It’s official: weight-loss wonder drug Wegovy (also marketed as Ozempic) makes US celebrities shrink but makes the Danish economy grow. This week, the most amusing Oscars clickbait featured not the typical best- and worst-dressed actors, but instead celebrities who have experienced recent miraculous weight loss. The Daily Mail helpfully split this award category between those confirmed to have taken Wegovy, and others who have merely inexplicably and rapidly shrunk. Their collective weight loss is Denmark’s economic gain: this week, Denmark’s statistics agency confirmed the Danish economy grew 1.8 per cent in 2023 – but without the contribution of Wegovy’s owner, Novo Nordisk, it would instead have shrunk 0.1 per cent.

Free market ideologues can’t be pleased that Europe’s largest company isn’t ‘freely’ owned

Not everyone is happy. Novo Nordisk has become Europe’s most valuable company, worth over £475 billion. But it does not remotely conform to Anglo-Saxon models of acceptable corporate governance. The influential US economist Tyler Cowen complains ‘Novo Nordisk has a very large philanthropic fund, worth more than $100 billion (£85 billion) by one estimate…The mere option of spending some of that money in Denmark gives the company further influence over politics and public opinion.’ The effect, Cowen worries, might be ‘crony capitalism’ in a country of Denmark’s size.

Cowen would be even more upset had he properly understood Novo Nordisk’s structure. The company doesn’t ‘have’ the world’s largest philanthropic fund; instead, it is the captive of its philanthropic fund.  The Novo Nordisk Foundation, the world’s largest charity, owns only 28.1 per cent Novo Nordisk, but, thanks to dual share classes, maintains 77.1 per cent control. Novo’s structure has been in place for decades, has rendered it immune from acquisition attempts, and is, of course, absolute anathema to Anglo-Saxon shareholder democracy ideologues.

Novo’s setup isn’t at all unusual in Denmark, though, where many of the most valuable companies are controlled by similar ‘Industrial Foundations’ – independent charities which must use their profits for philanthropic purposes – including beer-maker Carlsberg, shipping giant Maersk and wind-turbine maker Vestas. (There is no exact UK equivalent of this model: the closest analogue might be the Scott Trust’s ownership of Guardian Media Group, if the latter also had outside shareholders).

For Denmark, thanks to all the philanthropic cash, there is a vast pot of non-government money available for scientific research. And, thanks to the effective poison pill on takeovers, pharmaceutical companies can take their sweet time developing new drugs. As Poul Rasmussen, the head of another Danish pharma industrial foundation, the Leo Foundation, has noted ‘it’s an ideal model for the pharmaceutical industry, where there will be ups and downs, and you need to be left in peace to do the development work.’

Unsurprisingly, there have been attempts to lob kryptonite at what is viewed from outside Denmark as an excessively cosy corporate market. Back in 2003, the EU launched its ‘Communication on Modernising Company Law and Enhancing Corporate Governance’ with the aim of strengthening shareholder rights and fostering business competitiveness. A potential aim was ‘one share one vote’ (1S1V), which would have unravelled Danish industrial foundation companies.

This attack was eventually fought off (‘in the Old World, many companies consider it too chancy to surrender control to shareholders’, sniffed the New York Times). But some major Danish companies not protected by foundation ownership were sold off, with predictable results. Danisco’s 2011 acquisition by DuPont is to Danes the equivalent of Kraft’s acquisition of Cadbury’s in the UK the previous year: a tale of broken promises, factory closures and years of hand-wringing afterwards. Novo Nordisk, protected by its foundation’s supermajority, took its time peacefully developing the future blockbuster Wegovy from 2012 onwards.

Free market ideologues can’t be pleased that Europe’s largest company isn’t ‘freely’ owned. But defenders of Danish Industrial Foundations would argue you can’t have a rich welfare state without wealthy companies, and the majority control of Danish Industrial Foundations has effectively prevented industrial and intellectual capital from migrating. The UK, meanwhile, has an unenviable track record of allowing its most exciting companies to be acquired by foreigners – most notably ARM Holdings, whose chips are in 95 per cent of all smartphones, by Japan’s Softbank in 2016, and artificial intelligence pioneer DeepMind by Google in 2014. Perhaps the pre-eminence of Novo Nordisk among European companies demonstrates the UK should take its lessons in corporate governance from Scandinavians, not Americans?