Board of Directors
The Board of Directors has ultimate responsibility for supervising and monitoring the management of Georg Fischer Ltd. The Board of Directors is responsible for all matters vested to it by the law or the Articles of Association, provided it has not delegated these to other bodies. These are in particular:
- –decisions on corporate strategy and the organizational structure
- –appointing and dismissing members of the Executive Committee
- –organizing finance and accounting
- –determining the annual and investment budgets
Unless otherwise provided for by law or the Articles of Association, the Board of Directors delegates operational management to the Chief Executive Officer, who is assisted in this task by the Executive Committee. The extent to which competencies are delegated by the Board of Directors to the Executive Committee and the nature of the cooperation between the Board and the Executive Committee are defined by the Organization and Business Rules.
All members of the Board of Directors are non-executive. There are no significant business relationships between the members of the Board or the companies or organizations they represent and Georg Fischer Ltd or a Corporate Company.
Elections and term of office
As per § 16.2 of the Articles of Association of Georg Fischer Ltd, the members of the Board of Directors have to be elected individually, and their term of office ends at the next Annual Shareholders’ Meeting. Re-election is possible.
When selecting Board members, particular emphasis is placed on entrepreneurial experience, relevant expertise, or particular international ties. The Board of Directors also aims to achieve a proper balance of competence and knowledge, taking into account the main operational focus of the Corporation, its international orientation, and the accounting requirements of listed companies. Members of the Board must resign their mandate at the Annual Shareholders’ Meeting following their 70th birthday.
At the 120th Annual Shareholders’ Meeting on 23 March 2016, Riet Cadonau was elected as
new member of the Board of Directors. Ulrich Graf did not stand for re-election.
Internal organizational structure
Pursuant to § 16.3 of the Articles of Association of Georg Fischer Ltd, the Annual Shareholders’ Meeting elects a member of the Board of Directors as its Chairman for the period of one year until the next ordinary Annual Shareholders’ Meeting. Re-election is possible.
With the exception of the election of a Chairman of the Board of Directors, who is elected by the Annual Shareholders’ Meeting, the Board of Directors constitutes itself by electing a Vice Chairman from within its ranks once a year. Alongside the election of Andreas Koopmann as Chairman of the Board of Directors, Gerold Bührer was elected by the Board of Directors as its Vice Chairman on the day of the Annual Shareholders’ Meeting on 23 March 2016.
In addition, pursuant to § 20.1 of the Articles of Association of Georg Fischer Ltd, the Annual Shareholders’ Meeting elects the members of the Compensation Committee.
Areas of responsibility
The members of the three standing Board Committees are listed in the separate chapter Members of the Board of Directors. The Board Committees provide preliminary advice to the Board of Directors and do not make any definitive decisions. They discuss the issues assigned to them and make proposals to the Board of Directors as a whole. The CEO attends the meetings of the Board Committees, but is not entitled to vote. Minutes of the committee meetings are sent to all members of the Board of Directors. The Chairmen of the individual committees also make a verbal report at the next meeting of the Board of Directors and submit any proposals.
Work methods of the Board of Directors
Decisions are made by the Board of Directors as a body. Members of the Executive Committee also participate in Board meetings for agenda items relating to the company’s business, but are not entitled to vote. Only the Chief Executive Officer is present when personnel topics are dealt with. Personnel topics affecting him directly are treated in his absence. Invitations to Board meetings list all the items that the Board of Directors, a Board Committee, or the CEO wish to discuss. All participants in a Board meeting receive detailed written material on the proposals in advance.
The Board of Directors meets at least four times a year under the leadership of its Chairman. During the year under review, it met six times: one meeting lasted less than two hours, four meetings lasted less than a day, and the strategy meeting lasted two days, including the visit of a major GF plant. The dates of the regular meetings are generally set well in advance to enable all members to attend personally. In the year under review, the attendance rate was 100%. The three standing Board Committees met a total of 13 times.
External consultants are called on for their services when specific topics are involved. Further information is provided in the section on the Board Committees.
In 2016 the Board of Directors
conducted a self-assessment. The results
were discussed and measures agreed to further optimize the work done by the
Board of Directors.
The Audit Committee consists of three Board members. It supports the Board of Directors in monitoring accounting and financial reporting, supervises the internal and external audit function, assesses the efficiency of the internal control system including risk management and compliance with legal and statutory provisions, acknowledges the sensitivity analysis of the pension funds of Georg Fischer Ltd, and issues its opinions on transactions concerning equity and liabilities at Georg Fischer Ltd. The Audit Committee also decides whether or not the consolidated financial statements and those of Georg Fischer Ltd can be recommended to the Board of Directors for presentation to the Annual Shareholders’ Meeting.
As a rule, the Chairman of the Board, the CEO, the CFO, the Head of Corporate Controlling and Investor Relations, the Head of Internal Audit, and representatives of the external auditor also take part in the meetings. At the request of the Audit Committee the external auditor also provides information on current questions related to the financial reporting requirements and financial issues.
During the business year just ended, the Audit Committee held five regular and one extraordinary meeting, four of which lasted half a day, and the other two lasted about one hour.
