What assures?

What assures? This is a question that is not easily answered in a single sentence. What is important to understand is that assurance is different for different stakeholders and for different organisations.

Some types of assurance mechanism are inherent due to the activities of the company. They can be known or unknown to the stakeholders, and they can be inherent to the business or voluntarily added to the activities of the company. For example, to many customers it is inherent that pharmaceutical products are under strict regulatory control, which implies that the customer can at any time rest assured that the product safety and quality are totally dependable, but not many customers think of this as assurance. There are therefore many aspects of an organisation’s activities and performance that provide assurance for different stakeholders on different issues.

What is assurance? In sustainability forums, assurance is traditionally closely linked to companies’ reporting of their sustainability performance. According to AccountAbility’s AA1000 Assurance Standard: ’Assurance is an evaluation method that uses a specific set of principles and standards to assess the quality of a Reporting Organisation’s subject matter, such as Reports, and the organisation’s underlying systems, processes and competencies that underpin its performance. Assurance includes the communication of the results of this evaluation to provide credibility to the subject matter for its users.’

To Novo Nordisk, this type of assurance is just one of many assurance methods which are applied in the company. Just as assurance is either something inherent in the activities of the company or something the company engages in to ensure a higher level of credibility of the activities in the company, there are types of assurance which are mandatory and regulated by authorities and types which are used voluntarily. For all of these types, a range of processes are in place to provide information, documentation and assurance. Some of these are explicit assurance mechanisms, while others implicitly serve as safeguards to reliability.

In Novo Nordisk, there are many types of assurance mechanism, some more evident than others. A a basis for all of these is the Novo Nordisk Way of Management  which forms the foundation for ‘how we do business’. The Charter describes the corporate values and management principles, and the Novo Nordisk Way of Management also lists policies on all core business activities. The values on which the assurance mechanisms are built are:

• Accountable
• Ambitious
• Responsible
• Engaged with stakeholders
• Open and honest
• Ready for change
  

Below is a list of some of the assurance mechanisms in place that can add assurance and thereby credibility to the company’s activities and reporting with regard to accuracy, completeness and reliability. The assurance mechanisms are grouped according to whether they are internally or externally generated.

Externally generated assurance mechanisms

• Financial audits of annual financial results
• Assurance of annual non-financial results
• Share price
• FDA requirements and control in relation to products and production
• Regulatory approvals
• Benchmarks, ratings and surveys, eg Global Reporters 2004
• SRI ratings, eg SAM, oekom, EIRIS, SIRI and others
• Inclusion in SRI indices eg Dow Jones and FTSE4Good
• Community Growth Funds, eg World Diabetes Foundation
• Other requirements and control from authorities
• External audits as part of ISO 9001 and ISO 14001 certification.

Internally generated assurance mechanisms

• Annual Report (including non-financial information and other reporting formats, eg Annual Review and online version of the report)
• Quarterly Financial Statements
• Press releases
• Financial results presentations, eg roadshows
• Specialist publications, eg Novo Nordisk’s stakeholder magazine Share 
• Websites, eg Diabetes, DAWN, Equal Opportunities toolbox, Supplier Toolbox
• Employee magazines, People and People+
• Internet and intranet
• Helplines.

Strategies, policies and programmes assure by:

• Investor Relations Programmes
• Policies & Codes, eg Novo Nordisk Way of Management, Business Ethics and accounting policies
• Functional strategies, eg strategies for each EVP area
• Public policies and positions, eg animal welfare policies
• Employee Value Creation models, eg People & Organisation Strategy
• Procurement policies
• Loyalty programmes
• Advertising and marketing in accordance with eg the Helsinki Declaration
• Memberships, eg Climate Savers programme.

Internal Audit assures by:

• Facilitations by independent facilitators
• Internal audits as part of ISO9001 and ISO14001 certification.

• Governance structures incl Audit Committee and 'whistleblower system', Group Internal Audit and quality audits, ombudsman function
• Risk management, eg Risk Committee and Risk Management process.

Stakeholder dialogue assures by:

• Climate surveys, eg eVoice
• Open days
• Stakeholder consultations.

Remuneration and awards assure by:

• Performance feedback, eg 3P and link to incentive system
• Balanced Scorecards at different levels, eg Corporate, Executive Vice President and Senior Vice President.
• Employee awards, eg TakeAction! award, Danish OHS award, Sales Rep of the Year, Manager of the Year, Novo Nordisk Lifetime Award etc
• Incentive schemes linked to targets.

Community involvement assures by:

• Investments in the community, eg World Diabetes Foundation, National Diabetes Programmes, TakeAction! etc.

A table containing all elements of the GRI Report Content by section and indicator can be found in the GRI Content Index.

See also The Accounting Policies for Non-financial Data, the assurance provider’s statement and the guide to assurance, and the assurance provider’s Independence statement.

This page has been assessed by PricewaterhouseCoopers as part of its assessment of Novo Nordisk’s statement that it reports ‘in accordance’ with GRI. Please refer to Audit and assurance for a full description of the nature of assurance offered.