{"id":236272,"date":"2025-10-24T06:21:13","date_gmt":"2025-10-24T06:21:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/236272\/"},"modified":"2025-10-24T06:21:13","modified_gmt":"2025-10-24T06:21:13","slug":"novo-nordisks-new-king-tightens-his-grip-at-obesity-drug-giant","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/236272\/","title":{"rendered":"Novo Nordisk\u2019s new \u2018king\u2019 tightens his grip at obesity drug giant"},"content":{"rendered":"

A board shake-up at Novo Nordisk has blindsided the market and concentrated power in the hands of one man at the top of one of Europe\u2019s biggest companies.<\/p>\n

Lars Rebien S\u00f8rensen, a former CEO of the drugmaker, was this week announced as its chair, as the incumbent\u00a0and six other directors said they were stepping down<\/a>.<\/p>\n

He is already chair of Novo\u2019s majority owner, the Novo Nordisk Foundation, consolidating his influence over the maker of blockbuster drugs Ozempic and Wegovy.\u00a0The foundation has also put forward five new candidates to join Novo\u2019s board.<\/p>\n

The aim is to accelerate change at a company that has fallen behind its main rival Eli Lilly in the crucial US obesity market. <\/p>\n

But Kurt Jacobsen, a Copenhagen Business School professor who has written a history of Novo Nordisk, said the board shake-up was \u201cunbelievable\u201d. S\u00f8rensen is now \u201cking of the Novo Nordisk kingdom,\u201d he said.\u00a0\u201cThis is a power concentration I have not seen in Danish business.\u201d\u00a0<\/p>\n

Novo Nordisk and the foundation, which owns 28.1 per cent of Novo\u2019s share capital and 77.1 per cent of its voting rights, declined to comment. <\/p>\n

S\u00f8rensen has said he intends to be chair of Novo for only two to three years and he is resigning his seat on another related board, Novo Holdings, which manages the foundation\u2019s investments.\u00a0Novo Holdings will take on responsibility for monitoring Novo\u2019s performance.<\/p>\n

Jacobsen points out that there are nonetheless major potential downsides to S\u00f8rensen\u2019s wide-ranging role. \u201cHe is taking an enormous risk personally because if this fails, or the company doesn\u2019t manage to improve its results and the price of the shares, it all goes back to him,\u201d he said.\u00a0<\/p>\n

The overhaul comes after the foundation ousted former chief executive Lars Fruergaard J\u00f8rgensen<\/a> in May, blaming him for an almost 60 per cent share price fall in the past year as profit growth has slowed and investors worried about Novo\u2019s pipeline of new obesity drugs.\u00a0<\/p>\n

\"Line<\/p>\n

One top 10 shareholder said S\u00f8rensen, who was chief executive of Novo Nordisk before J\u00f8rgensen, had been influential in his departure. He joined the board as an observer when J\u00f8rgensen\u2019s exit was announced. \u201cThe board probably should have resigned when they kicked the chief executive out,\u201d the shareholder said.\u00a0<\/p>\n

S\u00f8rensen said this week that he acted because the board was moving too slowly to update its composition with directors with more relevant experience to help it navigate the US market.<\/p>\n

Another person close to the company said it looked like incumbent chair \u2014 energy sector veteran Helge Lund \u2014 and the six independent directors had announced their departure this week because they had found they could not work with the foundation. \u201cThis is the second time [the foundation] has done things abruptly and in conflict mode,\u201d the person said.\u00a0\u00a0<\/p>\n

The new chief executive, Mike Doustdar<\/a>, did not push for the board changes, according to two people close to the discussions.<\/p>\n

One of these people said S\u00f8rensen was \u201ca temperamental person who often acts before he does any planning\u2009.\u2009.\u2009.\u2009He sees himself as a saviour\u201d. <\/p>\n

A former executive at Novo said the changes had been \u201cvery much in character\u201d for S\u00f8rensen who \u201cbelieves he is right and likes to be seen as a firm and decisive leader\u201d.\u00a0<\/p>\n

But Paul Major, a healthcare-focused fund manager at Bellevue Asset Management, who has previously held Novo shares but would not buy now, said the foundation was also responsible for failing to adapt to changes in Novo\u2019s most lucrative market. <\/p>\n

In the US, the company has been slower to focus on the growth in direct-to-consumer sales, a crucial development as more consumers opt to pay for obesity drugs themselves.\u00a0<\/p>\n

\u201cI think the foundation and S\u00f8rensen have to take some of the blame for Novo\u2019s problems,\u201d Major said.\u00a0<\/p>\n

He added that S\u00f8rensen was a \u201cgreat man in his day\u201d but \u201cin my mind, he\u2019s as guilty as he is a visionary\u201d.\u00a0<\/p>\n

However, some investors and analysts are pleased that the board is changing, even if they wish it had been a more orderly process.<\/p>\n

Mikael Bak, director of the Danish Shareholder\u2019s Association, said it had raised at the AGM in spring whether Lund had the right skills and experience to support the chief executive.\u00a0<\/p>\n

\u201cIt is not surprising that something had to happen,\u201d he said. \u201cBut of course this is dramatic, and we would have preferred a normal situation where changes come at an ordinary AGM\u2009.\u2009.\u2009.\u2009[and] we want a clear and normal governance model as soon as possible.\u201d\u00a0<\/p>\n

Novo\u2019s board has called an extraordinary general meeting on November 14 to elect the new chair and directors.\u00a0The foundation has also said it intends to appoint a further two directors next year.<\/p>\n

Eugen Uretzki, a healthcare analyst at German asset manager Flossbach von Storch, is in favour of the board changes. \u201cThis stresses the urgency with which Novo has to transform itself,\u201d he said.<\/p>\n

The shake-up has also prompted questions about the roles of foundations that control companies, a Danish model also used by businesses including Lego, Carlsberg, and Maersk.\u00a0<\/p>\n

The Novo Nordisk Foundation\u2019s website says the companies it owns are governed by independent boards of directors \u201censuring an arm\u2019s length relationship\u201d. <\/p>\n

\u201cThe foundation is particularly mindful of observing and respecting the rights of other shareholders,\u201d it says.<\/p>\n

Kasper Meisner Nielsen, director at Copenhagen Business School\u2019s centre for corporate governance said the changes were \u201cdrastic\u201d and of a type that tend to happen only at companies in \u201cdeep crisis\u201d.\u00a0<\/p>\n

He added that the board could become less independent with the former chief executive as chair. \u201cOn the one hand we like the board to be independent of owners, but on the other side we like to have active owners,\u201d he said, noting that if the majority shareholder is pursuing value creation, minority shareholders can benefit.\u00a0<\/p>\n

But Niels Lunde, editor of the Danish financial newspaper B\u00f8rsen, was clear about the potential pitfalls of the concentration of power.<\/p>\n

\u201cThe most important and valuable company in Denmark is in effect controlled by one person who claims to know better than the highly respected leaders who are leaving the board,\u201d he said. <\/p>\n

\u201cAt the top of Danish business, everyone is shaking their heads at this tragicomic farce, but no one dares to challenge Lars Rebien S\u00f8rensen, so they remain silent.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A board shake-up at Novo Nordisk has blindsided the market and concentrated power in the hands of one…\n","protected":false},"author":2,"featured_media":236273,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[49,48,84,392],"class_list":{"0":"post-236272","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-ca","9":"tag-canada","10":"tag-health","11":"tag-healthcare"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/236272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=236272"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/236272\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/236273"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=236272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=236272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=236272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}