This document discusses trends in corporate structure and operations. It provides an executive summary and literature review on commercial structures. The document also includes a case study on Novartis' business unit structure and discusses trends in corporate affairs group structures and services. Finally, it lists the participant companies in the benchmark research on corporate affairs excellence and optimization.

1. Corporate Affairs Excellence: Optimizing Group Structure & Operations

5. Participants’ Job Titles Typically Director or Above Research participants included Vice Presidents, Executive Directors, Medical Executives, Directors and Managers. More than 69% of benchmark partners are directors and VPs and 31% are managers. All work directly or indirectly in Corporate Affairs functions. Executive Director Vice President Executive Director Vice President European Director Sr. Manager Director, Communications Sr. Director Director of Advocacy Senior Director Director Project Manager Director Medical Executive Director Manager, Director Manager Director Manager Director Manager Director Manager Copy and Production Officer Manager Associate Director Government Affairs Manager Assistant Director JOB TITLE JOB TITLE

6. Functional Perspectives Circumscribe Corporate Affairs Benchmark partners reflect functional experience that interacts directly or indirectly with the Corporate Affairs function. Since Corporate Affairs resides in different places across companies and sectors, diverse functions from Government Affairs, Corporate Affairs, Communications, Medical Affairs and Advocacy participated in this study. Government Strategy and Relations State Government Affairs Government Affairs Stakeholder Management Global Employee Communication and Brand Sales and Marketing Communication Global Advocacy Development Public Policy and Advocacy General Medicine Professional Relations, Public Affairs and Advocacy Customer Marketing Patient Services and Professional Relations CRM and Customer Experience Patient Advocacy Relations Corporate Communications Patient Advocacy Corporate Communications Multi Channel Communications / Marketing Corporate Communications Medical Affairs Corporate Affairs Medical Affairs Communications, Brand, Interactive, Creative Medical Affairs Communications and Government Affairs Marketing Communications Communications Healthcare Alliance Development Advocacy Relations / Corporate Communications GROUP OR FUNCTION GROUP OR FUNCTION

7. Hybrid Structure Most Common of Approaches The multi-industry study group reflected diverse approaches to corporate commercial structure. About one-third described their commercial operating structures as “hybrids.” This reflects various characteristics designed to help them deal with growth, scale, products and geographic complexity. About 47% of respondents said they evolved using some form of decentralization. Q4. Commercial Structure: Note the approach best describing your company's commercial operations structure (n=28) Commercial Operating Structure 20% 17% 10% 30% 23% Hybrid Centralized Decentralized by Product Families / Divisions Decentralized by Geography Decentralized by Therapeutic Area Percentage with Each Operating Structure 47% reflect some form of decentralization

8. Corporate Affairs Group Structure – Mid-Cap Pharma - Hybrid Approach - A Here, Corporate Affairs reports to the General Counsel with centralization at headquarters and staff decentralization to product families with different regional headquarters. Business units organized by therapeutic areas, product families, geography, product lifecycle and customer segment. Corporate Affairs supports three blockbusters and 10 smaller products.

9. About Best Practices, LLC Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning strategies of world-class companies Best Practices, LLC 6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517 www.best-in-class.com Telephone: 919-403-0251