Corporate Governance

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3. Board of Directors

We refer to the Articles of Association and Organisational Regulations of Zehnder Group AG set out on our website www.zehndergroup.com/en/investor-relations/corporate-governance.

Skills and expertise of the Board of Directors

In accordance with the Swiss Code of Best Practice for Corporate Governance for a balanced composition of the Board of Directors, the members of the Board of Directors have a broad range of educational backgrounds, professional experience and technical expertise from various sectors.

Alongside the diversity of ages, genders and geographic origins, the Board of Directors evaluates its own level of diversity using a competence matrix drawn up by the Nomination and Compensation Committee. This matrix contains the following professional skills and expertise:

Evaluation of the Board of Directors’ competence is based on the three most important skills of each member of the Board of Directors. The Nomination and Compensation Committee verifies the composition and balance of the Board of Directors annually by way of self-evaluation on the basis of the features listed above and the strategy of the Zehnder Group, in order to obtain confirmation of whether the Board of Directors remains in possession of the necessary skills and expertise to exercise its duties. The results and any resulting recommendations are discussed by the Board of Directors.

All the skills required are present within the Board of Directors. Details of the professional background and education of the individual members of the Board of Directors as of 31 December 2022 are set out as biographical data under the following item 3.1 Members of the Board of Directors.

3.1 Members of the Board of Directors

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Dr Hans-Peter Zehnder

Chairman of the Board of Directors

Swiss citizen, born 1954
First elected 1988
Non-executive member since 2019

Professional background and education

  • 1993–31.10.2014 and 5.2.–31.12.2018 Chairman of the Group ­Executive Committee, Chief Executive Officer (CEO) of the Zehnder Group, Gränichen (CH)
  • 1988–1992 Vice Chairman of the Group ­Executive Committee, head of the radiator division of the Zehnder Group, Gränichen (CH)
  • 1985–1988 Member of the Group Executive Committee, head of the instrument division (1986–1988) of the Zehnder Group, Gränichen (CH)
  • 1981–1984 Head of Finance, Gebr. Bühler AG, Uzwil (CH)
  • 1974–1980 Dr. oec. HSG, University of St. Gallen (CH)
  • Until the end of 2018 he was part of Zehnder Group AG management.
  • He retains individual directorships of subsidiaries that are being transferred to the CEO Matthias Huenerwadel. Beyond this, he has no significant business relations with Zehnder Group AG or its subsidiaries.

Other activities and vested interests

  • Chairman of the Board of Directors of R. Nussbaum AG (CH), member of the Board of Directors of AZ Medien AG (CH), CH Media AG (CH) and Lagerhäuser der Centralschweiz AG (CH)
  • Chairman of the Board of Directors of Graneco AG (CH), which together with its shareholders holds 51.8% of Zehnder Group AG voting rights
  • Chairman of the Board of Directors of Granarium AG (CH), which holds the majority of the capital and voting rights in Graneco AG (CH)
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Jörg Walther

Vice Chairman of the Board of Directors

Swiss citizen, born 1961
First elected 2016
Non-executive member
Chairman of the Audit Committee

Professional background and education

  • Since 2010 Business lawyer and partner, Schärer Attorneys at Law, Aarau (CH)
  • 2010–2012 General Counsel and Head Corporate Services, member of the Executive Committee, Resun AG, Aarau (CH)
  • 2001–2009 Senior Corporate Counsel, Global Head Legal M&A and Antitrust, member of the Group Legal Executive Committee, Novartis International AG, Basel (CH)
  • 1999–2001 Group Vice President M&A, ABB Asea Brown Boveri AG, Zurich (CH)
  • 1995–1998 Senior Corporate Counsel, ABB Schweiz AG, Baden (CH)
  • 1991–1995 Legal Counsel/General Counsel and Head Legal Services, Danzas Management AG, Basel (CH)
  • 1999 MBA University of Chicago (US), Booth School of Business
  • 1997 Advanced Management Programme, University of Oxford (UK)
  • 1993 Post-graduate certificate in European Economic Law, University of St. Gallen (CH)
  • 1990 Admitted to the bar
  • 1989 lic. iur., University of Zurich (CH)
  • At no time has he been 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. Since then, he has had no significant business relations with Zehnder Group AG or with any of its subsidiaries.

