on the Foundation’s website.

4.1.2

It is recommended

that share-based incentive schemes are revolving, i.e., that they are periodically granted, and that they primarily consist of long-term schemes with a vesting or maturity period of at least three years.

Not relevant

The Foundation is a self-governing and independent institution with no shareholders and therefore no share-based incentive schemes. The Foundation’s Remuneration policy can be accessed on the Foundation’s website.

4.1.3

It is recommended

that the variable part of the remuneration has a cap at the time of grant and that there is transparency in respect of the potential value at the time of exercise under pessimistic, expected, and optimistic scenarios.

We comply

All incentives schemes used in the Foundation is defined with a cap. The Foundation’s Remuneration policy can be accessed on the Foundation’s website.

4.1.4

It is recommended

that the overall value of the remuneration for the notice period, including severance payment, in connection with a member of the executive management’s departure, does not exceed two years’ remuneration including all remuneration elements.

We comply

The Foundation’s Remuneration policy can be accessed on the Foundation’s website.

4.1.5

It is recommended

that members of the board of directors are not remunerated with share options and warrants.

We comply

The Board of Directors is remunerated using a fixed fee structure, which exclude share options, warrants and other variable elements. The Foundation’s Remuneration policy and be accessed on the Foundation’s website.

4.1.6

It is recommended

that the company has the option to reclaim, in whole or in part, variable remuneration from the board of directors and the executive management if the remuneration granted, earned, or paid was based on information, which subsequently proves to be incorrect, or if the recipient acted in bad faith in respect of other matters, which implied payment of a too large variable remuneration.

We comply

The Foundation’s Remuneration policy can be accessed on the Foundation’s website. Claw back mechanism is in place.

5.1.1

It is recommended

that the board of directors based on the company’s strategy and business model consider, for instance, the most significant strategic, business, accounting, and liquidity risks. The company should in the management commentary give an account of these risks and the company’s risk management.

We comply

An overall risk assessment is included in the annual Board strategy seminar.

5.1.2

It is recommended

that the board of directors establishes a whistle blower scheme, giving the employees and other stakeholders the opportunity to report serious violations or suspicion thereof in an expedient and confidential manner and that a procedure is in place for handling such whistle blower cases.

We comply

The Foundation’s whistle-blower system is available on the Foundation’s website.

2022

Recommendations

Lundbeckfonden

1.1.1

It is recommended

We comply

The Foundation’s Governance Principles and policies can be accessed on the Foundation’s website.

1.1.2

It is recommended

Not relevant

The Foundation’s Governance Principles and Communication policy can be accessed on the Foundation’s website.

1.1.3

It is recommended

that the company publishes quarterly reports.

Not relevant

The Foundation does not publish quarterly reports since it is not a public company. The Foundation’s large subsidiaries publish quarterly reports.

1.2.1

It is recommended

Not relevant

The Foundation is a self-governing and independent institution with no shareholders.

1.2.2

It is recommended

that proxies and postal votes to be used at the general meeting enable the shareholders to consider each individual item on the agenda.

Not relevant

The Foundation is a self-governing and independent institution with no shareholders.

1.3.1

It is recommended

Not relevant

The Foundation is a self-owned institution with no shareholders.

1.4.1

It is recommended

We explain

The Foundation does not have a policy for corporate social responsibility, but its priorities are shared and communicated in the annual Sustainability report, which is available on the Foundation’s website.

1.4.2

It is recommended

that the board of directors adopts a tax policy to be made available on the company’s website.

We comply

The Foundation’s tax policy can be accessed on the Foundation’s website.

2.1.1

It is recommended

We comply

2.1.2

It is recommended

that the board of directors at least once a year discusses and on regular basis follow up on the company’s overall strategic targets in order to ensure value creation in the company.

We comply

The Board of Directors has an annual Board strategy seminar.

2.1.3

It is recommended

Not relevant

The Foundations is a self-governing institution with no shareholders.

2.1.4

It is recommended

that the board of directors prepares and on an annual basis reviews the guidelines for the executive management, including requirements in respect of the reporting to the board of directors.

We comply

Once a year the Board of Directors reviews the guidelines for the CEO.

2.2.1

It is recommended

We comply

The Board of Directors has appointed a Chair and a Deputy Chair.

2.2.2

It is recommended

We comply

The Board performs an annual self-assessment to ensure that the board holds all relevant competencies.

