Corporate Governance

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3. Board of Directors

3.1 Members of the Board of Directors

Hans-Peter Zehnder

Chairman of the Board

Swiss citizen, born 1954
first elected 1988

Executive member until 2018
Chairman of the Board (since 1993)
Studied economics (doctorate) at the University of St. Gallen (Switzerland)
1981–1984 Gebr. Bühler AG (Switzerland)
Since 1985 member of the Group Executive Committee of Zehnder Group
1986–1988 head of the instrument division
1988–1991 head of the radiator division
1988–1992 Vice Chairman of the Group Executive Committee
1993–31.10.2014 and 5.2.–31.12.2018 Chairman of the Group Executive Committee
Member of the Board of Directors of AZ Medien AG (Switzerland); CH Media AG (Switzerland); R. Nussbaum AG (Switzerland); and Lagerhäuser der Centralschweiz AG (Switzerland)
Representative of the Zehnder family

Jörg Walther

Vice Chairman of the Board

Swiss citizen, born 1961
first elected 2016

Non-executive member
Chairman of the Audit Committee
1989 Lic. iur. at the University of Zurich (Switzerland)
1990 admitted to the bar
1993 post-graduate certificate in European Economic Law at the University of St. Gallen (Switzerland)
1999 MBA University of Chicago (USA), Booth School of Business
1991–1995 Danzas Management AG, Legal Counsel/General Counsel and Head Legal Services
1995–1998 ABB Schweiz AG, Senior Corporate Counsel
1999–2001 ABB Asea Brown Boveri AG, Group Vice President M&A
2001–2009 Novartis International AG, Senior Corporate Counsel, Global Head Legal M&A and Antitrust, member of the Group Legal Executive Committee
Since 2010 Partner at Schärer Attorneys at Law, Aarau (Switzerland)
2010–2012 Resun AG, General Counsel and Head Corporate Services, member of the Executive Committee
Member of the Board of Directors and member of the Audit Committee of SFS Group AG, HUBER+SUHNER AG, AEW Energie AG (Vice Chairman); member of the Board of Directors of Swiss Steel Holding Ltd, Kraftwerk Augst AG, Immobilien AEW AG, Proderma AG (Chairman)
At no time was he a member of the Group Executive Committee of Zehnder Group AG or of any of its subsidiaries.
Until end of 2020, he provided Zehnder Group AG and its subsidiaries with legal advice on commercial matters. He has no significant business relations with Zehnder Group AG or with any of its subsidiaries.

Urs Buchmann

Member of the Board

Swiss citizen, born 1957
first elected 2010

Non-executive member
Member of the Compensation Committee
Member of the Audit Committee
Studied law (doctorate) at the University of Bern (Switzerland)
Long-term career in corporate and investment banking in Asia, and for institutional customers Asia Pacific
Since 1.1.2021 Vice Chairman of the Hong Kong subsidiary of a leading international bank
Since 31.12.2017 member of the Board of Directors of Swiss Re Asia Pte. Ltd. (Singapore)
At no time was he a member of the Group Executive Committee of Zehnder Group AG or of any of its subsidiaries.
He has no significant business relations with Zehnder Group AG or with any of its subsidiaries.

Riet Cadonau

Member of the Board

Swiss citizen, born 1961
first elected 2013

Non-executive member
Chairman of the Compensation Committee
Master of Arts in economics and business administration from the University of Zurich (Switzerland)
Advanced Management Programme at INSEAD (France)
1990–2001 various management positions at IBM Switzerland, lastly as a member of the Management Board and Director of IBM Global Services
2001–2005 member of the Executive Board of the Ascom Group, from 2002 Deputy CEO and General Manager of the Transport Revenue Division, which was acquired by ACS in 2005
Until 2007 Managing Director ACS Europe + Transport Revenue (later a Xerox company)
2007–2011 CEO Ascom Group (Switzerland)
2011–2015 CEO Kaba Group (Switzerland)
Since 2015 CEO dormakaba Group (Switzerland), since 2018 also Chairman of the Board of Directors
Member of the Board of Directors of Georg Fischer AG (Switzerland)
At no time was he a member of the Group Executive Committee of Zehnder Group AG or of any of its subsidiaries.
He has no significant business relations with Zehnder Group AG or with any of its subsidiaries.

Ivo Wechsler

Member of the Board

Swiss citizen, born 1969
first elected 2019

Non-executive member
Member of the Audit Committee
Lic. oec. HSG, University of St. Gallen (Switzerland)
1995–1997 Schweizerische Bankgesellschaft (UBS) in Corporate Finance, Zurich (Switzerland)/London (United Kingdom)
1998–2000 Controller, from 1999 Head of Controlling & Treasury at Sunrise Communications, Rümlang (Switzerland)
2001–2007 Head Corporate Controlling and from 2005 in addition Head Corporate Treasury, Ascom Group, Bern (Switzerland)
2008–2010 Head Corporate Controlling, HUBER+SUHNER Group, Pfäffikon (Switzerland)
Since 2010 Chief Financial Officer and member of the Executive Group Management, HUBER+SUHNER Group, Pfäffikon (Switzerland)
At no time was he a member of the Group Executive Committee of Zehnder Group AG or of any of its subsidiaries.
He has no significant business relations with Zehnder Group AG or with any of its subsidiaries.