Other activities and vested interests

  • Vice Chairman and member of the Audit and Finance Committee of AEW Energie AG (CH), member of the Board of Directors and Chairman of the Audit Committee of HUBER+SUHNER AG (CH) and SFS Group AG (CH), Vice Chairman of the Board of Directors of Immobilien AEW AG (CH), member of the Board of Directors of Kraftwerk Augst AG (CH)
  • Member of the Board of the swissVR association (CH)
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Dr Urs Buchmann

Member of the Board of Directors

Swiss citizen, born 1957
First elected 2010
Non-executive member
Member of the Audit Committee

Professional background and education

  • Since 1985 Long-term career at Credit Suisse in corporate and investment banking in Asia and in servicing institutional customers in the Asia-Pacific region, currently Vice Chairman of Credit Suisse (Hong Kong) Ltd.
  • 1977–1984 Studied law (doctorate) at the University of Bern (CH)
  • At no time has he been 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.

Other activities and vested interests

  • Member of the Board of Directors of Swiss Re Asia Pte. Ltd. (SG)
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Riet Cadonau

Member of the Board of Directors

Swiss citizen, born 1961
First elected 2013
Non-executive member
Chairman of the Nomination and Compensation Committee

Professional background and education

  • 2015–2021 CEO, dormakaba Group, Rümlang (CH)
  • 2011–2015 CEO, Kaba Group, Rümlang (CH)
  • 2007–2011 CEO, Ascom Group, Dübendorf (CH)
  • 2005–2007 Managing Director, ACS Europe + Transport Revenue (later a Xerox company), Glattbrugg (CH)
  • 2001–2005 Member of the Executive Board, Ascom Group, Bern (CH), from 2002 Deputy CEO and General Manager of the Transport Revenue Division, which was acquired by ACS in 2005
  • 1990–2001 Various management positions at IBM Switzerland, Zurich (CH), most recently as a member of the Management Board and Director of IBM Global Services
  • 2007 Advanced Management Programme at INSEAD (FR)
  • 1985–1988 Master of Arts in economics and business ­administration (lic. oec. publ.), University of Zurich (CH)
  • At no time has he been 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.

Other activities and vested interests

  • Chairman of the Board of Directors of dormakaba Holding AG (CH), member of the Board of Directors of Georg Fischer AG (CH)
  • Chairman of the Board of Directors of Swiss-American Chamber of Commerce (CH)
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Sandra Emme

Member of the Board of Directors

German-Swiss dual citizen, born 1972
First elected 2022
Non-executive member
Member of the Nomination and Compensation Committee

Professional background and education

  • Since 2011 Google Online Marketing, Global Business Development, Digital Transformation Consulting, currently Industry Leader Cloud at Google Switzerland GmbH, Zurich (CH)
  • 2008–2009 CEO, Swixpert GmbH, Zurich (CH)
  • 2000–2008 Co-founder and CEO, SoftThinks SA, Lille (FR) and SoftThinks USA Inc, San Jose (US)
  • 1997–2000 Co-founder and Business Development Director, AS Media, Marseille (FR) and London (UK)
  • 2022 ESG Designation Program for Board Members, Competent Boards (CA)
  • 2020 Cybersecurity Program, Massachusetts Institute of Technology (US)
  • 2017–2019 Corporate Governance Programme, University of St. Gallen (CH)
  • 2015 Leading Digital Business Transformation, IMD Business School, Lausanne (CH) and Singapore (SG)
  • 1993–1995 Ecole Supérieure de Commerce, Marseille (FR)
  • 1991–1995 MA in Business and International Management, City University of Applied Sciences, Bremen (DE)
  • At no time has she been 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.

Other activities and vested interests

  • Member of the Board of Directors of Belimo Holding AG (CH)
  • Member of the Steering Committee of digitalswitzerland (CH)
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Milva Inderbitzin-Zehnder

Member of the Board of Directors

Swiss citizen, born 1985
First elected 2016
Non-executive member
Member of the Nomination and Compensation Committee

Professional background and education

  • Since 2013 Attorney-at-law and notary, Schweiger Attorneys at Law and Notaries, Zug (CH)
  • 2010–2011 Legal intern, Schweiger Attorneys at Law and Notaries, Zug (CH)
  • 2008–2009 Legal assistant at a law firm in Baden (CH)
  • 2012 Admitted to the bar, attorney-at-law and notary in the canton of Zug (CH)
  • 2005–2010 Law studies at University of Lucerne (CH) with a Master of Law degree
  • 2009 Exchange semester at Fordham University, School of Law, New York (US)
  • At no time has she been 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.

