Board of Directors

As of 31 December 2020

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 of Georg Fischer Ltd, provided it has not delegated these to other bodies. These are in particular:

Unless otherwise provided for by law or the Articles of Association of Georg Fischer Ltd, the Board of Directors delegates operational management to the CEO, 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 of Directors and the Executive Committee are defined by the Organization and Business Rules.

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.

The average term of office of Members of the Board of Directors is seven years. Seven of the eight Members of the Board of Directors (87.5%) have a term of office of less than twelve years. Members of the Board must resign their mandate at the Annual Shareholders’ Meeting following their 70 birthday. The term of office and age limits for Members of the Board of Directors are set out in the Organizational and Business Regulations.

At the 124th Annual Shareholders’ Meeting on 15 April 2020, Peter Hackel was elected as new Member of the Board of Directors. Roman Boutellier, due to reaching GF’s regulatory age limit, and Andreas Koopmann did not stand for re-election. After the Annual Shareholders’ Meeting, the Board of Directors was composed of eight members.

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 Chair from within its ranks once a year. Alongside the election of Yves Serra as Chairman of the Board of Directors, Hubert Achermann was elected by the Board of Directors as its Vice Chairman and Independent Lead Director on the day of the Annual Shareholders’ Meeting on 15 April 2020.

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.

The Board of Directors consists of six to nine Members. Each Member normally belongs at least to one of the three standing committees. When Members are elected, the focus is not only on their experience in executive and management functions, industry and technology markets, innovation, finance and accounting, risk management and law, but also on specific international relationships and regional market knowledge. The Board of Directors also aims to achieve a proper balance of skills and knowledge, taking into account the main operational focus of the Corporation, its international orientation, and the accounting requirements of listed companies. The Board of Directors broadly covers the required skills and knowledge. Expert knowledge in innovation and digitalization is being gradually expanded. The Board of Directors consists of members from five different countries. Two of the eight Members of the Board of Directors are female (quota of 25%).

Based on the Swiss Code of Best Practice for Corporate Governance from Economiesuisse all Members of the Board of Directors are non-executive. Seven Members of the Board of Directors are independent and one member of the Board of Directors has been a Member of the Executive Committee for less than three years. There are no significant business relationships between Members of the Board of Directors or the companies or organizations they represent and Georg Fischer Ltd or a Corporate Company.

Following the election of Yves Serra as new Chairman of the Board of Directors, the Board of Directors elected the new Vice Chairman Hubert Achermann additionally as Independent Lead Director. The Independent Lead Director, together with the other independent Members of the Board of Directors, will ensure efficient control and supervision in compliance with best Corporate Governance practices. By creating a strong position of Independent Lead Director with Hubert Achermann, GF will ensure strict compliance with broadly accepted Corporate Governance guidelines. The brief description of the role and responsibilities of the Independent Lead Director is available on the GF website. In 2020, the Independent Lead Director held one bilateral meeting with each Member of the Board of Directors as well as semi-annual bilateral meetings with the CEO and the CFO. In addition, the Independent Lead Director attended all meetings of the three standing Board Committees.

Pursuant to § 21 of the Articles of Association of Georg Fischer Ltd, a Member of the Board of Directors may at one and the same time hold no more than four additional mandates as a Member of the supreme managerial or governing body of listed legal entities and no more than ten additional mandates as a Member of the supreme managerial or governing body of not listed legal entities.

In addition, a Member of the Board of Directors may not hold more than ten mandates that he or she exercises by order of the company, in legal entities belonging to the Member’s own family, in a professional or industry association or in a charitable institution.

Mandates of associated companies or institutions, which are exercised in the function as a Member of the supreme managerial or governing body of a legal entity, together count as one mandate.

For new nominations, a requirements profile is drawn up based on a competence matrix, and suitable candidates are sought and contacted with the help of an external executive recruiter. The Nomination Committee is responsible for preparing and drawing up the requirement profile as well as for pre-selection. A focus is placed on completing the required competencies (e.g. digitalization) in the Board of Directors. Candidates also meet the Chairman and other Members of the Board of Directors personally before any nominations are proposed.