Milva Zehnder

Member of the Board

Swiss citizen, born 1985
first elected 2016

Non-executive member
Member of the Compensation Committee
2005–2010 studies of law at University of Lucerne (Switzerland) with a Master of Law degree
2008–2009 legal assistant at Geissmann Attorneys at Law, Baden (Switzerland)
2009 exchange semester at Fordham University, School of Law, New York (USA)
2010–2011 legal intern at Schweiger Attorneys at Law and Notaries, Zug (Switzerland)
2012 admitted to the bar, attorney-at-law and notary in the canton of Zug (Switzerland)
Since 2013 attorney-at-law and notary at Schweiger Attorneys at Law and Notaries, Zug (Switzerland)
At no time was she a member of the Group Executive Committee of Zehnder Group AG or of any of its subsidiaries.
She has no significant business relations with Zehnder Group AG or with any of its subsidiaries.
Representative of the Zehnder family

3.2 Other activities and vested interests

Other activities and vested interests are outlined in the short profiles of the members of the Board of Directors under the previous item 3.1 Members of the Board of Directors. Beyond these activities, the members of the Board of Directors do not have any dealings with important institutions, hold ongoing executive or advisory roles for interest groups, or hold any official function or political office.

3.3 Rules in the Articles of Association on the number of permitted activities

Each of the members of the Board of Directors is permitted to undertake the following additional activities in the supreme management or administrative bodies of legal entities obligated to be listed in the commercial register in Switzerland or an equivalent register in another country and which are not controlled by the company, do not control the company or are not occupational pension schemes subscribed to by employees of the Zehnder Group:

Maximum 5 mandates as member of the Board of Directors or member of other supreme management or administrative bodies of companies which are public corporations according to Article 727 Para. 1 Item 1 of the Swiss Code of Obligations; as well as

Maximum 10 mandates as member of the Board of Directors or member of other supreme management or administrative bodies of companies as defined in Article 727 Para. 1 Item 2 of the Swiss Code of Obligations; as well as

Maximum 15 mandates as member of the Board of Directors or member of other supreme management or administrative bodies of legal entities which do not meet the criteria outlined above.

Mandates with companies which are controlled by the same entity, or which are subject to the same commercial authorisation, are counted as a single mandate.

3.4 Elections and terms of office

Pursuant to Article 20 of the Articles of Association (number of members and terms of office; www.zehndergroup.com/en/investor-relations/corporate-governance), the Board of Directors is made up of at least three members elected by the Annual General Meeting for a period of one year. Re-election is permissible.

At the Annual General Meeting, there is a separate vote on the election or re-election of each candidate.

The Annual General Meeting elects at least two and no more than four members to the Compensation Committee from the members of the Board of Directors. The terms of office of the members of the Compensation Committee are one year and end at the close of the next ordinary Annual General Meeting. Members are eligible for re-election.

3.5 Internal organisational structure

Pursuant to Article 25 of the Articles of Association (meetings, resolutions, quorum, minutes; www.zehndergroup.com/en/investor-relations/corporate-governance), the Chairman (Hans-Peter Zehnder) or his deputy (Jörg Walther) must convene and chair the meeting. The Board’s duties are carried out by the entire Board. Managerial and monitoring tasks are delegated to ad hoc Board committees at regular intervals. For each meeting, all Board members receive relevant documentation one to two weeks in advance. In 2020, the Board met two times, in February and September. The meetings lasted six and a half hours and two days respectively. In addition, the Board held nine telephone conferences, in February, March, April (two), May, June, July, August and December, lasting between fifteen minutes and around four hours each. The attendance rate was 93%.

The members of the Group Executive Committee attended the Board meetings and participated in the telephone conferences as required. Representatives of the auditors or external consultants are called in to advise on individual items on the agenda. To allow the Board to acquire local information directly, a regular rhythm has been established to hold one of the Board meetings on the premises of an operating company of the Group. As a result of the COVID-19 pandemic, no visit to a subsidiary took place in 2020.

Compensation Committee

The Board is supported by a Compensation Committee, consisting of at least two and a maximum of four members of the Board of Directors who are elected individually and annually by the Annual General Meeting. As at 31 December 2020, the Compensation Committee was composed of Riet Cadonau, Chairman, Urs Buchmann, member, and Milva Zehnder, member. The Compensation Committee meets as often as the business requires, generally before the meetings of the full Board of Directors. In 2020, the Compensation Committee held four meetings, in February, April, September and December. The meetings lasted an hour and a half each on average. The attendance rate was 100%.

The Compensation Committee has its own regulations, approved by the Board.

