Recommendations on foundation governance

Updated 20 March 2026

RECOMMENDATION

1.1 It is recommended that the board of directors adopt principles for external communication that address the need for transparency and stakeholders’ needs and possibilities to obtain relevant up-to-date information about the circumstances of the foundation.

COMPLIANCE

The LEO Foundation is in compliance with this recommendation.

The board has adopted a communication policy that sets out the principles for the foundation’s external communication activities.

As a general rule, the foundation’s CEO represents and speaks on behalf of the foundation in all external communication on matters concerning the foundation and its activities.  In the daily communication with grant applicants and recipients, the foundation is usually represented by its secretariat.

2.1.1 It is recommended that, in order to secure the activities of the commercial foundation in accordance with the purposes and interests of the foundation, the board of directors should, at least once a year, take a position on the overall strategy and distribution policy of the foundation on the basis of the articles of association.

The LEO Foundation is in compliance with this recommendation.

Besides discussing and deciding upon the overall strategic direction and the grant policy of the foundation at an annual strategy seminar, the board is continuously focused on the best possible implementation of such strategic decisions and the need for any adjustments along the way.

2.1.2 It is recommended that the board of directors regularly address whether the foundation’s management of its total capital is in line with the purpose of the foundation and its long- and short-term needs.

The LEO Foundation is in compliance with this recommendation.

The board reviews the Foundation’s investment strategy and policy annually and conducts regular reviews of the Foundation’s main risks (incl. the aggregate risk profile of its investment portfolio). This is done to ensure that the asset management and risk profile matches the Foundation’s purpose, needs, and obligations.  

2.2.1 It is recommended that the chairman of the board of directors organise,  convene and chair meetings of the board of directors in order to ensure  effective board work and to establish the best conditions for the work of the board members, individually and collectively.

The LEO Foundation is in compliance with this recommendation.

The chairman plays an active role in organizing and setting the agenda of the board meetings and, furthermore, keeps the board updated in between meetings on matters of importance for the Foundation. 

2.2.2 It is recommended that if the board of directors asks a board member to perform special activities for the foundation which extend beyond board duties, a board resolution to that effect be passed to ensure that the board of directors maintains its independent, general management and control function. Appropriate allocation of responsibilities should be ensured between the chairman and the other members of the board of directors and the executive board, if any.

The LEO Foundation is in compliance with this recommendation.

The board members generally do not perform any operating functions, as these are carried out by the LEO Foundation’s executive management and organisation. If, in exceptional circumstances, a board member is requested to perform specific operating functions, this shall be based on a board decision which specifically ensures appropriate allocation of responsibilities between the relevant member and the other members of the Board and management.

2.2.3 It is recommended that the financial statements disclose any transactions that the foundation has entered into with related undertakings. The information should include the nature of the relationship between the foundation and the related undertaking, the nature of the transaction and the amount of the transaction.

The LEO Foundation is in compliance with this recommendation.

Information on transactions with related undertakings (if any) can be found in the Foundation’s annual report.

2.3.1 It is recommended that the board of directors regularly, and at least every second year, assess and stipulate the competences that the board of directors needs to possess in order to best perform the tasks and responsibilities incumbent upon the board of directors.

The LEO Foundation is in compliance with this recommendation.

The board conducts annual board evaluations, including assessment of the board’s competence profile.   Every third year, an in-depth mapping the existing competencies within the board is made with the assistance of external facilitators, highlighting any areas where the board will need to strengthen its capacities.

2.3.2 It is recommended that the board of directors approve a structured, thorough and transparent process for selection and nomination of candidates for the board of directors, taking into account any right in the articles of association to make appointments.

The LEO Foundation is in compliance with this recommendation.

When new appointments are needed, the board establishes an ad hoc nomination committee to identify new candidates for the board. Based on the work in the committee, candidates are presented to the full board for discussion and approval.  All candidates are selected through an open and transparent process, supported by an executive search firm and in accordance with written procedures and established criteria concerning eligibility and independence. 

No members of the board are nominated or elected by any public authorities, organisations or other third parties.

2.3.3 It is recommended that members of the board of directors are appointed on the basis of their personal qualities and competences, taking into account the collective competences of the board.  When composing and nominating new members to the board, the need for introducing new talent should be weighed against the need for continuity and the need for diversity in relation to, inter alia, commercial and grants experience, age and gender.

