Board of Directors

As of 31 December 2021

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 six years. All of the seven Members of the Board of Directors have a term of office of less than twelve years. Members of the Board of Directors must resign their mandate at the Annual Shareholders’ Meeting following their 72 birthday. The maximum term of office of twelve years and the age limit of 72 years for Members of the Board of Directors are set out in the Organizational and Business Regulations.

At the 125th Annual Shareholders’ Meeting on 21 April 2021, seven existing Members of the Board of Directors were confirmed. After sixteen years of service on the Board of Directors, Zhiqiang Zhang decided not to stand for re-election at the 2021 Annual Shareholders’ Meeting. After the Annual Shareholders’ Meeting, the Board of Directors was composed of seven 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 confirmed by the Board of Directors as its Vice Chairman and Independent Lead Director on the day of the Annual Shareholders’ Meeting on 21 April 2021.

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 on their experience in board, executive and management functions, legal, audit, compliance, overseas experience, sustainability, digitalization, innovation and gender. The Board of Directors also aims to achieve a proper balance of skills and knowledge, taking into account the main strategic focus of the GF Corporation, its international orientation, and the accounting requirements of listed companies. Expert knowledge in innovation and digitalization is being gradually expanded.

The Board of Directors consists of members from four different countries. Two of the seven Members of the Board of Directors are female (quota of 29%). On 22 October 2021, GF proposed Ayano Senaha for election to the Board of Directors at the next Annual Shareholders’ Meeting on 20 April 2022. Subject to acceptance for election as a Member of the Board of Directors, three of the eight Members of the Board of Directors will be female after the 2022 Annual Shareholders’ Meeting (quota of 38%). The skills and knowledge required of the Board of Directors are broadly covered, and are as follows:

Based on the Swiss Code of Best Practice for Corporate Governance from Economiesuisse all Members of the Board of Directors are non-executive. Six 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. After the 2022 Annual Shareholders’ Meeting, all members will be independent. 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 GF Corporate Company.

Following the election of Yves Serra as the 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 is ensuring 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 2021, 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.

The Chairman of the Board of Directors, supported by the Nomination and Sustainability Committee, is responsible for succession planning for the Board of Directors.

An individual job profile is created based on the future requirements of the Board of Directors, the results of the annual self-evaluation and the diversity and skills requirements listed in the skills matrix (in the separate section Diversity). An executive search agency that fulfills the criteria listed in the requirements specification is usually commissioned to initiate the search for a new Member of the Board of Directors. The Nomination and Sustainability Committee is responsible for creating the job profile and conducting the initial screening of candidates. Candidates are also interviewed by the Chairman and other Members of the Board of Directors personally before any nominations are proposed. The Nomination and Sustainability Committee makes a subsequent recommendation to the whole Board of Directors, which then decides who to propose for nomination to the shareholders at the forthcoming Annual Shareholders’ Meeting. The Head of Corporate HR provides support throughout the process.

The Members of the three standing Board Committees are listed at the beginning of this chapter. 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. In addition to the five regular meetings, two extraordinary meetings were held, at which issues relating to the governance of GF and succession planning for the Board of Directors were discussed and decided. The annual strategy meeting was held in the reporting year as part of the week-long trip to the US, was devoted to GF’s sustainability strategy, and was spread over four two-hour sessions. Of the five regular and two extraordinary meetings, five lasted half a day, two were shorter. The average duration of the meetings was 4:13 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 of the meetings were held virtually. The attendance rate was 100 percent. The three standing Board Committees held a total of eleven meetings. To this end, a temporary committee, which also included the Chairman and the Vice Chairman, held two meetings to discuss and deliberate on governance issues of GF.

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 line with the recommendations in the Swiss Code of Best Practice for Corporate Governance published by Economiesuisse, the Board of Directors carries out an annual self-evaluation of its work and that of its committees. The Board then discusses the results of the self-evaluation. The Chairman of the Board of Directors also conducts a structured bilateral meeting with each Member of the Board of Directors. After every meeting of the Board of Directors, its process and the discussions are evaluated so that any potential improvements can be identified and implemented.

In 2021, the Board of Directors again conducted a yearly self-evaluation, the results of which were discussed at the Board of Directors meeting in December 2021. Their findings will be implemented in the new reporting period.

The Audit Committee consists of three Members of the Board of Directors.

In the year under review, the Audit Committee held four ordinary meetings, which lasted 3:00 hours on average. As a focus topic for 2021, the Audit Committee has addressed the activities in the area of mergers and acquisition (M&A). All Members of the Audit Committee attended all four meetings. As a rule, the Chairman of the Board of Directors, the CEO, the CFO, the Head of Corporate Controlling, the Head of Internal Audit, and the representatives of the external auditor also take part in the meetings.

The Audit Committee 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. It also focuses on ensuring cybersecurity processes and assessing due diligence processes in M&A transactions. The Audit Committee also decides whether the GF Annual Report, comprising the consolidated financial statements of the GF Corporation and the financial statements of Georg Fischer Ltd can be recommended to the Board of Directors for presentation to the Annual Shareholders’ Meeting.