Other activities and vested interests

  • Representative of the Zehnder family shareholders
  • Member of the Board of Directors of Granarium AG (CH), which holds the majority of the capital and voting rights in Graneco AG (CH)
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Ivo Wechsler

Member of the Board of Directors

Swiss citizen, born 1969
First elected 2019
Non-executive member
Member of the Audit Committee

Professional background and education

  • Since 2010 Chief Financial Officer and member of the Executive Group Management, HUBER+SUHNER Group, Herisau (CH)
  • 2008–2010 Head Corporate Controlling, HUBER+SUHNER Group, Herisau (CH)
  • 2001–2007 Head Corporate Controlling and from 2005 in addition Head Corporate Treasury, Ascom Group, Bern (CH)
  • 1998–2000 Controller, from 1999 Head of Controlling & Treasury at Sunrise Communications, Rümlang (CH)
  • 1995–1997 In Corporate Finance at Schweizerische Bankgesellschaft (UBS), Zurich (CH)/London (UK)
  • 1989–1994 lic. oec. HSG, University of St. Gallen ­(CH)
  • At no time has he been 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.

Other activities and vested interests

  • No other activities and vested interests

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

Under Article 30 (Other permitted activities) of the Articles of Association, the members of the Board of Directors are 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:

Mandates with companies 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

Article 20 (Employees and term of office) of the Articles of Association stipulates that 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, a separate vote is held on the election or re-election of each candidate.

For details of the initial election of the individual members of the Board of Directors, we refer to the short profiles of the Directors under 3.1 Members of the Board of Directors.

3.5 Internal organisational structure

The Chairman (Dr Hans-Peter Zehnder) or his deputy (Jörg Walther) convenes and chairs the meetings and conference calls. 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 week in advance. The members of the Group Executive Committee attend the Board meetings and participate in the conference calls 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 pattern has been established of holding one of the Board meetings on the premises of an operating company of the Group. In 2022, the Board held nine meetings or conference calls. These lasted an average of six hours. The attendance rate averaged 98%.

 

18.2.

26.3.

7.4.

25./ 27.4.

28.4.

4.–6.7.

22.7.

19.– 21.9.

14.12.

Dr Hans-Peter Zehnder

Jörg Walther

Dr Urs Buchmann

x

Riet Cadonau

Sandra Emme 1

n/a

n/a

n/a

Ivo Wechsler

Milva Inderbitzin-Zehnder

1 Member of the Board of Directors since 7 April 2022

The Board of Directors is supported by a Nomination and Compensation Committee and an Audit Committee.

Nomination and Compensation Committee

The Nomination and Compensation Committee is made up of at least two and not more than four members of the Board of Directors who are each elected annually by the Annual General Meeting. Members are eligible for re-election.

The Nomination and Compensation Committee comprised the following members as of 31 December 2022:

The Nomination and Compensation Committee meets as often as the business requires, generally before the meetings of the full Board of Directors. In 2022, the Committee held four meetings. These lasted one and a half hours each on average. The attendance rate was 100%.

 

18.2.

7.4.

21.9.

14.12.

Riet Cadonau

Dr Urs Buchmann 1

n/a

n/a

Sandra Emme 2

n/a

n/a

Milva Inderbitzin-Zehnder

1 Member of the Nomination and Compensation Committee to 7 April 2022

2 Member of the Nomination and Compensation Committee since 7 April 2022

The Nomination and Compensation Committee has its own regulations, which are approved by the Board.

The Nomination and Compensation Committee has the following specific duties pursuant to 4.3 (The Nomination and Compensation Committee) of the Organisational Regulations:

Further details can be found at item 1.2 Nomination and Compensation Committee of 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 comprised the following members as of 31 December 2022:

The Audit Committee convenes at the invitation of the Chairman as often as is required by business activities. Audit Committee meetings are attended as guests by the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Director Group Controlling, the Head 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. In 2022, the Audit Committee convened four times. The meetings lasted an average of two hours. The attendance rate was 100%.

