Business historian Kurt Jacobsen is highly animated when describing the dramatic situation at Novo Nordisk, where nearly the entire board is stepping down, and the current chairman of the Novo Nordisk Foundation, Lars Rebien Sørensen, is being proposed as the new chairman of the board.
»It is an extremely unusual situation. Not just in the history of Novo Nordisk, but in the history of Danish business as a whole. I have never heard of anything similar in other major Danish companies,« says Kurt Jacobsen.
He is a professor emeritus at CBS and has authored the book ’Novo Nordisk,’ which was financed by the company and published in 2023 to mark the firm’s 100th anniversary.
Kurt Jacobsen points out that although there have been crises over the years in the two companies, Novo and Nordisk, which merged in 1989 after decades of fierce rivalry to become Novo Nordisk, these crises cannot be compared to the current situation.
»Novo Nordisk’s history has been characterized by calm and stable management conditions, so it has to be dramatic when virtually the entire board of one of the world’s major companies steps down,« he says.
Foundation Chairman Lars Rebien Sørensen will take full control if he is elected as chairman of Novo Nordisk’s board, as expected.
»Lars Rebien Sørensen places himself in a very central power position. Think about how many billions are in the foundation, and how much Novo Nordisk generates in revenue. But it also means that all decisions will fall back on him. So he is taking a very, very big risk,« believes Kurt Jacobsen.
Conversely, the leadership vacuum of recent months at Novo Nordisk is now resolved.
»It solves a fundamental problem or question: Who is in charge at Novo Nordisk? Now, there is no doubt. So, in that sense, the power structures within the group are now crystal clear,« he says.
Led the firing
The turmoil in Novo Nordisk’s leadership began this May.
The chairman of the Novo Nordisk Foundation, Lars Rebien Sørensen, used the foundation’s power as the main shareholder to orchestrate the firing of the company’s CEO, Lars Fruergaard Jørgensen, who was replaced by Mike Doustdar effective August 7.
Normally, this decision would solely be up to Novo Nordisk’s own board, led by chairman Helge Lund. But in this case, Rebien intervened. And not only that. Lars Rebien Sørensen also secured an observer seat on the company’s board.
»At that time, Lars Rebien Sørensen broke with the foundation’s arm’s length principle concerning the company,« says Kurt Jacobsen.
The Novo Nordisk Foundation, through Novo Holdings, is the main shareholder in Novo Nordisk with 28.1 percent of the shares but holds 77 percent of the voting rights, and thus has the controlling influence. When Lars Rebien Sørensen now stands for the board position at Novo Nordisk, he is truly returning to the company where he previously served as CEO for 16 years.
Major challenges
Novo Nordisk is a giant in business and for the Danish economy. Last year, revenues soared by about a quarter to over 290 billion kroner. And 101 billion kroner in profit after tax rolled into the coffers, which was 21 percent more than the previous year.
Nevertheless, Novo Nordisk faces challenges, especially in the crucial American market.
The Danish pharmaceutical company’s enormous growth in recent years has been primarily driven by the drugs Ozempic and Wegovy for the treatment of diabetes and obesity, mainly in the USA.
But competition is fierce from Novo’s major rival, the American company Eli Lilly, which produces the diabetes drug Mounjaro and the weight-loss medication Zepbound. In the USA, Zepbound has overtaken Wegovy over the past year, measured by both new patient prescriptions and the total number of prescriptions.
At the same time, Novo Nordisk is grappling with copycat products of Wegovy. And the new CEO, Mike Doustdar, has been busy with a global round of layoffs, affecting around 9,000 employees, 5,000 of whom are in Denmark.
According to journalist and author Hanne Sindbæk, who has chronicled Novo Nordisk’s history in the book ’De Renfærdige’ (’The Righteous’), the leadership crisis at the company is »completely unusual« and has lasted a long time. She is not privy to the internal process involving Lars Rebien Sørensen’s intervention in the company but is well-acquainted with Rebien’s leadership style.
»Lars Rebien is 100 percent convinced that he is right. I have no doubt about that. Otherwise, he wouldn’t intervene. It’s no fun at all. He is taking a risk for the company, the foundation, and himself. But in his view, I am sure he believes the risk is greater by not doing anything,« says Hanne Sindbæk.
She highlights that it is a »completely crazy time at Novo Nordisk« with enormous growth and intense competition in the weight-loss medication market.
»They’re riding a wild bull, and it’s hard to keep hold of the reins. The previous leadership kept saying it would all be fine, and Lars Rebien Sørensen doesn’t believe that. He comes from a school where you have to act and get things done. He’s looking ten years ahead—that’s been his strength all along,« says Hanne Sindbæk, adding:
»So he doesn’t care much if we think he’s a nice guy.«
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