All Members of the Board of Directors are non-executive. Seven Members of the Board of Directors are independent and the Chairman of the Board of Directors has been a Member of the Executive Committee until the Annual Shareholders’ Meeting 2019. Zhiqiang Zhang (member of the Board of Directors since 2005) has been a Member of the Board of Directors for more than twelve years.

The Members of the three standing Board Committees are listed at the beginning of this chapter and in the separate section 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 Chairs of the individual committees also provide a verbal report at the next meeting of the Board of Directors and submit any proposals.

Decisions are made by the Board of Directors as a body. Members of the Executive Committee also take part in Board meetings for agenda items relating to the company’s business, but are not entitled to vote. Only the CEO 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 those attending 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. In the year under review, the Board of Directors held eight meetings. Of these, two were extraordinary meetings at which information was provided on the COVID-19 situation at GF and comprehensively on business developments. The annual strategy meeting lasted 1.5 days, five meetings lasted half a day, and two meetings lasted less than half a day. The average duration of the meetings was 6:03 hours. The dates of the regular meetings are generally set well in advance to enable all Members to attend personally. In the year under review, some or all of the meetings were held virtually. The attendance rate was 100%. The three standing Board Committees held a total of 17 meetings.

External consultants are brought in for their services when specific topics are involved. Further information is provided in the section on the Board Committees.

In 2020, the Board of Directors continued to work on implementing measures from the findings of the 2018 self-evaluation. A new survey was conducted in the fall of 2020, the results of which were discussed at the Board of Directors meeting in December 2020. Their findings will be implemented in the new reporting period.

The Audit Committee consists of three Members of the Board of Directors (see separate section Members of the Board of Directors). 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, and issues its opinions on transactions concerning equity and liabilities at Georg Fischer Ltd. The Audit Committee also decides whether 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 of Directors, the CEO, the CFO, the Head of Corporate Controlling and Investor Relations, the Head of Internal Audit, and a representative 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.

In the year under review, the Audit Committee held four ordinary and one extraordinary meetings, four of which lasted half a day, and one lasted two hours. The average meeting duration was 3:00 hours. As a focus topic for 2020, the Audit Committee has addressed the risks of cybercrime. All Members of the Audit Committee attended all five meetings.

The Compensation Committee consists of three Members of the Board of Directors (see separate section Members of the Board of Directors), who 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 internal and external compensation specialists about market data from comparable companies in Switzerland, in addition to publicly available data obtained on the basis of compensation disclosures. Furthermore, based on internal and external sources, common market practices and expectations of stakeholders are continuously evaluated by the Compensation Committee. In 2020, adaptations to the Long-Term Incentive plan (LTI) and to the Short-Term Incentive plan (STI) were discussed to support the achievement of the new Strategy 2025 from 2021 onwards, while duly taking into account the wishes of GF’s shareholders. These adaptations are disclosed in the Compensation Report. The Compensation Committee proposes to the Board of Directors the total amount of compensation to be paid to the entire Executive Committee and the CEO.

The Compensation Committee held four ordinary and one extraordinary meetings during the past fiscal year, each of which lasted one to two hours. The average meeting duration was 1:36 hours. All five Compensation Committee meetings were consistently attended by all of the Compensation Committee Members. Due to COVID-19, some meetings were conducted entirely or partially online.

The Nomination and Sustainability Committee consists of three Members of the Board of Directors (see separate section Members of the Board of Directors). 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 and Sustainability Committee is kept informed annually about succession planning for the Senior Management levels, the talent pipeline within Senior Management and the diversity situation. For specific high-level recruitments, services of headhunters were hired.

In mid-2020, the Board of Directors decided to integrate the topic of sustainability as a new part of the Nomination Committee and to rename the committee to the Nomination and Sustainability Committee. The Chairman of the Board of Directors is also the Chairman of the Nomination and Sustainability Committee.

