Board of Directors

Set out below is a description of the members of the Board of Directors and the tasks they carry out.

Lundbeck’s Board of Directors consists of five external directors elected by the shareholders at the Annual General Meeting (AGM) and three members elected by Lundbeck’s Danish employees.

Lundbeck’s Board of Directors is responsible for approving the corporate strategy, setting goals for Executive Management, and for ensuring that members of Executive Management and other senior managers have the right qualifications. The Board of Directors also evaluates management performance and management remuneration. Furthermore, the Board of Directors has the overall responsibility for ensuring that adequate internal and external controls are in place, and for identifying and addressing any relevant risks. This responsibility is defined in the Danish Companies Act and stipulated in the rules of procedures for the Board of Directors. The Board of Directors regularly evaluates the business, our financial strategies and policies, and ensures that day-to-day management is carried out in accordance with such policies. 

Executive Management reports to the Board of Directors on an ongoing basis regarding:

  • Follow-up on approved strategic activities
  • Key risks, including risks associated with patenting, research and development (R&D), regulatory, commercial and financial issues
  • Recommendation for approval of large-scale investments and transactions which are of an unusual nature or size for Lundbeck
  • Financial reporting, including follow-up on budgets, estimates, interim financial statements and annual reports
  • Matters such as internal controls in the financial reporting procedures, special financial and accounting issues, evaluation of financial reporting and other financial information
  • Processing of final audit book comments from the independent auditors
  • Feedback from investor meetings to provide shareholders’ view on Lundbeck.

In 2015, the Board of Directors assessed and approved our new corporate strategy, in support of a new vision, four new corporate principles and a number of strategic objectives, including a focus on four defined key disease areas, innovation, globalization, profitability and organization. 

In 2015, the Board of Directors held 12 meetings and took part in a one-day strategy seminars with the Executive Management team.

Composition
Lundbeck’s Board of Directors consists of five external directors elected by the shareholders at the AGM, and three members elected by our Danish employees. Members elected at the AGM are up for re-election every year, while the members elected by our employees are up for re-election every four years. Board members may retain their seat on Lundbeck’s Board of Directors until the AGM in the calendar year in which they reach the age of 70. In 2016, Håkan Björklund did not stand for re-election and Lars Rasmussen was elected as Chairman.

Lundbeck promotes and encourages equal opportunities and diversity. Our goals regarding equal opportunities and diversity at Board of Directors level have been reached in 2015. According to the goal setting, at least one of the five members elected by the shareholders should be of the underrepresented gender (women). These goals were established in 2013 and should be reached within a four-year period, to allow for continuity of the board. In terms of the 2016 board composition, there are two female board members elected by the shareholders and one elected by Lundbeck’s employees.

Independence
Lundbeck has a two-tier board structure consisting of the Board of Directors and Executive Management. No board member is a member of Lundbeck’s Executive Management. NASDAQ Copenhagen recommends that at least half of a company’s board members should be independent. The issue of board member independence is particularly relevant for Lundbeck, which has a single principal shareholder, the Lundbeck Foundation, holding 70% of the shares. Based on the guidance from NASDAQ Copenhagen, four of the six board members elected at the AGM are independent, while two members, due to their close affiliation with the Foundation, are not. The Foundation does not nominate the chairman of Lundbeck’s Board of Directors, but only recommends members for the position of deputy chairman and two ordinary board members.

Competencies
Every year, Lundbeck’s Board of Directors and Executive Management conduct a self-evaluation to assess strengths and weaknesses of the work performed by the Board and the committees. Based on the outcome, changes to the Board of Directors’ working procedures are discussed and any proposals for improvement are considered. The 2015 assessment has not given rise to any changes.

Chairmanship
The Chairman and Deputy Chairman ensure that the Board of Directors’ tasks and responsibilities are handled in a balanced and satisfactory manner. In addition to activities related to strategic, financial and operational supervision of Executive Management, the Chairmanship carries out the role of a nomination committee. In March 2016, the Board of Directors elected Lars Rasmussen as Chairman and Lene Skole as Deputy Chairman. 

Committees
The Board of Directors has set up three advisory committees: the Audit Committee, the Remuneration Committee and the Scientific Committee. The three committees advise the Board on financial information and reporting, the company’s remuneration strategy including remuneration of Executive Management, and R&D, respectively. The Chairman of the Board of Directors is not Chairman of the Audit Committee. The Chairmanship carries out the role of a Nomination Committee.

Audit Committee– financial advice

The Audit Committee provides advice to the Board of Directors on internal and external controls in financial reporting procedures, special financial and accounting issues, evaluation of financial reporting and other financial information and risk management issues. 

The Audit Committee provides advice on the basis of:

  • Meetings with the Corporate Management Group and internal and independent auditors
  • Management’s recommendation concerning accounting policies, accounting estimates, new accounting standards and significant single transactions
  • Critical guidelines and policies for internal controls and financial reporting procedures
  • Annual strategy, audit plans and review of status on audit procedures performed by Internal Audit
  • Communication from independent auditors to the Board of Directors, including monitoring and control of auditors’ independence, review of audit planning and draft audit book comments
  • Systematic review of the company’s risk exposure
  • Cases received through the whistleblower system

In March 2016, the Board of Directors elected Jesper Ovesen as Chairman and Lars Rasmussen and Lars Holmqvist as members of the Audit Committee. The Chairman of the Board does not act as Chairman of the Audit Committee and more than half of the members are independent. 

Remuneration Committee – advice on remuneration

The Remuneration Committee informs the Board of Directors of remuneration decisions regarding members of Executive Management. The Committee also advises on the company’s overall remuneration policy. Additionally, the Committee handles assignments related to recruitment and appointments to Lundbeck’s senior management. 

In March 2015, the Board of Directors elected Lars Rasmussen as Chairman and Lene Skole and Terrie Curran as members of the Remuneration Committee. More than half of the members in the Remuneration Committee are independent. 

Scientific Committee – advice on R&D

Lundbeck’s Board of Directors has a Scientific Committee, the purpose of which is to advise the Board of Directors on support for strategic R&D. 

In March 2016, the Board of Directors elected Lars Rasmussen as Chairman and Lene Skole as a members of the Scientific Committee. 

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