Exhibit 1.2  Regulations of the
Board of Directors, its Committees and the Executive Committee of Novartis AG  (Organisationsreglement)


Novartis AG 4002 Basel, Switzerland  © December 2009,
Novartis AG


Table of ContentsRegulations of the Board of Directors, its
  Committees and the Executive Committee of Novartis AG
  3Section 1
  General Provisions
  5Section 2
  Board of Directors
  8Section 3
  Committees of the Board
  11Section 4
  Chairman and
  Chief Executive Officer, Vice Chairmen, Lead Director, Deputy Chief Executive
  Officer
  11Section 5
  Executive Committee
  12Section 6
  Internal Audit
  14Section 7
  Effectiveness, Amendments
  14Charter
  The Chairmans Committee of Novartis AG
  15Charter
  The Compensation Committee of Novartis AG
  17Charter
  The Audit and Compliance Committee of Novartis AG
  19Charter
  The Corporate Governance and Nomination Committee of
  Novartis AG
  25Charter
  The Risk Committee of Novartis AG
  [  ]Appendix
  Independence Criteria for the Board of Directors and
  its Committees
  28


Regulations
of the Board of Directors, its Committees and the Executive Committeeof Novartis AG  Based on Article 26
of the articles of incorporation of Novartis AG (the Articles of Incorporation),
the board of directors (the Board) promulgates the following regulations (the
Regulations).  These Regulations govern
the internal organization as well as the duties, powers and responsibilities of
the following executive bodies and persons of Novartis AG (the Company):  ·Board; ·Committees of the Board; ·Chairman of the Board; ·Vice Chairmen; ·Lead Director; ·Chief Executive Officer; ·Executive Committee (including its
sub-committees); and ·Internal Audit.  All references to
functions in these Regulations shall apply to both male and female persons.  Section 1  General
Provisions  Article 1   Duty of Care and Loyalty  Each member of the Board,
or the Executive Committee are under the duty to safeguard and further the
interests of the Company and its shareholders.  Article 2   Conflict of Interests  No member of the Board,
the committees of the Board, or the Executive Committee shall participate in
the deliberations and resolutions on matters which affect, or reasonably might
affect, the interests of that member or of a person close to that member.  Article 3   Confidentiality  Each member of the Board,
the committees of the Board, or the Executive Committee shall at all times keep
strictly confidential all information  except information which is already in
the public domain  relating to the Company and its affiliated companies (the
Group) which the member has learned during the exercise of his duties. This
obligation and duty shall continue even after the term of office of the member has
expired.  Business documents of the
Company and the Group shall be returned by members of the Board, the committees
of the Board, or the Executive Committee at the latest on expiry of their term
of office.  Article 4   No Representation of Members  A member of the Board,
the committees of the Board, or the Executive Committee who is not able to
participate in a meeting of the executive body may not be represented by
another member of the body or any other person.  Article 5   Quorum, Majority Requirements  Unless stated otherwise
in these Regulations, the quorum for any meeting of the Board, the committees
of the Board, or the Executive Committee shall be the majority of the duly
elected or appointed members.  Resolutions of the Board,
the committees of the Board, or the Executive Committee require the affirmative
majority of the votes cast.  In the event of a tie on
any issue, (i) in a committee of the Board, the full Board shall decide
the issue, and (ii) in the Executive Committee, the Chairman/CEO shall
decide the issue.  No quorum is required for
meetings at which the sole order of business is to deliberate and approve
resolutions providing


for the confirmation of
capital increases or the amendment of the Articles of Incorporation in
connection with an increase in the share capital.  The adoption of
resolutions on items not on the agenda requires the affirmative vote of at
least two thirds of the members of the Board, the committees of the Board, or
the Executive Committee present at a meeting.  Article 6   Meetings and Resolutions  Meetings of the Board,
the committees of the Board and the Executive Committee may be held in any
location determined by the Chairman/CEO or the chairperson of the respective
committees.  Meetings may also be held
and resolutions adopted by telephonic communication, or by means of a written
document circulated among all members of the Board, the committees of the
Board, or the Executive Committee respectively, unless a member of such body
requests oral deliberation.  Article 7   Secretary, Minutes  The Board, the committees
of the Board and the Executive Committee shall each appoint a secretary, who
need not be a member of the body.  The secretary of each
body shall keep the minutes of meetings, which shall contain all resolutions
adopted at the meeting. If meetings are held or resolutions passed by telephone
or in writing, the secretary shall record such resolutions in minutes and
communicate the outcome to the members of the respective body as soon as
practicable.  Article 8   Participation of Non-Members  Persons who are not
members of the Board, the committees of the Board, or the Executive Committee
may participate in meetings of such bodies if their expertise is required and
they have been invited by the chairperson of the body. Such persons shall not
vote in any resolutions.  Article 9   Application of General Provisions to other
Management Committees  Articles 18 shall apply
analogously to all other management committees of the Company and their
members.  Article 10   Business and Legal Separateness  The Company is a holding
company which directly or indirectly owns a global group of subsidiaries that
conduct business operations (the Business). To ensure proper functioning of
the Business in the interests of the Company and its shareholders and to comply
with various requirements imposed by relevant laws and regulatory authorities,
the Board shall supervise and, where necessary and appropriate, coordinate the
Business by providing overall guidance and support.  Each company in the Group
(Group Company) shall be legally separate from all other Group Companies and
shall manage its business independently. No Group Company shall operate the
business of another Group Company nor shall any Group Company act as agent of any
other Group Company.  Article 11   Divisions  The Business shall have
four operating divisions: Pharmaceuticals, Consumer Health, Generics and
Vaccines and Diagnostics.  Each division shall be
headed by a division head who shall be responsible for:  a)The management of the division and its
business units, if any.  b)The implementation within the division
and its business units, if any, of corporate policies and strategies approved
by the Board, the committees of the Board or the Executive Committee.  c)Proposals for new strategies and policies
and organizational changes for the attention of the Executive Committee.  d)The proper reporting by the division and
its business units, if any, to the Executive Committee, including the
implementation under the supervision of the Chairman/CEO and Chief Financial
Officer of appropriate disclosure controls and procedures and internal
controls.