The Compensation Committee consists of three Board members, which are elected on a yearly basis by the Annual Shareholders’ Meeting. It supports the Board of Directors in setting compensation policy at the highest corporate level. It uses knowledge of external compensation specialists about market data from comparable companies in Switzerland, in addition to publicly available data obtained on the basis of compensation disclosures. Comparable industrial corporations headquartered in Switzerland and the industrial market of Switzerland were used as a basis. In the reporting year, adaptations decided in 2015 regarding the short-term incentive plan (STI) of the Corporation as well as the long-term incentive plan (LTI) were implemented. The Compensation Committee proposes to the Board of Directors the total amount of compensation to be paid to the entire Executive Committee and the Chief Executive Officer. The Compensation Committee held four meetings during the past fiscal year, each of which lasted about one to an hour and a half.
The Nomination Committee consists of three Board members. It supports the Board of Directors in succession planning and assists in the selection of suitable candidates for the Board of Directors and the Executive Committee. The Nomination Committee is kept informed annually about succession planning for the Senior Management levels, about the talent pipeline at the Senior Management and the diversity situation. In the year under review, the Nomination Committee held three meetings, which lasted an hour on average.
Information and control instruments
The Board of Directors is informed in depth about business performance every month. The members of the Board receive the monthly report, which contains current information concerning business performance and the financial statements of the Corporation, the divisions, and Corporate Companies together with a detailed commentary. The Executive Committee presents and comments on business performance and tables all important matters at the Board meetings. It also presents its assessment of business performance for the coming months.
In addition, the Board of Directors receives regularly the forecast containing the expected figures at year-end. Once a year, the Board of Directors receives and approves the budget of the Corporation and the divisions for the following year. The Board of Directors holds as a general rule a two-day meeting once a year to discuss the strategies of the divisions and the Corporation as a whole.
The Chairman of the Board of Directors attends the Corporate Convention of the senior management and the Executive Committee’s planning meeting and is a regular attendee at other corporate management meetings. The Chairman of the Board of Directors and the CEO inform and consult each other regularly on all business matters that are of fundamental importance or have far-reaching ramifications. The Chairman of the Board receives the invitations and minutes of the Executive Committee and Corporate Staff Meetings. He visits Corporate Companies on a regular basis to see their operations in person and how they are implementing the Corporation’s strategy. In 2016, he visited Corporate Companies in Europe and in Asia.
Internal Audit reports to the Chairman of the Audit Committee operationally and to the CFO administratively. Based on the audit plan approved by the Audit Committee, Corporate Companies are audited either annually or every two to three years, depending on the risk assessment and based on a comprehensive audit program. In the year under review, 37 internal audits were conducted. The audit reports are reconciled with the management of the audited Corporate Companies and distributed to the line managers, the external auditor, the Executive Committee, the Chairmen of the Board of Directors, and of the Audit Committee. Audit reports with significant findings are presented to and discussed in the Audit Committee.
Internal Audit ensures that all discrepancies arising in internal and external audits are addressed and submits a report to the Executive Committee and the Audit Committee. The Head of Internal Audit prepares an annual report, which is discussed by the Executive Committee and the Audit Committee. He also serves as the secretary of the Audit Committee.
The Service Center Law & Compliance informs the Board of Directors and the Executive Committee about legal issues and significant changes to the law. The Corporate Compliance Officer (CCO) is appointed by the Chief Executive Officer and in this function reports to the General Counsel; he informs to the CEO directly, if necessary. Especially through preventive measures and training in the divisions along with information and advice to the Corporate Companies, the CCO contributes that the Corporate Companies comply with the law, internal directives, and the Corporation’s principles of business ethics in their business activities. The Executive Committee, in consultation with the CCO, defines priority issues.
A number of compliance measures were implemented in 2016:
- –further implementation of the “Compliance Agreement for Intermediaries” as a guideline for GF business partners who act in the name or interest of Corporate Companies within the GF Corporation
- –internal e-learning programs
were conducted on anticorruption, competition, and cartel law as well as for export
controls and economic sanctions for totally about 1ʼ350 employees
- –training courses on antitrust law, anticorruption, export controls, and/or other compliance topics at various Corporate Companies
- –ongoing advice and support for general compliance topics, labor law, and for internal revisions
- –continuation of specific compliance measures for intermediaries in China (e.g. ongoing checks regarding the appropriateness of compensation paid to intermediaries as well as examination of their ownership structure so as to avoid conflicts of interests)
- –further implementation of a web-based system for the prevention of business with sanctioned persons and organizations
- –further implementation of the function “Compliance Agents” (carried out by the Business Unit Controllers) for risk assessment and internal control
Code of Conduct of GF:
The Board of Directors and the Executive Committee attach great importance to the thorough handling of risks in the areas of strategy, finance, markets, management and resources, operations, and sustainability. The Head of the Service Center Risk, Tax & IP Services acts as the Chief Risk Officer (CRO) and, in this function, directly reports to the CEO. The CRO is supported by a non-executive risk officer of each division. Supplemented by internal experts of the corporate risk management, the risk officers under the leadership of the CRO constitute the Corporate Risk Council which met twice during the year under review. In addition, the CRO conducted workshops with the management of the three divisions as well as with the Executive Committee to analyze the risk situation, to discuss measures to mitigate the risks, and to define the actual top risks of each unit. Based on the results of the workshops, a risk report was prepared which was reviewed and approved by the Board of Directors in September.
The handling of financial and operational risks is explained in the Financial Report in the separate chapter Risk management.
The Board of Directors evaluates and assesses the performance of the Executive Committee and its members at least once a year in the absence of the Executive Committee members. The Chairman of the Board of Directors must approve any appointments of Executive Committee members to external Boards of Directors or to high-level political or other public functions.