The focus on sustainability is to advise the Board of Directors on the sustainability strategy, targets, initiatives and legislation regarding environment, social, and governance (ESG) topics and include the review of the annual Sustainability Report and supporting management in responding to stakeholders. 

In the year under review, the Nomination and Sustainability Committee held three ordinary and four extraordinary meetings, which lasted 1:21 hours on average. All Members of the Nomination Committee attended all seven meetings. The meetings are held separately in two parts for the Nomination and Sustainability topics and are attended by members of the Executive Committee, the Head of Corporate Sustainability, and other specialists from the Corporation. Two meetings were held on the subject of Sustainability in the new form of the Nomination and Sustainability Committee. Due to COVID-19, some meetings were conducted entirely or partially online.

The Board of Directors is informed in detail about business performance every month. The Members of the Board of Directors receive the monthly report. In addition to an introductory commentary on the current course of business, it contains the most important key figures for the course of business and the monthly closing as well as a preview of the next three months and the year-end. These key figures are broken down by Corporation, divisions, and Corporate Companies. The Executive Committee presents and comments on business performance and presents its assessment of business performance for the coming months at Board meetings. It also presents all important topics to the Board of Directors.

In addition, the Board of Directors regularly receives 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. Once a year, it discusses the Corporate Risk Officer’s report, the Corporation’s risk profile and is updated about the measures taken to minimize and control risk.

In mid-March 2020, GF introduced additional “COVID-19 Reporting” that included all corporate subsidiaries. Thanks to this additional data, the Executive Committee was promptly informed about the measures taken locally, the employee situation, and additional financial key figures (e.g. liquidity and sales). The CEO kept the Chairman of the Board of Directors informed of these findings on an ongoing basis. Similarly, the CEO reported to the full Board of Directors at ordinary and extraordinary meetings on the impact on operations and on the measures taken, both in terms of employee safety and business aspects.

The Chairman of the Board of Directors receives the invitations and minutes of the Executive Committee and Corporate Staff Meetings. The development of Strategy 2025 provided the Chairman of the Board of Directors and the Board of Directors with an additional opportunity for intensive exchange with management.

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 five years, depending on the risk assessment and based on a comprehensive audit program. In the year under review, 20 internal audits were conducted. The audit reports are reconciled with the management of the audited Corporate Companies or responsible functions and distributed to the line managers, the external auditor, the Executive Committee, the Chairman of the Board of Directors, as well as the Chairman 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 CEO and in this function reports to the General Counsel; he informs the CEO directly, if necessary. The CCO helps Corporate Companies comply with the law, internal directives, and the Corporation’s principles of business ethics in their business activities, in particular through preventative measures and training in the divisions along with information and advice to the Corporate Companies. The Executive Committee, in consultation with the CCO, defines priority issues. Furthermore, all GF employees have the possibility to report compliance violations anonymously through a special compliance e-mail address to the CCO. In line with the EU Directive on the protection of whistleblowers, appropriate systems will be implemented during the course of 2021. These systems will be accessible for all GF employees as well as any third party, and will replace the current e-mail address.

A number of compliance measures were implemented in 2020:

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 Management & Tax acts as the Chief Risk Officer (CRO) and, in this function, directly reports to the CEO. The CRO is supported in this task by a Risk Officer from each of the three divisions. Supplemented by internal experts of the corporate risk management, the risk officers under the leadership of the CRO constitute the Corporate Risk Council that 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, discuss measures to mitigate the risks, and define the actual top risks of each unit. Based on the results of the workshops, the risk report 2019 was prepared and approved by the Board of Directors in February 2020. A workshop of the Board of Directors was held in September 2020. The purpose of this workshop was to define the main risks to the Corporation from the perspective of the Board of Directors and to compare these with the risk assessment of the Members of the Executive Committee. The outcome of this workshop and the measures adopted to reduce or control the risks were summarized in the risk report 2020, which was approved by the Board of Directors in December 2020.

The handling of financial and operational risks is explained in the notes to the consolidated financial statements in note 3.6 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 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.