Section 2  Board of
Directors  Article 12   Duties of the Board  The Board is the ultimate
executive body of the Company. It shall resolve all Business matters which are
not reserved to the authority of the general meeting of shareholders or to
other executive bodies of the Company by law, the Articles of Incorporation, or
these Regulations.  In particular, the Board shall have the following
duties:  a)The ultimate direction of the Business,
including, without limitation, the promulgation of resolutions and the giving
of necessary instructions or overall guidance and support regarding the
following matters:  ·the strategic direction of the Business; ·entry into new areas of activity and
withdrawal from existing areas of the Business; ·acquisitions and divestments of companies,
participations in companies or businesses, or incorporations or liquidations of
companies or businesses, if such matters are of fundamental significance to the
Business; ·the opening and closing down of sites of
fundamental significance to the Business; ·the initiation and settlement of legal
proceedings of fundamental significance to the Business; ·the setting of financial targets and
financial means to reach such targets; ·the promulgation of corporate policies, in particular
on financial matters, investments, personnel matters, leadership, compliance
with laws, corporate citizenship, communication and safety and environmental
protection and supervising managements compliance therewith; ·the adoption from time to time of further regulations
and instructions regarding the organization of the Business and the duties and
responsibilities of the executive bodies.  b)The determination of the organization of
the Company and the Group.  c)The manner of governance of the Company,
including the adoption from time to time of principles of corporate governance
that are in the best interests of the Company and its shareholders.  d)The structuring of the accounting system,
financial controls and financial planning.  e)The approval of the annual reports of the
Company and the Group and the corresponding financial results releases.  f)The appointment, removal, and
determination of duties and responsibilities of the persons entrusted with
management of the Company, in particular:  ·the Chairman and Chief Executive Officer; ·the members of the committees of the
Board; ·the members of the Executive Committee; ·the head of Internal Audit; ·such other persons as the Board may determine, from
time to time, as having significant impact on the Business.  g)the designation of those persons who shall have
signatory power for the Company and the manner in which such persons may sign
on behalf of the Company;  h)The ultimate supervision of the persons entrusted with
management of the Business, specifically in view of their compliance with laws,
the Articles of Incorporation, these Regulations and other applicable regulations
and instructions.  i)The preparation of the meetings of
shareholders and of the annual reports and such other documents and information
as are required for the meetings of shareholders, and to carry out the
resolutions adopted at the meetings of shareholders.  j)Notification of the court if liabilities
exceed assets.  k)The adoption of resolutions concerning an
increase of the share capital to the extent that such power is vested in the
Board (Article 651 paragraph 4 of the Swiss Code of Obligations), as well
as resolutions concerning confirmation of capital increases and related
amendments to the Articles of Incorporation.  l)The determination of the remuneration of
its members, based on the proposals of the Compensation Committee.  m)The determination of (i) whether or not a Board
member is independent, based on a proposal by the Corporate


Governance
and Nomination Committee, and (ii) whether or not the members of the Audit
and Compliance Committee meet the financial literacy and expertise standards,
both as stipulated by applicable law, regulation and listing requirements.  n)The approval of other business, if such business
exceeds the authority delegated from time to time by the Board to the
committees of the Board or to the Executive Committee.  Article 13   Delegation of Management  Where not stipulated as a
Board responsibility in law, the Articles of Incorporation or these
Regulations, the Board delegates to the Executive Committee the management of
the Business pursuant and subject to these Regulations.  Article 14   Meetings, Agenda  The Board shall meet at
the invitation of its Chairman as often as may be required.  Invitations for meetings
of the Board shall contain the agenda for the meeting and shall be issued at
least ten days in advance, except for urgent matters.  Also, any member of the
Board may request a meeting for a specific purpose or the inclusion of a
certain item on the agenda. Such requests must be submitted to the Chairman in
writing at least ten days prior to the meeting.  The Chairman shall take
the chair at the meetings of the Board.  The independent members
of the Board shall meet regularly in separate sessions.  Article 15   Right to Request Information  The members of the Board
have full and unrestricted access to management and employees of the Company
and the affiliated companies in the execution of their duties. This includes
the right to request information and inspection pursuant to Article 715a
of the Swiss Code of Obligations.  Article 16   Authorized Signatories  The only members of the
Board who shall be authorized to sign documents on behalf of the Company shall
be the members of the Chairmans Committee.  Article 16a -
Resignation of Board members  A member of the Board
shall tender his resignation to the Chairman/CEO upon a material change of his
or her business or professional affiliations or responsibilities.  Section 3  Committees
of the Board  Article 17   Committees of the Board  The Board shall form the
following permanent committees:  ·Chairmans Committee; ·Compensation Committee; ·Audit and Compliance Committee; ·Corporate Governance and Nomination
Committee; and ·Risk Committee.  The composition and
duties of these committees shall be as set forth in the applicable committee
charters, which are attached to these Regulations and incorporated herein by
reference.