At the request of the Audit Committee, the external auditor also provides information on current questions related to upcoming changes in accounting and legal amendments.

The Compensation Committee consists of three Members of the Board of Directors, who are elected on a yearly basis by the Annual Shareholders’ Meeting.

In the year under review, the Compensation Committee held three ordinary meetings, each of which lasted one to two hours. The average meeting duration was 1:10 hours. All three Compensation Committee meetings were consistently attended by all of the Compensation Committee Members. In addition, the CEO and the Head of Corporate HR and, if necessary, the Head of Corporate Compensation & Benefits attend the meetings. Due to COVID-19, some meetings were conducted entirely or partially online.

The Compensation Committee 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 2021, no adaptations to the Long-Term Incentive plan (LTI) and to the Short-Term Incentive plan (STI) were undertaken, which were already decided and communicated in 2020. In 2021, a detailed benchmark analysis of the compensation of the Board of Directors was carried out in cooperation with an external consulting firm and corresponding adjustments were resolved as of the 2021 Annual Shareholders’ Meeting. 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 Nomination and Sustainability Committee consists of three Members of the Board of Directors. The Chairman of the Board of Directors is also Chairman of the Nomination and Sustainability Committee.

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.

In the year under review, the Nomination and Sustainability Committee held three ordinary and one extraordinary meetings, which lasted 2:00 hours on average. All Members of the Nomination and Sustainability Committee attended all four meetings. The meetings are held separately in two parts for the Nomination and Sustainability topics. In addition to the Members of the committee, the CEO and the Head of Corporate HR are present during the Nomination session, while the CEO, the CFO, the Head of Corporate Sustainability, and other specialists from the GF Corporation attend the Sustainability session. Due to COVID-19, some meetings were conducted entirely or partially online.

The focus in the area of nominations is on supporting the Board of Directors with succession planning and the selection of suitable candidates for the Board of Directors and the Executive Committee. The CEO and Head of Corporate HR inform the Nomination and Sustainability Committee annually about succession planning at the Senior Management levels, the talent pipeline within Senior Management, and the diversity situation. For specific recruitments at the Board of Directors and Executive Committee level, services of headhunters are hired (see separate section Board refreshment and succession planning).

The committee’s focus in the area of sustainability is on advising the Board of Directors on the sustainability strategy, targets, initiatives, and legislation relating to environment, social, and governance (ESG) topics and includes the review of the annual Sustainability Report and supporting management in responding to stakeholders.

In the 2021 reporting year, the committee’s main focus was to draft the Sustainability Strategy, and develop the sustainability targets and the associated measures. The entire Board of Directors also worked intensively on the Sustainability Strategy. By setting this issue as a priority in the first year of the new five-year strategy, the Board of Directors emphasized that sustainability is fundamentally important to all areas of the business. In the reporting year, corporate and division meetings about the Sustainability Strategy were held as part of the Board of Directors’ one-week trip to the US.

In the year under review, GF also conducted the mandatory equal pay analysis in Switzerland with a certified external partner using the well accepted L&M-Aba R® method. The outcome confirms compliance with GF’s internal equal pay for equal work pay practices and guidelines. The analysis is currently verified by an independent external auditor. GF will provide information about the outcome of the audit in its next report.

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 GF Corporation, divisions, and GF 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 GF 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 GF Corporation as a whole. Once a year, it discusses the Corporate Risk Officer’s report and the GF 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 about the impact on operations and 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 the Sustainability Strategy 2025 provided the Chairman of the Board of Directors and the Board of Directors with an additional opportunity for in-depth discussions with management. Where circumstances allowed, the Board of Directors and the Chairman of the Board of Directors also visited several companies and customers. In 2021, the Board of Directors held a meeting with a GF Corporate Company in Switzerland and visited GF Corporate Companies and customers from all three divisions during a one-week trip around the US.

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, GF 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, 49 internal audits were conducted. The audit reports are reconciled with the management of the audited GF Corporate Companies or responsible functions and distributed to the line managers, the external auditor, the Executive Committee, the Audit Committee, as well as the Chairman of the Board of Directors. 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. During the year, the Head of Internal Audit informs the Audit Committee of any changes to the audit plan and of the progress of planned audits. 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 GF Corporate Companies comply with the law, internal directives, and the GF 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 GF Corporate Companies. The Executive Committee, in consultation with the CCO, defines priority issues. Furthermore, all GF employees have the possibility to report compliance violations also anonymously to the CCO. In line with the EU Directive on the protection of whistleblowers, an additional reporting channel was implemented in 2021, which complements existing systems. These reporting channels for anonymous reports are accessible to all GF employees and third parties. 

A number of compliance measures were implemented in 2021:

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, reports directly 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 once 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. The results of these discussions were presented to the Board of Directors during its risk management workshop in November 2021. The purpose of this workshop was also to define the main risks to the GF 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 2021, which was approved by the Board of Directors in December 2021.

More generally, the Board decided to extend the Audit Committee Charter to overall risk management in order to deepen this topic at the Board level.

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.