Novo Nordisk’s shareholders have approved a sweeping board overhaul that reflects deepening fractures at the world’s most influential obesity-drug manufacturer, signalling that the company’s governance crisis is now inseparable from the competitive storm reshaping the weight-loss market. What began as a disagreement over governance norms has quickly merged with far broader anxiety about Novo’s strategic footing, its uncertain response to intensifying U.S. competition and its rapidly deteriorating share price.

The result is a leadership reset executed at unusual speed and at a scale rarely seen in large-cap European pharma, raising questions about how the reshaped board will navigate both the strategic imperatives of obesity therapeutics and the internal tensions that triggered the overhaul. The decisive shareholder vote gives Novo Nordisk’s controlling foundation greater authority at a moment when its commercial dominance is being challenged, yet the outcome also exposes how fragile the company’s consensus around strategy, governance and future direction has become.

Internal Power Struggles and Governance Fractures Behind the Board Shakeup

The board overhaul emerged from a months-long struggle between Novo Nordisk’s independent directors and the Novo Nordisk Foundation, which holds more than 75 percent of voting rights and ultimately executed the leadership intervention. The replacement of Chair Helge Lund with Lars Rebien Sørensen, a long-time company veteran and current chair of the foundation, represents more than a routine reshuffling: it signals the foundation’s decision to assert direct oversight during a period of strategic upheaval.

Sørensen’s return reopens a previous era of leadership, but the context is strikingly different, as Novo now faces structural challenges that were absent during his earlier tenure as CEO. The collapse of internal negotiations between the outgoing board and the foundation suggests profound disagreements not only over governance principles but also over the urgency and direction of strategic adjustments. Lund and other departing directors argued that governance norms—such as transparent decision-making and balanced checks on shareholder dominance—were being compromised, and that change could have been executed without destabilising public perception.

This governance conflict was compounded by broader market anxieties surrounding Novo’s performance in the weight-loss drug segment. Shareholders had grown increasingly concerned that the board under-estimated the competitive threat posed by Eli Lilly’s Mounjaro and Zepbound, both of which have delivered stronger high-dose efficacy than Novo’s flagship Wegovy. Sørensen later acknowledged that the previous board was “too slow in recognising the significance of the market changes in the United States,” implying strategic complacency that clashed with the foundation’s expectations.

The urgency expressed by the foundation reveals a belief that Novo’s traditional pace of corporate adaptation is incompatible with the unprecedented speed of today’s obesity-drug competition. For minority shareholders, however, the board overhaul has raised concerns that insufficient safeguards exist to prevent governance overreach. Norges Bank Investment Management and other large institutions signalled discomfort by abstaining or voting against the proposal, illustrating how the intervention—while strategically intended—has revived longstanding fears about the foundation’s dominance.

The board election was further unsettled by the withdrawal of Mikael Dolsten, Pfizer’s former R&D chief, who cited complications involving his previous employer. The decision removed a potential source of R&D depth and U.S. pharmaceutical expertise, weakening the board’s intended diversification just as the company confronts heightened competition and a more fragmented U.S. obesity market. Novo’s shares reacted sharply, falling more than 3 percent on the day and deepening a decline of over 50 percent since the start of the year.

For a company once valued as Europe’s largest by market capitalisation, the speed of decline has intensified scrutiny, with analysts describing Novo as “a conflicted company” grappling simultaneously with governance rupture, competitive disruption and a volatile investor base. The board overhaul thus reflects not only internal disagreements but also external market realities that have reduced Novo’s margin for strategic error at a time when its leadership cohesion is most in question.

Market Pressures, U.S. Competition and the Strategic Stakes of the Overhaul

The strategic rationale behind the board overhaul lies in the shifting landscape of the U.S. obesity-drug market, where Novo Nordisk has rapidly lost momentum. Eli Lilly’s competing therapies have set a new benchmark for efficacy and dosing expectations, driving U.S. physicians and payers to rethink treatment protocols and narrowing the clinical distinction that had previously favoured Novo’s offerings.

Compounding this pressure is the rise of U.S. compounding pharmacies producing lower-cost, unapproved versions of GLP-1 drugs, a development that has eroded market share and created a parallel supply channel outside Novo’s control. The U.S. market now accounts for more than half of Novo’s global revenue, making competitive slippage particularly damaging. The inability of the previous board to anticipate the pace of change, combined with an overreliance on legacy commercial advantages, contributed to the foundation’s decision to intervene decisively.

The board restructure also comes amid Novo’s broader struggle to articulate a unified strategy for responding to direct-to-consumer trends that are reshaping obesity care. Digital clinics, telehealth platforms and hormone-optimization programs have expanded aggressively, altering patient behaviour and creating new commercial intermediaries. While the foundation insists it is aligned with CEO Mike Doustdar’s transformation plan, internal disagreements suggest that consensus around Novo’s U.S. strategy had weakened considerably.

Some analysts question whether the new board brings the commercial expertise necessary to confront these shifts, noting that its composition may lack the breadth of U.S. consumer-health experience required to navigate complex reimbursement environments and disruptive retail channels. Deutsche Bank analysts have argued that the board, despite being reorganised for urgency, may paradoxically possess less large-pharma commercial depth than its predecessor.

Recent quarters have intensified pressure for strategic clarity. Novo’s latest earnings announcement fell short of expectations, forcing the company to narrow its full-year guidance and acknowledge slower growth in both Ozempic and Wegovy. Meanwhile, the company abruptly exited a heated bidding competition with Pfizer for Metsera, a biotech developing an experimental obesity therapy that analysts viewed as potentially important to Novo’s next-generation pipeline.

Such moves reinforced market perception that the company is simultaneously defending its current portfolio while struggling to position itself for future innovation cycles. This environment sharpens the stakes for the new board, which must not only support the CEO’s transformation initiatives but also restore stability to an organisation facing a convergence of operational strain, scientific competition and governance discord.

The overhaul also follows the abrupt ousting of former CEO Lars Fruergaard Jørgensen, who was blamed internally for Novo’s recent strategic missteps and operational bottlenecks, including supply constraints that limited product availability just as obesity-drug demand surged. His successor, Doustdar, has announced sweeping restructuring measures, including a global workforce reduction exceeding 10 percent. The new board must now oversee this reorganisation while addressing the dissatisfaction of minority shareholders and repairing the perception that Novo is operating without internal alignment.

The challenge is amplified by the sheer velocity of the weight-loss market: demand, competition, pricing structures and regulatory narratives are evolving faster than at any previous point in the modern pharmaceutical era. Novo’s governance overhaul therefore represents a gamble that a consolidated and more assertive leadership structure will offer the agility needed to defend market share and rebuild investor confidence. Whether this approach succeeds will depend on how effectively the board can stabilise internal governance, accelerate strategic decisions and respond to the intensifying commercial battle that defines the future of global obesity treatment.

(Adapted from CNBC.com)