Section 4  Chairman
and Chief Executive Officer, Vice Chairmen, Lead Director, Deputy Chief
Executive Officer  Article 18   Chairman and Vice Chairmen  The Board shall designate
one of its members as chairman (the Chairman). In addition to other duties
described in these Regulations and the Articles of Incorporation, the Chairman
provides leadership to the Board in its governance role.  In addition, the Board
may designate one or more vice chairmen.  Article 19   Lead Director  The Board shall elect a
lead director (the Lead Director), who shall have the following duties:  a)Ensure an orderly process in evaluating
the performance of the Chairman/CEO.  b)Chair the sessions of the independent
members of the Board.  c)Lead the independent members of the Board
in case of a crisis or matter requiring their separate consideration or
decision. Every independent Board member may request separate meetings of the
independent members if the need arises.  Article 20   Deputy Chief Executive Officer  The Chairman/CEO may
appoint a deputy, who shall be his legal representative in his function as
Chief Executive Officer of the Company in the event of his incapacity.  Section 5  Executive
Committee  Article 21   Members of Executive Committee  The executive committee
(the Executive Committee) is headed by the Chairman and chief executive
officer (the Chairman/CEO). It shall consist of such additional members as may
be appointed or removed by the Board from time to time. Each member of the
Executive Committee shall serve at the discretion of the Chairman/CEO.  The Chairman/CEO may
appoint or remove (non-voting) permanent attendees at the meetings of the
Executive Committee.  Article 22   Duties of Executive Committee  The Executive Committee
is responsible for the management of the Business and functions as a
coordination committee independent of any legal entity of the Group.  In particular, and
without limitation, the Executive Committee shall have the following duties:  a)Implement the strategies and policies
agreed upon by the Board.  b)Regularly assess the achievement of the targets for
the Business.  c)Prepare corporate policies, strategies
and strategic plans for the attention of and approval by the Board or its
committees.  d)Submit the following to the Board or to one of its
committees for approval or advice in accordance with such regulations and
standards as are promulgated by the Board from time to time:  ·appointments to and removals of associates
with material impact on the Business; ·capital investments, financial measures,
and the acquisition or divestiture of companies, participations and businesses
of material significance in accordance with such regulations and standards as
are promulgated by the Board from time to time; ·significant agreements with third parties
and engagement in new business activities; ·the revenue, financial, and investment
budgets of the Business and its divisions, business units and supporting
functions, including any addenda thereto.


e)Implement the
matters approved by the Chairmans Committee.  f)Prepare and
submit quarterly and annual reports for the attention of and approval by the
Board or its committees, and to keep the Board informed of all matters of
material significance to the Business.  g)Appoint and
promote senior management subject to such standards as shall be adopted by the
Board from time to time.  h)Implement
modifications to the organization of the Business to ensure efficient operation
of the Business and achievement of optimized consolidated results.  i)Promote an
active internal and external communications policy.  j)Ensure that
management capacity, financial and other resources are provided and used
efficiently.  k)Promulgate
guidelines, including guidelines for planning, controlling, reporting, finance,
personnel, information and other technologies.  l)Deal with such
other matters as are delegated by the Board to the Executive Committee from
time to time.  Article
23   Sub-committees of the Executive
Committee  The
Executive Committee may delegate to sub-committees duties as stipulated in
Article 22 above. The Chairman/CEO shall ensure proper reporting of all such
sub-committees to the Executive Committee or the Board as the case may be.  Section
6  Internal
Audit  Article
24   Duties of Internal Audit  The
Groups internal audit shall:  a)Carry out
operational and system audits, assisting the organizational units in the
accomplishment of objectives by providing an independent approach to the
evaluation, improvement, and effectiveness of their risk management and
internal control framework. All organizational units of the Group are subject
to audit.  b)Prepare reports
regarding the audits it has performed, and report to the Audit and Compliance
Committee and the Chairman/CEO material actual or suspected irregularities
without delay.  c)Perform such
other functions and audits as are assigned to it by the Board, the
Chairman/CEO, or the Audit and Compliance Committee from time to time.  Section
7  Effectiveness,
Amendments  Article
25   Effectiveness, Amendments  These
Regulations shall come into effect on 2 December 2009.  These
Regulations may only be amended or replaced by the Board.  Dr.
  Daniel Vasella
  Monika MattiChairman
  Corporate Secretary  Charter  The
Chairmans Committeeof Novartis AG