The LEO Foundation is in compliance with this recommendation.

The professional competencies, skills and experience, as well as the personal qualities, of prospective members of the board play a pivotal role in connection with election (and re-election) of board members. Likewise, the board seeks to strike an appropriate balance between continuity and new inspiration on the board, as well as in relation to age and gender spread among the board members. 

2.3.4 It is recommended that both in the management commentary in the annual report and on the commercial foundation’s website, if any, there is an account of the composition of the board of directors, including its diversity, and that the following information is provided on each board member:

• the name and the position of the member,
• the age and gender of the member,
• date of original appointment to the board, whether the member has been reappointed, and expiry of the current appointment period,
• any special competences possessed by the member,
• other managerial positions held by the member, including positions on executive boards, boards of directors and supervisory boards and board committees in Danish and foreign foundations, enterprises and institutions, as well as other demanding organisation tasks,
• whether the member owns shares, options, warrants and similar in the foundation’s subsidiaries and/or associated companies,
• whether the member has been appointed by authorities/providers of grants etc., and 
• whether the member is considered independent. whether the member is considered independent.

The LEO Foundation is in compliance with this recommendation.

The information can be found on the Foundation’s website.

2.3.5 It is recommended that the majority of the members of the board of directors of the commercial foundation are not also members of the board of directors or executive board of the foundation’s subsidiary(ies), unless it is a fully-owned actual holding company.

The LEO Foundation is in compliance with this recommendation.

One out of seven members of the board (excluding employee-elected members) are also members of the board of directors of LEO Pharma A/S.

All members of the board are also members of the board of directors of the LEO Foundation’s fully-owned actual holding company, LEO Holding A/S.

2.3.6 It is recommended that the board of directors elect the chairman and the vice-chairman (if any) of the foundation for one year at a time. Re-election may take place.

The LEO Foundation is in compliance with this recommendation.

2.4.1 It is recommended that at least one third of the members of the board of directors (excluding employee representatives) are independent.

To be considered independent, this person may not, for example:

• be, or within the past three years have been, a member of the executive board or senior employee of the foundation or of an essential subsidiary or an essential associated company of the foundation,
• within the past five years have received larger emoluments, including distributions or other benefits from the foundation or a subsidiary or associated company to the foundation in other capacity than as member of the board of directors of the foundation,
• within the past year have had a significant business relationship (e.g. personal or indirectly as partner or employee, shareholder, customer, supplier or member of the executive management of companies with corresponding connection) with the foundation or a subsidiary or associated company of the foundation,
• be, or within the past three years have been, an employee or partner of the external auditor of the foundation or its subsidiaries,
• have been a member of the board of directors or executive board of the foundation for more than 12 years,
• be a close relative or in another way be very close to persons who are not considered as independent,
• be the founder or significant donor or contributor, 
• be a member of the board of directors of the foundation if the purpose of the foundation is to grant support to the board member’s family or others who are especially close to the board member,
• be a member of the management of an organisation, another foundation or similar, which receives or repeatedly within the past five years have received significant donations from the foundation, or 
• be a member of the management of an organisation, another foundation or similar, which grants or repeatedly within the past five years have granted significant donations to the foundation.

The LEO Foundation is in compliance with this recommendation.

Six out of seven members of the board (excluding employee representatives) are independent.

2.5.1 It is recommended that members of the board of directors be appointed for a minimum period of two years at a time and a maximum period of four years at a time. Reappointment can take place.

The LEO Foundation is in compliance with this recommendation.

The election period for members of the board elected under the articles of association (charter) of the foundation is two years. By law, the election period for employee-elected members is four years.

2.5.2 It is recommended that an age limit for members of the board of directors be set, which is published in the management commentary or on the foundation’s website.

The LEO Foundation is in compliance with this recommendation.

According to the articles of association (charter) of the foundation, the limit for membership is set at the age of 75 years.

2.6.2 It is recommended that once a year the board of directors evaluate the work and performance of the executive board and/or the administrator (where relevant) in accordance with predefined clear criteria and that the chairman reviews this with the person(s) concerned.

The LEO Foundation is in compliance with this recommendation.

The Foundation’s executive board consists of its CEO, who’s performance is evaluated on a yearly basis by the board.