2.2.3

It is recommended

We comply

3.1.1

It is recommended

that the board of directors on an annual basis review and in the management commentary and/or on the company’s website states:

Which qualifications the board of directors should possess, collectively and individually, in order to perform its duties in the best possible manner.
The composition of and diversity on the board of directors.

We comply

An overview of the composition of the Board of Directors is presented in the Management Report 2022 and on the Foundation’s website.

An overview on the shares in the Foundation’s subsidiaries owned by the members of the Board of the Foundation is presented in the Management Report 2022.

3.1.2

It is recommended

that the board of directors on an annual basis discusses the company’s activities in order to ensure relevant diversity at the different management levels of the company and adopts a diversity policy, which is included in the management commentary and/or available on the company’s website.

We explain

The Foundation does not have a diversity policy, but its priorities are shared and communicated in the annual Sustainability report, which is available on the Foundation’s website.

3.1.3

It is recommended

that candidates for the board of directors are recruited based on a thorough process approved by the board of directors. The Committee recommends that in assessing candidates for the board of directors – in addition to individual competencies and qualifications – the need for continuity, renewal, and diversity is also considered.

3.1.4

Qualifications.
Other managerial duties in commercial undertakings. Including board committees.
Demanding organisational assignments.
Independence.

Not relevant

The Foundations is a self-governing institution with no shareholders. The Board is a self-perpetuating entity that selects and supplements members in accordance with its statutes.

3.1.5

We comply

The Board of Directors has seven independent board members who are elected for one year at a time. In addition, the Board has four board members who are employee-elected representatives from its subsidiaries and elected for a four-year period.

3.2.1

It is recommended

that at least half of the members of the board of directors elected in general meetings are independent in order for the board of directors to be able to act independently avoiding conflicts of interest. In order to be independent, the member in question may not:

Be or within the past five years have been a member of the executive management or an executive employee in the company, a subsidiary, or a group company.
Within the past five years have received large emoluments from the company/group, a subsidiary, or a group company in another capacity than as a member of the board of directors.
Represent or be associated with a controlling shareholder.
Within the past year has had a business relationship (e.g., personally, or indirectly as a partner or an employee, shareholder, customer, supplier, or member of a governing body in companies with similar relations) with the company, a subsidiary, or a group company, which is significant for the company and/or the business relationship.
Be or within the past three years have been employed with or a partner in the same company as the company’s auditor elected in the general meeting.
Be a CEO in a company with cross-memberships in the company’s management.
Have been a member of the board of directors for more than twelve years.
Be closely related to persons, who are not independent, of the above-stated criteria.

Even if a member of the board of directors does not fall within the above-stated criteria, the board of directors may for other reasons decide that the member in question is not independent.

We comply

Seven out of eleven board members of the Foundation’s Board of Directors are statute-elected and considered independent. Further, according to the Foundation’s governance model, no present or former executive of either the Foundation or its subsidiaries can become members of the Foundation’s Board of Directors. This also applies to present or former members of the board of directors of the Foundation’s subsidiaries.

3.2.2

It is recommended

that members of the executive management are not members of the board of directors and that members retiring from the executive management do not join the board of directors immediately thereafter.

We comply

3.3.1

It is recommended

We comply

The assessment is part of the follow up dialogue on the evaluation between the chair and the individual board member.

3.3.2

It is recommended

that the management commentary, in addition to the statutory requirements, contains the following information on the individual members of the board of directors:

Position, age, and gender.
Competencies and qualifications relevant to the company.
Independence.
Year of joining the board of directors.
Year of expiry of the current election period.
Participation in meetings of the board of directors and committee meetings.
Managerial duties in other commercial undertakings, including board committees, and demanding organisational assignments
The number of shares, options, warrants, etc. that the member holds in the company and its group companies and any changes in such holdings during the financial year.

We comply

The information is presented in either the annual report or on the Foundation’s website.

3.4.1

It is recommended

that the management describes in the management commentary:

The board committees’ most significant activities and the number of meetings in the past year.
The members on the individual board committees, including the chairperson, and the independence of the members of the committee in question.

In addition, it is recommended that the board committees’ terms of reference are published on the company’s website.

We comply

Information to be found on the Foundation’s website and in the Annual report 2022.

3.4.2

It is recommended

that board committees solely consist of members of the board of directors and that the majority of the members of the board committees are independent.