Mission
Statement  The
chairmans committee (the Chairmans Committee) will deal with business
matters falling within the authority of the board of directors (the Board)
that may arise in between meetings of the Board, will assist the chairman of
the Board and chief executive officer (the Chairman/CEO) in fulfilling his
responsibilities with respect to the stewardship of Novartis AG (the
Company), and will perform such other tasks as may be delegated to it by the
Board.  Organization  The
Chairmans Committee shall consist of three to five members of the Board: the
Chairman/CEO, the vice chairman or chairmen, and such other members as the
Board may elect. The members of the Chairmans Committee shall serve at the
discretion of the Board.  The
Chairman/CEO shall preside over the meetings of the Chairmans Committee.  The
Chairman/CEO shall convene a meeting of the Chairmans Committee as often as
required by the business of the Company, or if requested in writing by one of
its members.  Invitations
to meetings of the Chairmans Committee shall contain the agenda for the
meeting.  Roles
and Responsibilities  The
Chairmans Committee has the following duties:  1.Comment on
significant matters falling within the authority of the Board before the Board
makes decisions on such matters.  2.Deal with
business matters falling within the authority of the Board that may arise in
between meetings of the Board, including the ability to take preliminary and
required action on behalf of the Board in urgent cases and to inform the Board
of such matters and the actions taken.  3.Make
preparations for each meeting of the Board.  4.Recommend for
approval by the full Board appointments proposed by the Chairman/CEO for key
positions directly reporting to the Chairman/CEO.  5.Approve, upon
application by the Executive Committee, capital investments, financial
measures, and the acquisition or divestiture of companies, participations and
businesses of material significance in accordance with such regulations and
standards as are promulgated by the Board from time to time.  6.Submit to the
Board any matters which the Chairmans Committee deems appropriate, including
matters mentioned in subparagraph (5) above.  7.Deal with such
other matters as may be delegated to the Chairmans Committee by the Board from
time to time.  Effective:
12 December 2007  Charter  The
Compensation Committeeof Novartis AG  Mission
Statement  Pay
for performance is the guiding principle of the compensation strategy of
Novartis AG and its affiliates (the Group). The Group aims to reward those
associates who achieve competitive business results and exemplify our Group
values. The compensation strategy strives to strengthen the
performance-oriented culture and reinforce entrepreneurial behavior resulting
in contributions that motivated and dedicated associates make to sustain
superior business results.  The
compensation committee (the Compensation Committee) reviews on behalf of and
recommends to the board of directors (the Board) the Group compensation
policies and programs in the light of this compensation strategy. The
Compensation Committee also approves the employment contracts and the
individual compensation for selected key executives and will perform such other
tasks as may be delegated to it by the Board from time to time.  Organization  The
Compensation Committee shall consist of three to four members of the Board.
These members shall be independent in


accordance
with the independence criteria set forth in the Appendix.  The
chairman of the Board and chief executive officer (the Chairman/CEO) shall
not be a member of the Compensation Committee, but he may attend the sessions,
except when his compensation is being discussed and determined.  The
Board will designate one member of the Compensation Committee as its
chairperson.  The
Compensation Committee shall meet at least two times a year.  The
Compensation Committee shall have the authority to retain and terminate any
compensation consultant assisting in the evaluation of Board member or senior
executive compensation, and shall have authority to approve the consultants
fees and other retention terms. The Compensation Committee shall also have
authority to obtain advice and assistance from internal or external legal,
accounting or other advisors.  The
Compensation Committee shall regularly report to the Board on decisions and
deliberations of the Compensation Committee.  Roles
and Responsibilities  The
Compensation Committee shall have the following roles and responsibilities:  1.Recommend and
periodically review the Group compensation policies and programs for approval
by the Board.  2.Advise the
Board on the compensation of Board members.  3.Approve the
employment agreements (including substantive changes thereto and payments upon
termination) for the Chairman/CEO and the executives mentioned under
subparagraph (5) below.  4.Decide on the
variable compensation including special awards for the Chairman/CEO for the
past year based on the overall appraisal of his performance by the independent
members of the Board and decide on the base salary and the total target
compensation for the coming year based on all relevant factors, including his
objectives relevant to his compensation and market data.  5.Decide  based
on the achievement of financial and non-financial objectives  on the variable
compensation including special awards of the members of the Executive
Committee, global business unit heads, nominated key corporate executives and
other executives with a target total compensation in excess of USD 2 million
and decide on the base salary and target compensation for the new year taking
into account relevant market data.  6.Inform the
Board about policies, programs and key decisions as well as statistical
comparisons of compensation levels at key competitors.  7.Review and
reassess the adequacy of this charter annually and submit proposed changes to
the Board for approval.  8.Conduct an
annual self-evaluation of the Compensation Committees performance.  Effective:
12 December 2007  Charter  The
Audit and Compliance Committeeof Novartis AG  Mission
Statement  The
audit and compliance committee (the ACC) will assist the board of directors
(the Board) in monitoring (1) the integrity of the financial statements of
Novartis AG (the Company) and its affiliated companies (the Group), (2) the
external auditors qualifications and independence, (3) the performance of the
Groups internal audit function and external auditors, and (4) the compliance
by the Group with legal and regulatory requirements.  Organization  The
ACC shall consist of three to five members of the Board. The Board will
designate one member of the ACC as its chairperson.  The
members of the ACC shall be independent in accordance with the independence
criteria set forth in the Appendix.  Each
member of the ACC must be financially literate, as such qualification is
interpreted by the Board in its business