The Compensation Committee has the following tasks in particular:

Submission of motions to the full Board of Directors relating to the Group’s remuneration system;
Submission of motions to the full Board of Directors relating to targets set for the Group Executive Committee, the achievement of which has an impact on remuneration paid;
Submission of motions to the full Board of Directors relating to the specific remuneration paid to the Chairman of the Board of Directors and each of the other members of the Board of Directors;
Submission of motions to the full Board of Directors relating to the specific remuneration paid to the CEO as well as the specific remuneration paid to each of the other members of the Group Executive Committee;
Submission of motions to the full Board of Directors relating to changes to the Articles of Association affecting the remuneration system compensating the members of the Group Executive Committee.

For further details on the Compensation Committee, please refer to item 1.2 Compensation Committee in the Compensation Report.

Audit Committee

The Audit Committee consists of at least two members of the Board of Directors. The Board of Directors appoints the members of the Committee each year and designates the Chairperson. The Audit Committee provides support to the Board of Directors in overseeing the completeness of financial statements, compliance with statutory obligations, qualification of the external auditor and the performance of internal and external auditors. The Audit Committee assesses the fitness for purpose of the financial reporting, the internal review system and the general monitoring of business-related risks.

Audit Committee meetings are attended as guests by the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Head of Group Controlling, the Head of Internal Audit & Compliance and representatives of the external auditor. Where necessary, the Audit Committee addresses certain items on the agenda solely with representatives of the external auditor and/or internal auditing staff.

As of 31 December 2020, the Audit Committee was composed of Jörg Walther, Chairman, Urs Buchmann, member, and Ivo Wechsler, member. The Audit Committee convenes at the invitation of the Chairman as often as is required by business activities. In 2020, the Audit Committee convened four times: in February, July, September and December. The meetings lasted two hours on average. The attendance rate for the meetings was 100%.

In particular, the Audit Committee has the following main duties:

Evaluation of external auditors and recommendations for the attention of the Board of Directors regarding selection of an auditor by the Annual General Meeting;
Performance assessment of the incumbent auditor and approval of the remuneration budget for auditing submitted by the external auditor;
Organisation of internal auditing and appointment of the internal auditor; commissioning of work and assessment of performance;
Review and approval of auditing plans from internal auditing and the external auditor;
Approval of any services rendered by the external auditor that are not related to auditing;
Consultation with the Group Executive Committee and the external and internal auditors regarding significant risks, contingencies and other obligations of the Group, as well as evaluation of the measures taken by the Group to deal with them;
Review and discussion of the annual and interim financial statements of the company and of the Group – including significant items not recognised in the balance sheet – with the relevant members of the Group Executive Committee;
Discussion of the results of the annual review with the external auditor and discussion of internal auditing reports, as well as issuing of any recommendations or proposals to the Board of Directors;
Evaluation of and ensuring cooperation between the external and internal auditors.

3.6 Definition of areas of responsibility

The allocation of the areas of responsibility between the Board of Directors and the Group Executive Committee is based on the law (Swiss Code of Obligations), on the company’s Articles of Association and on its Organisational Regulations.

Insofar as provision to the contrary has not been made in law, in the Articles of Association or in its Organisational Regulations, the Board of Directors delegates management of the business completely to the Group Executive Committee.

The Board of Directors is responsible for the overall management of the company, supervision and control of the Group Executive Committee. It issues guidelines for business policy and is kept regularly informed of the course of business.

The Board of Directors is the supreme authority in the context of the management structure of the Group. Insofar as is permitted by law, the Board of Directors has the right of initiative, power of oversight and ultimate decision-making authority over the Group companies.

For the Articles of Association and Organisational Regulations, please refer to our website www.zehndergroup.com/en/investor-relations/corporate-governance.

3.7 Information and control instruments vis-à-vis the Group Executive Committee

As part of regular reporting practice, the Board members receive monthly reports (income statement, key figures, commentary) and quarterly reports (also expanded to include balance sheet). In addition, the Board members receive a quantified medium-term plan and a detailed budget analysis. The strategic opportunities and risks are analysed regularly and in-depth once a year, and appropriate measures decided.

Operating under the guidance of the CFO, the Zehnder Group has a structured risk management process which has been approved by the Board of Directors and systematically monitors risks to the business. In this process, strategic and operational risks are identified every year and analysed in terms of both probability of occurrence and severity, and key risks are defined. Appropriate measures for minimising and monitoring these risks are then set out. The Board of Directors reviews and approves the risk report once a year. Each member of the Group Executive Committee is responsible for implementation of the measures in his area of responsibility. The Audit Committee supports the Board of Directors in the monitoring of business risks and the assessment of measures introduced by the Group Executive Committee. The Board of Directors is informed periodically of significant changes to the risk assessment as well as being kept abreast of risk management activities that have been undertaken. The internal system for managing financial reporting defines checks and controls that reduce the corresponding risks. Compliance with internal guidelines is monitored by means of internal random checks and regular audits by external specialists.

The financial risks are monitored by the Treasury department of the Zehnder Group under the guidance of the CFO. Risk management focuses on identifying, analysing and mitigating currency, interest, liquidity and counterparty risks, in order to limit the extent to which they can impair cash flow and net profit.