Sustainability Report 2010 Lek d.d.

Lek, a Sandoz Company – Company Identity Card 14 Governance and management 9 The Board of Management of Lek d.d. worked with the fol- lowing members: • Vojmir Urlep, President of the Board of Management • Zvonko Bogdanovski, Member of the Board of Management, Commercial Operations • Ksenija Butenko âerne, Member of the Board of Management, Legal Affairs • Markus Peter Delfosse, Member of the Board of Management, Technical Operations • Daniel Karrer, Member of the Board of Management, Finance • Darija Breãeviã, Member of the Board of Management till 18 April 2010, Human Resources • Samo Ro‰, Member of the Board of Management since 1 June 2010, Human Resources • Bojan Dolenc, Member of the Board of Management, Workers’ Director Lek Supervisory Board: • Peter Goldschmidt, Supervisory Board Chairman • Andreas Rummelt, Member of the Supervisory Board, Deputy Chairman till 5 July 2010 • Jeffrey George, Member of the Supervisory Board since 5 July 2010, Deputy Chairman since 4 November 2010 • Peter Ruprecht, Member of the Supervisory Board • Peter Kraljiã, Member of the Supervisory Board (independent associate member) • Aleksander Koren, Member of the Supervisory Board, Workers’ Representative • Uro‰ Urleb, Member of the Supervisory Board, Workers’ Representative The company Lek d.d. adheres to the methods and condi- tions for worker participation in management as provided by the Slovenian Worker Participation in Management Act. The employees enforce their rights to participation in ma- nagement individually and collectively through the Workers’ Council, Workers’ Assembly and their representatives in the company’s management bodies. The workers’ represen- tatives also act as Supervisory Board members, while the Workers’ Director also performs the function of Management Board member. In 2010, the employees proposed no initiatives to the Su- pervisory Board. However, they maintained direct contacts with the Workers’ Director who provided them with answers and assistance in finding suitable solutions with regard to job changes and working conditions, and gave them additional information. The Workers’ Council constitutes a form of collective and indirect employee participation in the company manage- ment. It consists of several committees (for general issues, for economical, status-related, human resources and social issues), while its members serve on various boards of the company (innovation, occupational safety, diversity and in- clusion, supervisory committee of Lek Trade Union). The Workers’ Council meetings are attended by the President of the Management Board, Workers’ Director and HR Director who respond to the questions and initiatives launched by the employees or provide the necessary additional information subsequently. In 2010, the issues raised most frequently in- cluded working hours, working conditions, business results and plans, holiday facilities, organizational changes and ad- ditional pension insurance. A report on the Supervisory Bo- ard meetings held in 2010 was also presented. The Workers’ Council member serving on the Occupational Safety Board took active part in the auditing procedure for workplace risk assessment. The Committee for Economic, Status-related, HR and Social Issues met to take a position with regard to the issues discussed, and presented its views at a Workers’ Council meeting (additional health insurance, selling appartments from the company’s housing fund). At employee meetings held at each of the sites, employees actively participated and put forward their questions which were answered on the spot by the President of the Manage- ment Board, Management Board members and respective departments’ representatives. 1.3 Overview of key stakeholders 10 Lek’s key stakeholders include the employees, company owners, patients, patient groups, government authorities, re- gulators, local communities, non-governmental institutions, professional associations, members of the Academy of Arts and Sciences, healthcare professionals, buyers, suppliers and media. We build our relationships with stakeholders on the basis of corporate citizenship principles. We endeavor to maintain an open dialogue with them, seeking for most appropriate forms of cooperation. The stakeholder structure complexity results from the diver- sity of stakeholders' interests and the wide spectrum of Lek's operations. Our understanding of and dialogue with the stakeholders are based on the following Novartis’ principles: commitment to patients, Lek people and local communities, respect of natural environment, and adherence to the ethical principles of corporate governance. The Novartis/Sandoz model of stakeholder relationship management enables us to play an active role in the life of the society and to upgrade the knowledge of our activity and stakeholders’ expectations. This serves us as a basis for our participation in social discussions where we present our views, being open for other people’s opinions, and improving the company’s performance through strategic adjustments of our corporate practice. Communications with key stakeholders Lek has an open dialogue with the public and other intere- sted parties, identifying the reasons for their concerns on the Lek Open House Day, promptly settling stakeholder com- plaints, and responding on a regular basis to the questions received. The company is open and proactive in building its relations with the media which serve as the voice of the pu- blic interest. The Lek Environmental Performance Report 2009, along with the contacts for additional information, was published at our website http://www.lek.si . We received no requests for additional disclosures of environmental impacts. 9 Disclosures GRI 4.1 - 4.4 10 Disclosures GRI 4.14 and 4.15