judgment.
At least one member shall be an audit committee financial expert. Such member
has (1) an understanding of generally accepted accounting principles and
financial statements, (2) the ability to assess the general application of such
principles in connection with the accounting for estimates, accruals and reserves,
(3) experience preparing, auditing, analyzing or evaluating financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of issues that can
reasonably be expected to be raised by the Groups financial statements, or
experience actively supervising one or more persons engaged in such activities,
(4) an understanding of internal control over financial reporting, and (5) an
understanding of audit committee functions.  The
ACC shall meet no less than four times a year. The ACC shall meet periodically
in separate executive sessions with management, the internal auditors and, but
not less frequently than quarterly, the external auditor, and have such other
direct and independent interaction with such persons from time to time as the
members of the ACC deem appropriate.  The
ACC may invite to its meetings Company management, internal auditors, external
auditors, and such other persons as the ACC deems appropriate in order to carry
out its responsibilities. The ACC shall exclude from its meetings anyone with a
personal interest in the matters to be discussed.  The
ACC shall regularly report to the Board on decisions and deliberations of the
ACC.  The
Chairman of the ACC shall coordinate the work of his committee with the
Chairman of the Risk Committee to the extent appropriate.  The
ACC shall have the authority to retain independent counsel and other advisers,
and to conduct or authorize investigations into any matters within the scope of
its responsibilities.  The
Company shall provide for appropriate funding, as determined by the ACC, for
payment of compensation to the external auditors and any outside advisors
engaged by the ACC.  Responsibilities  The
ACC has the following roles and responsibilities:  Regarding
External Auditors  1.Evaluate the
qualifications, performance and independence of the external auditors,
including considering whether the auditors quality controls are adequate and
the provision of permitted non-audit services is compatible with maintaining
the auditors independence, taking into account the opinions of management and
internal auditors.  2.Ensure rotation
of the audit partners of the external auditors at least every five years.
Consider whether, in order to ensure continuing auditor independence, it is
appropriate to adopt a policy of rotating the external auditing firm on a
regular basis. Set policies for the Companys hiring of employees or former
employees of the external auditors.  3.On behalf of the
Board, which has fully delegated this task to the ACC, (1) select and nominate
the external auditors for election by the meeting of the shareholders (pursuant
to mandatory Swiss company law), and (2) be directly responsible for the
supervision and compensation of the external auditors (including the resolution
of any disagreement between management and the external auditors regarding
financial reporting). The external auditors shall report directly to the ACC.  4.On behalf of
the Board, which has fully delegated this task to the ACC, pre-approve all
auditing services, internal control-related services and non-audit services
permitted under applicable statutory law, regulations and listing requirements
to be performed for the Group by its external auditor. The ACC shall establish
and maintain the necessary approval procedures.  5.Obtain and
review a report from the external auditors at least annually regarding (1) the
external auditors internal quality-control procedures, (2) any material issues
raised by the most recent quality-control review, or peer review, of the firm,
or by any inquiry or investigation by governmental or professional authorities
within the preceding five years respecting one or more independent audits
carried out by the firm, (3) any steps taken to deal with any such issues, and
(4) all relationships between the external auditors and the Group.  6.Discuss with
the external auditors the results of their audits, any unusual items or
disclosures contained in the audits and the matters required by the US
Statement on Auditing Standards No. 61, as revised, including the following:  ·the initial selection of and changes in significant
accounting policies; ·the methods used to account for significant or
unusual transactions and the effects of significant accounting policies in
controversial or emerging areas; ·the process utilized by management to formulate
significant accounting estimates and the basis for the auditors conclusions
regarding the reasonableness of these estimates;


