Lars Rebien Sørensen on balancing the demands
of shareholders and stakeholders

Q: Can a multinational corporation serve both its shareholder, who demands profit, and its stakeholders in all of its operations, and whose demands are more challenging to fulfil? What strategies and best practices can a company implement to serve both needs?

A: In September, a group of brilliant and committed academics, advocates and experts grappled with the problem of averting a crisis in chronic diseases at the Oxford Vision 2020 summit, held in the Mandela Lecture Hall at Oxford University's Said School of Business. As CEO of Novo Nordisk - the corporation sponsoring the Oxford Vision 2020 group, a global alliance for better health - the presence of Mandela, even in the form of a bronze bust, was ironic. Only a few short years previously the company was part of the Republic of South Africa's historic legal battle with the international pharmaceutical industry over property rights on life-saving drugs.

So, what was I doing there debating a health-care crisis in 2020? I believe that, as a world leader in diabetes care, our company must have a long-term strategic focus. To my mind this is not altruism or charity, but simply a question of looking at the factors that determine the future of our company with a very long-term perspective.

I found out from day one in my position as CEO - when I was thrown into the global debate about the industry's role in providing access to medicines - that heading up a pharmaceutical company is unlikely to win you any popularity contests. I am, however, fortunate that our company has a strong ethical tradition and a history of keeping the interests of people with diabetes and other life-threatening diseases top of mind. So much so that, although the debate mainly centers around HIV and AIDS medicines, the main question for Novo Nordisk is: What about access to diabetes medicine?

I had been prepared for this confrontation in a series of conversations with employees and many of our stakeholders around the world. By the time I was selected to lead Novo Nordisk I knew a great deal about our company's heritage, and its unique portfolio of insulin and other products. However, I knew I had a lot to learn and as preparation for my leadership I set out on an educational world tour.

Each of the meetings we held in countries around the world began with a simple question to people with diabetes, employees and invited guests, which included activists and health-care providers, politicians and others: "What do you expect from a pharmaceutical company like ours?"

In country after country, our stakeholders challenged us to play a role that went well beyond business-as-usual definitions. We were directed to a new kind of social leadership - one that would demand that we redefine our goals and rethink our basic mission as a profit-making organization. It was clear that "the bottom line" could no longer be seen in purely financial terms and that "corporate social responsibility" would need to go beyond compliance and philanthropy.

I returned from those trips with a sense of direction, convinced that in an unjust and unfair world we could simply no longer retain our "neutrality". We had to take side with our customers - people with diabetes. Both those that can pay and those that can't!

This is compounded by the fact that we know a global health-care disaster is already upon us. Diabetes is now a global pandemic on the same scale as HIV/AIDS and threatens to buckle health-care systems in the developed as well as developing world. It strikes people in both rich and poor countries, affecting the old as well as the young.

But, what role should we play? How can we make a real and sustainable impact?

We are now finding answers as we engage with the very same stakeholders that criticized us over our actions in South Africa. We are promoting collaborations among different parties in the health-care system to change the course of diabetes. It is predicted that by 2030 a staggering 366 million people will have diabetes, an illness we know shortens and severely impacts on the quality of people's lives. An illness we at Novo Nordisk know how to prevent and manage.

As a former forestry major I am familiar with the delicate balance between the long-term view and more immediate necessities. On a day-to-day basis our company is focused on selling sophisticated insulin products to help regulate the blood sugar levels of people with diabetes. This is critical in delaying, and even avoiding, complications such as blindness, kidney failure and premature death from heart disease or stroke. While doing this we also employ the largest group of diabetes researchers in the private sector, exploring better treatments and ultimately a cure for diabetes.

Our research and development teams however, cannot solve the problem of rapidly rising obesity, or turn back a growing pandemic that will disproportionately afflict the wealthiest people in poor countries, and the least well off in the developed world.

Thanks to a receptive board and our committed shareholders, the company has been able to invest around $100 million establishing the World Diabetes Foundation in 2001 as an independent Danish trust. Already this new body has funded over 30 projects - promoting awareness and education, and building capacity - that will affect the lives of an estimated 67 million people with diabetes in developing countries in the next few years alone. At the same time, the company has adopted a preferential pricing policy whereby the poorest nations can buy life saving insulin at 20 per cent of its price in the developed world.

I don't know if we will hold future meetings in the hall at the Said Business School named after him at Oxford University, but I am sure that Nelson Mandela will continue to symbolize, for me at least, the need for all of us in the private sector to do more. His example is a reminder that failure to accept our responsibility to society and the future is not an option. As business people we are well-equipped to take on the great tasks ahead and make an impact on society's health, but it has become very clear that we can't solve society's problem with a pill or an injection. It's going to take more than that and in particular, a new effort to get the word out about diabetes risk factors to young people. We owe it to them to act now in order to make a real difference to their future - one without the burden of diabetes.