 

16.2.

19.7.

19.9.

14.12.

Jörg Walther

Dr Urs Buchmann

Ivo Wechsler

Pursuant to 4.2 (The Audit Committee) of the Organisational Regulations, the Audit Committee has the following specific tasks and responsibilities:

Chairman

The Chairman of the Board of Directors chairs the meetings of the Board of Directors and the Annual General Meeting.

Alongside membership of the Board of Directors, the Chairman's specific remit includes, in particular:

In extraordinary situations where it is not possible to inform the Board of Directors in advance, further to consultation with the Vice Chairman or, in his absence, with another member of the Board of Directors, the Chairman has the authority to make all necessary decisions provided that such decisions are within the framework of existing business policy. The full Board of Directors must be informed of such decisions without delay.

Vice Chairman

The Board of Directors appoints the Vice Chairman. The Vice Chairman supports and advises the Chairman of the Board of Directors in relation to his responsibilities and powers. Together with the Chairman, he promotes balanced management and monitoring within the Group, Board of Directors and Committees. The duties of the Vice Chairman include chairing meetings of the Board of Directors during temporary absence or incapacity of the Chairman. He has the role of Lead Independent Director. Together with the Nomination and Compensation Committee, he is responsible for regular monitoring and an annual assessment of the Chairman of the Board of Directors.

Alongside membership of the Board of Directors, the Chairman's specific remit includes, in particular:

As an alternative to the Chairman of the Board of Directors, particularly in case of his absence or incapacity, the Vice Chairman is the point of contact for corporate governance and risk management, and also represents the company in respect of shareholders and other external groups of stakeholders.

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), the company’s Articles of Association and 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, and 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.

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

The Board of Directors is regularly informed of the activities of the Group Executive Committee and business units via various channels.

Management information system (MIS)

As part of regular reporting practice, the Board of Directors receives monthly reports (income statement, key figures, commentary) and quarterly reports (expanded to include balance sheet, cash flow statement, investments, etc.). In addition, the Board members receive a quantified medium-term plan and a detailed budget analysis. The Group Executive Committee members attend the meetings of the Board of Directors and also the conference calls depending on requirements, reporting to the Board of Directors.

Risk management process

Operating under the guidance of the CFO, the Zehnder Group has a structured risk management process that has been approved by the Board of Directors and which systematically monitors risks to the business, including sustainability and climate risks. In this process, strategic and operational risks are identified every year, including all the sites and function areas, 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 their 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 and is kept abreast of risk management activities.

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.

Information security risks are monitored by the Group’s central IT department, under the leadership of the CFO. The focus of risk management is on IoT (Internet of Things; i.e. products with internet connectivity), the central and local IT departments of the Group and the control systems of production and logistics. External specialists are called in at regular intervals for organisational issues and technical audits.

Internal audit

Internal audit is an independent and objective auditing and advisory activity that aims to evalutate  and improve the efficiency of the corporate management, risk management and internal control. It is undertaken by the Head of Internal Audit & Compliance, who reports to the Chairman of the Board of Directors and with regard to this role reports directly to the Audit Committee.

Based on the audit plan approved by the Audit Committee, the Group companies are audited at regular intervals for general and specific issues on the basis of ongoing risk assessment. During the year under review, eight internal audits were carried out. The audit reports agreed with the managements of the audited companies or the responsible functions are distributed to the Chairman of the Board of Directors, the Audit Committee, the Group Executive Committee and the external auditor. The Head of Internal Audit & Compliance ensures that the points brought up are dealt with and sustainable adjustments made under the responsibility of the line organisation. He attends the meetings of the Audit Committee. Any material findings resulting from internal audits are presented and discussed.

Integrity Line

Zehnder Group pursues an integrated system approach to combat violations of its Code of Conduct, including the protection of whistleblowers. The whistleblower system introduced in the reporting year can be used to report information about misconduct affecting Zehnder Group or the welfare of employees and third parties. The Integrity Line is accessible via the Group website (www.zehndergroup.com) and local company websites. Employees also have access via the Group intranet and local intranets. The reports, which can also be submitted anonymously, are processed primarily by the Group’s legal department. The Audit Committee is informed about the reports received.

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