·audit findings and recommendations, including audit
adjustments that either individually or in the aggregate have a significant
effect on the audit; ·the auditors responsibility for other information
presented with the audit results, such as a management report on financial
status; ·any disagreements with management, whether or not
satisfactorily resolved, concerning matters that individually or in the
aggregate may be significant to the Companys or the Groups financial status
or the auditors report; ·significant matters that were the subject of
consultations with other accountants; ·significant issues discussed with management with
regard to the initial or recurring retention of the auditor; and ·any serious difficulties encountered in dealing
with management during the performance of the audit.  Regarding
Internal Auditors  7.Review
periodically the adequacy of the organizational structure, budget and
appointment and replacement of the senior internal auditing executives.  8.Review the
significant reports to management prepared by the internal audit department and
managements responses.  9.Discuss with
the external auditor and management the internal audit departments
responsibilities, staffing and any recommended changes in the planned scope of
the internal audit.  Regarding
Financial Reporting  10.Review and discuss with management and the external
auditors the Companys and Groups quarterly and annual financial statements
(including the sections on Operating and Financial Review and Prospects) to
consider significant financial reporting issues and judgments made in
connection with the preparation of the Companys and Groups financial
statements, including any significant changes in the Companys or Groups
selection or application of accounting principles.  11.On behalf of the Board, which has fully delegated
this task to the ACC, review and approve the Companys and Groups quarterly
financial statements for the first three quarters of each calendar year and the
corresponding financial results releases. The Board remains responsible for the
approval of the annual financial statements of the Company and the Group and of
the corresponding financial results releases.  Regarding
Compliance with Laws  12.Review major issues regarding the status of the
Companys compliance with laws and regulations, as well as major legislative
and regulatory developments that may have significant impact on the Company.  13.Review the processes and procedures for managements
monitoring of compliance with local laws. To this end, the ACC will obtain and
review reports submitted at least annually by those persons the ACC has
designated as responsible for compliance with laws.  Regarding
Compliance with Policies  14.Review compliance by management of the Company with
those Company policies designated by the Board from time to time, including
policies on ethical business standards. To this end, the ACC will obtain and
review reports submitted at least annually by each of those persons the ACC has
designated as responsible for implementation of and compliance with such
policies and give guidance and direction on how the policies are to be
administered.  15.Supervise the Companys participation in the UN
Global Compact. To this end, the ACC will review periodic reports submitted by
those persons the ACC has designated as responsible for implementation of the
Companys participation in the UN Global Compact and compliance of the Company
with its undertakings with respect to the UN Global Compact.  Other  16.Review the financial literacy of each ACC member to
determine whether he or she meets the applicable legal standards and propose to
the Board the appropriate determination and its disclosure.  17.Establish procedures for (a) the receipt, retention
and treatment of complaints received by the Group regarding accounting,
internal accounting controls or auditing matters, and (b) the confidential,
anonymous submission by


employees
of the Group of concerns regarding questionable accounting or auditing matters.  18.Review disclosures made by the chief executive
officer and chief financial officer regarding compliance with their
certification obligations, including the Companys disclosure controls and
procedures and internal controls for financial reporting and evaluations
thereof.  19.Review such other matters in relation to the Groups
accounting, auditing, financial reporting and compliance with law and policies
as the ACC may, in its own discretion, deem desirable in connection with the
review functions described above.  20.Annually review and reassess the adequacy of this
charter and submit proposed changes to the Board for approval.  21.Conduct an annual self-evaluation of the ACCs
performance.  Limitation
of ACCs Role  While
the ACC has the responsibilities and powers set forth in this charter, it is
not the duty of the ACC to plan or conduct audits or to determine that the
Companys financial statements and disclosures are complete and accurate and
are in accordance with generally accepted accounting principles and applicable
rules and regulations. These are the responsibilities of management and the
external auditor.  Effective:
2 December 2009  Charter  The
Corporate Governance and Nomination Committee of
Novartis AG  Mission
Statement  The
Corporate Governance and Nomination Committee (CGNC) will assist the board of
directors (the Board) of Novartis AG (the Company) in fulfilling its
responsibilities with respect to (i) the determination of the appropriate size,
functions and needs of the Board, and (ii) the identification of individuals
who are qualified to become (or be re-elected as) Board members.  Organization  The
CGNC shall consist of three to five members of the Board. These members shall
be independent in accordance with the independence criteria set forth in the
Appendix.  The
Board will designate one member of the CGNC as its chairperson.  The
CGNC will meet no less than two times a year. Special meetings may be convened
as required.  The
CGNC shall regularly report to the Board on decisions and deliberations of the
CGNC.  The
CGNC may invite to its meetings other Board members, Company management and
such other persons as the CGNC deems appropriate in order to carry out its
responsibilities. The chairman of the Board and chief executive officer (the
Chairman/CEO) may attend the meetings as guest. The CGNC shall exclude from
its meetings anyone with a personal interest in the matters to be discussed.  The
CGNC shall have sole authority to retain and terminate any search firm to be
used to identify candidates for election to the Board, and shall have sole
authority to approve the search firms fees and other retention terms. The CGNC
shall also have authority to obtain advice and assistance from internal and
external legal, accounting or other advisors.  Roles
and Responsibilities  The
CGNC has the following roles and responsibilities:  In
General  1.Review
periodically the articles of incorporation of the Company (the Articles of
Incorporation) and the regulations of the board of directors, its committees
and the executive committee (the Regulations) and recommend to the Board