We comply

The Board consists of 11 members, of which seven are elected according to the statues and four are employee-elected representatives appointed by Group employees.

The seven statute-elected board members are considered independent.
Committee member are all elected among independent board members.

3.4.3

It is recommended

Supervising the correctness of the published financial information, including accounting practices in significant areas, significant accounting estimates, and related party transactions.
Reviewing internal control and risk areas in order to ensure management of significant risks, including in relation to the announced financial outlook.
Assessing the need for internal audit.
Performing the evaluation of the auditor elected by the general meeting.
Reviewing the auditor fee for the auditor elected by the general meeting.
Supervising the scope of the non-audit services performed by the auditor elected by the general meeting.
Ensuring regular interaction between the auditor elected by the general meeting and the board of directors, for instance, that the board of directors and the audit committee at least once a year meet with the auditor without the executive management being present.

If the board of directors, based on a recommendation from the audit committee, decides to set up an internal audit function, the audit committee must:

Prepare terms of reference and recommendations on the nomination, employment, and dismissal of the head of the internal audit function and on the budget for the department.
Ensure that the internal audit function has sufficient resources and competencies to perform its role.
Supervise the executive management’s follow-up on the conclusions and recommendations of the internal audit function.

We explain

3.4.4

It is recommended

that the board of directors establishes a nomination committee to perform at least the following preparatory tasks:

Describing the required qualifications for a given member of the board of directors and the executive management, the estimated time required for performing the duties of this member of the board of directors, and the competencies, knowledge, and experience that is or should be represented in the two management bodies.
On an annual basis evaluate the board of directors and the executive management’s structure, size, composition, and results and prepare recommendations for the board of directors for any changes.
In cooperation with the chairperson handling the annual evaluation of the board of directors and assessing the individual management members’ competencies, knowledge, experience, and successions as well as reporting on it to the board of directors.
Handling the recruitment of new members to the board of directors and the executive management and nominating candidates for the board of directors’ approval.
Ensuring that a succession plan for the executive management is in place.
Supervising executive management’s policy for the engagement of executive employees.
Supervising the preparation of a diversity policy for the board of directors’ approval.

We comply

The tasks are performed by the Chair and Deputy Chair.

3.4.5

It is recommended

that the board of directors establishes a remuneration committee to perform at least the following preparatory tasks:

Preparing a draft remuneration policy for the board of directors’ approval prior to the presentation at the general meeting.
Providing a proposal to the board of directors on the remuneration of the members of the executive management.
Providing a proposal to the board of directors on the remuneration of the board of directors prior to the presentation at the general meeting.
Ensuring that the management’s actual remuneration complies with the company’s remuneration policy and the evaluation of the individual member’s performance.
Assisting in the preparation of the annual remuneration report for the board of directors’ approval prior to the presentation for the general meeting’s advisory vote.

We comply

The tasks are performed by the Chair and Deputy Chair. Remuneration policy is reviewed on a yearly basis.

3.5.1

It is recommended

The composition of the board of directors with a focus on competencies and diversity.
The board of directors and the individual member’s contribution and results.
The cooperation of the board of directors and between the board of directors and the executive management.
The chairperson’s leadership of the board of directors.
The committee structure and the work in the committees.
The organisation of the work of the board of directors and the quality of the material provided to the board of directors.
The board members’ preparation for and active participation in the meetings of the board of directors.

We comply

The Board performs an annual self-assessment and every second year with external assistance.

3.5.2

It is recommended

We comply

3.5.3

It is recommended

We comply

The work and performance of the Management Team is assessed alongside the annual self-assessment of the board.

4.1.1

It is recommended

We comply

4.1.2

It is recommended

Not relevant

4.1.3

It is recommended

We comply

All incentives schemes used in the Foundation is defined with a cap. The Foundation’s Remuneration policy can be accessed on the Foundation’s website.

4.1.4

It is recommended

We comply

The Foundation’s Remuneration policy can be accessed on the Foundation’s website.

4.1.5

It is recommended

that members of the board of directors are not remunerated with share options and warrants.

We comply

4.1.6

It is recommended

We comply

The Foundation’s Remuneration policy can be accessed on the Foundation’s website. Claw back mechanism is in place.

5.1.1

It is recommended

We comply

An overall risk assessment is included in the annual Board strategy seminar.

5.1.2

It is recommended

We comply

The Foundation’s whistle-blower system is available on the Foundation’s website.