changes
thereto in respect of good corporate governance and fostering shareholders
rights.  2.Consult with
the Chairman/CEO in carrying out the duties of the CGNC.  3.Recommend such
other actions not set out below regarding the governance of the Company that
are in the best interests of the Company and its shareholders, as the CGNC
shall deem appropriate.  Board
Composition  4.Review the
composition and size of the Board in order to ensure the Board has the proper
expertise and consists of persons with sufficiently diverse backgrounds.  5.Determine the
criteria for selection of the Chairman/CEO, Board members and Board committee
members. The CGNC considers factors such as (i) personality, skills and
knowledge, (ii) diversity of viewpoints, professional backgrounds and
expertise, (iii) business and other experience relevant to the business of the
Company, (iv) the ability and willingness to commit adequate time and effort to
Board and committee responsibilities, (v) the extent to which personality,
background, expertise, knowledge and experience will interact with other Board
members to build an effective and complementary Board, and (vi) whether
existing board memberships or other positions held by a candidate could lead to
a conflict of interest  6.With the
participation of the Chairman/CEO, actively seek, interview and screen
individuals qualified to become Board members for recommendation to the Board.  7.Assess and
recommend to the Board as to whether members of the Board should stand for
re-election. For its assessment, the CGNC considers, among other things, age
limit and ability and willingness to commit adequate time to the Board and
committee matters.  8.In case a Board
member tenders his resignation in accordance with article 16a of the Board
Regulations, review the appropriateness of continued service on the Board of
such member.  9.Prepare and
annually review succession plans for the Chairman/CEO in case of resignation,
retirement, or death.  10.With the Chairman/CEO and the corporate secretary,
develop and periodically review an orientation program for new Board members
and an ongoing education program for existing Board members.  Board
Committees  11.With the Chairman/CEO, periodically review the
Regulations and the charters of the Board committees and make recommendations
to the Board for the creation of additional Board committees or a change in
mandate or dissolution of Board committees.  12.With the Chairman/CEO, periodically review the
composition of the Board committees. When doing so, the CGNC takes into account
whether a member of a Board committee is suitable for the tasks of his
respective Board committee.  13.With the Chairman/CEO, periodically review the
chairmanships of the respective Board committee.  14.Ensure that each committee conducts the required
number of meetings and makes sufficient reports to the Board on its activities
and findings.  Conflicts,
Other Directorships and Board member independence  15.Review directorships and consulting agreements of
Board members for conflicts of interest.  16.Instruct a Board member having an actual or
potential conflict of interest on how to conduct himself/herself in matters
before the Board which may pertain to such a conflict. The CGNC delegates the
authority to clear other actual and potential conflicts of interest a Board
member may have to the Chairman/CEO upon proposal of the secretary to the CGNC.
The secretary to the CGNC reports to the CGNC regularly on decisions taken by
the Chairman/CEO.  17.Annually submit to the Board a proposal concerning
the determination of the independent status of the Board members and the
corresponding disclosure.  Evaluation
of Performance


18.  Conduct an annual self-evaluation of the
CGNCs performance.  Effective:  2 December 2009  The Risk Committee  of Novartis AG  Mission Statement  The Risk Committee
(the RC) ensures that Novartis has implemented an appropriate and effectiverisk
management system and process.  It reviews Novartis risk portfolio and oversees
related actions implemented by management.  Organization  The RC shall consist of three to five members of the
Board. The Board will designate one member of the RC as the chairperson of the
RC.  The RC shall meet no less than four times a year and
have direct and independent interaction with such persons from time to time as
the members of the RC deem appropriate.  The RC may invite to its meetings members of the
management (including the Chief Financial Officer, the Group General Counsel,
the Head of Risk Management and the Head of Internal Audit), external auditors
and such other persons as the RC deems appropriate in order to carry out its
responsibilities. The RC shall exclude from its meetings anyone with a personal
interest in the matters to be discussed.  The RC shall regularly report to the Board on
decisions and deliberations of the RC.  The Chairman of the RC shall coordinate the work of
his committee with the Chairman of the Audit and Compliance Committee to the
extent appropriate.  The RC shall have the authority to retain independent
advisers for any matters within the scope of its responsibilities. The RC shall
obtain appropriate funding, as determined by the RC, for payment of
compensation to any outside advisors engaged by the RC.  Responsibilities  The RC has the following responsibilities:  1.Ensure that Novartis has implemented an
appropriate and effectiverisk management system and
process.  2.Ensure that all necessary steps are taken
to foster a culture of risk-adjusted decision-making without constraining


reasonable
risk-taking and innovation.  3.Approve guidelines and review policies
and processes.  4.Review with management, internal auditors
and external auditorsthe identification,
prioritization and management of the risks, the accountabilities and roles of
the functions involved with risk management, therisk portfolio and the related actions implemented by
management.  5.Inform the Board on a periodic basis on
the risk management system and on the most significant risks and how these are
managed.  6.Review such other matters in relation to
Novartis risk management as the RC may, in its own discretion, deem desirable
in connection with its responsibilities described above.  7.Keep itself up to date on risk management
best practices. The Head of Risk Management is expected to update the RC at
least once a year on developments in this area.  8.Annually review and reassess the adequacy
of this charter and submit proposed changes to the Board for approval.  9.Conduct an annual self-evaluation of the
RCs performance.  Limitation of RCs Role  While the RC has the responsibilities and powers set
forth in this charter,the design of the risk
management system and the risk management process (including the
identification, prioritization and management of the risks) is the
responsibility of the management.  Effective: 2 December 2009  Appendix  Independence
Criteria for the Board of Directors and its Committees  Independence of the
members of the Board of Directors  The Corporate Governance
and Nomination Committee (CGNC) annually submits to the full Board of
Directors a proposal concerning the determination of the independent status of
the Board members (Director). For purposes of such assessment, the CGNC
considers all relevant facts and circumstances of which it is aware. The
majority of Directors and any member of the Audit and Compliance Committee
(ACC Director) shall meet the independence criteria set forth below.  In order to be considered
independent, a Director shall not have any material relationship with Novartis
AG and any of its subsidiaries (Novartis) other than his/her service as a
director.  I.   Material Relationships  1.A Director will not be considered independent if  ·the Director or his/her immediate family
member (Family Member)(1) owns more than 10% of the stock of Novartis
AG; ·the Director has received direct
compensation (other than for former service as an interim Chairman or CEO or
other executive officer) of more than USD 120000 p.a. (other than dividends or
Board/Board Committee fees and retirement or deferred pay for prior service
[provided such compensation is not contingent in any way on continued service])
from Novartis within the last 3 years; ·a Family Member has received direct
compensation of more than USD 120000 p.a. (other than compensation received for
service as an employee [other than an executive officer]) from Novartis within
the last 3 years; ·the Director is, or has been within the
last three years, an employee of Novartis; ·a Family Member is, or has been within
the last three years, an executive officer of Novartis;


·the Director is a current partner or
employee of the auditor of Novartis (Auditor); ·a Family Member is a partner of the
Auditor or is an employee of the Auditor and works on Novartis audit; ·the Director or a Family Member is a
former partner or employee of the Auditor who personally worked on Novartis
audit during the last 3 years; ·the Director or a Family Member is, or
has been within the last three years, employed as an executive officer of an
enterprise while any of Novartis present executive officers serves or has
served on that enterprises compensation committee; ·an enterprise has made payments to or
received payments from Novartis for goods, property or services in an amount
that exceeds, in any of the last 3 fiscal years, the greater of USD 1 million
or 2% of the enterprises consolidated gross revenues, and ·the Director is a board member or employee
of that enterprise or holds more than 10% of the shares in that enterprise; or ·a Family Member is a board member or
executive officer or holds more than 10% of the shares in that enterprise.  
 (1) Family Member includes a persons spouse, parents,
children, stepchildren, siblings, mother-, father-, brothers-, sisters-, sons-
and daughters-in-law and anyone (other than domestic employees) who shares such
persons home.  2. In
addition to the independence criteria set above, an ACC Director shall not be
considered independent if  ·the ACC Director or his/her spouse, minor
child, minor stepchild or child or stepchild sharing the ACC Directors home
accepts any salary or consulting, advisory or other compensatory fee (other
than Board/Board Committee compensation) from Novartis; ·the ACC Director is a partner, a member,
an officer such as a managing director, executive officer or occupies a similar
position in an enterprise that provides advisory services such as accounting,
legal, investment banking or financial advisory services to Novartis.  If an ACC Director
simultaneously serves on the audit committees of more than 2 public companies
other than Novartis, then the CGNC must determine that such simultaneous
service would not impair the ability of such Director to effectively serve on
the ACC.  II.Immaterial Relationships  Unless the CGNC concludes
in its assessment to the contrary, a relationship is presumed not to impair the
independence of a Director if  ·the Director or a Family Member received
from Novartis, during the last fiscal year, personal benefits (other than the
coverage of travel expenses incurred by a Family Member in connection with
meetings of the Board of Directors) having an aggregate value of less than USD
5000; ·a Family Member is an employee but not an
executive officer of Novartis, unless the Family Member is an ACC Directors
spouse, minor child, minor stepchild or child or stepchild sharing the ACC
Directors home; ·the Director or a Family Member holds less
than 10% interest in any legal entity that has a relationship with Novartis; ·the Director or a Family Member is a
board member of a legal entity and that legal entity has made payments to or
received payments from Novartis for goods, property or services in an amount
that did not exceed, in any of the last 3 fiscal years, the greater of USD 1
million or 2% of the legal entitys consolidated gross revenues; ·the Director or a Family Member is a
board member or executive officer of a non-profit organization and Novartis
contributions to such organization did not exceed, in any of the last 3 fiscal
years, the greater of USD 1 million or 2% of the organizations consolidated
gross revenues; ·a legal entity in which the Director or a
Family Member is director, executive officer or employee has been indebted to
Novartis in connection with a transaction in the ordinary course of business or
in an amount that did not exceed USD 100000 during the last fiscal year; ·the Director or a Family Member serves on
the board of another enterprise at which an executive officer or another board
member of Novartis also serves as board member.  The enumeration of
relationships mentioned in this Section II is merely exemplary. The fact
that a particular relationship is not listed does not mean that the
relationship affects the independence of a Director.


Effective: 16
October 2008