At the 111th Annual General Meeting on March 21, 2007, Gerold Bührer, Gertrud Höhler and Kurt E. Stirnemann were individually re-elected, each for a term of four years. The Board of Directors, which in accordance with § 16.1 of the Articles of Association is comprised of seven to ten members, has ten members.
IndependencyElection and term of officeInternal organizational structureAreas of responsibilityExecutive CommitteeWork methods of the Board of DirectorsEvaluationAudit CommitteeCompensation CommitteeNomination CommitteeAreas of responsibilityInformation and control instrumentsInternal AuditCorporate ComplianceRisk ManagementIndependencyThe Delegate to the Board is the only executive member of the Board. The remaining members of the
Board of Directors are non-executive. There are no significant business relationships between the non-executive members of the Board or the companies or organizations they represent and Georg Fischer Ltd or a subsidiary company. Furthermore, there is no cross-involvement.
Back to topElection and term of office
Members of the Board of Directors are elected individually by the Annual General Meeting and normally for a term of four years. Each year the General Meeting of Shareholders will elect or re-elect around a quarter of the Board members. Particular emphasis is placed on experience as a businessman, relevant expertise or international ties when selecting Board members. The Board of Directors aims for a proper balance of competence and knowledge, taking into account the main operative focus of the Corporation, its international orientation and the requirements for financial statements of companies listed on the stock exchange.
The term of office of newly elected members is determined at the time of election, with consideration given to the staggered renewal of the Board. Members whose terms expire may be reelected immediately. Members of the Board must resign their mandate at the Annual General Meeting following their 70th birthday.
Back to top
Internal organizational structure
The Board of Directors constitutes itself by electing a Chairman, Vice Chairman and Board Delegate from among itself on an annual basis. Members of the committees are elected in the same manner. The Board of Directors constituted itself the day of the Annual General Meeting, March 21, 2007, as follows: Martin Huber Chairman (hitherto), Bruno Hug Vice Chairman (hitherto) and Kurt E. Stirnemann Delegate to the Board (hitherto).
Back to top
Areas of responsibility
The members of the three Board Committees are listed on page 98. The Board Committees provide preliminary consultation to the Board of Directors and do not make any concluding decisions (except the Compensation Committee). They discuss the issues assigned to them and make proposals to the Board of Directors as a whole. The President and 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.
Back to top
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. They are not entitled to
vote, however. Invitations to Board meetings list all of the issues
that the Board of Directors, a Board Committee or the CEO wish
to discuss. All participants of a Board meeting receive 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: the annual strategy meeting lasted two
days, three meetings lasted half a day, two lasted less. In addition,
the entire Board visited one customer and one production site of
Georg Fischer. The three Board Committees held a total of eleven
meetings. The appointments for the regular meetings are generally
set well in advance in order that all members can attend
personally. In 2007 the attendance rate was 98 percent.
External consultants are called on for their services involving
specific topics. Further information is provided in the section
on the three Board Committees.
Back to top
Evaluation
The Board of Directors reviews its performance
and that of its members annually within the framework of a selfassessment.
In the year under review, as part of this assessment,
it monitored in particular the achievement of the target defined for
2007 and the work of the Board in general. The Board of Directors
incorporates the conclusions of this assessment into its annual
planning for 2008.
Back to top
Audit Committee
The Audit Committee is comprised of four
independent Board members. The Audit Committee supports the
Board of Directors with monitoring the accounting and financial
reporting, supervises internal and external audits, assesses the
efficiency of the internal control system, including risk
management, and the compliance with statutory provisions, acknowledges
the closing financial statements, endorses the
sensitivity analysis of the pension trust 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 General Meeting.
As a rule, the Chairman of the Board, the President and
CEO, the CFO, the chief internal auditor and a representative of the external auditors also attend the meetings. At the request of the
Audit Committee and in agreement with the CEO, the external
auditor also provides information on current questions relating to
the financial statement and financial aspects. During the financial
year just ended, the Audit Committee held six meetings, two lasted
half a day, four less.
Back to top
Compensation Committee
The Compensation Committee
is comprised of three independent Board members. It supports
the Board of Directors in determining compensation policy for the
highest corporate level and, on request, uses knowledge of external
compensation specialists as regards market data from
comparable companies in Switzerland to this effect. It proposes to
the Board of Directors the total amount of compensation to be paid
to the Executive Committee and the Chief Executive Officer and
decides about the remuneration of the other members of the Executive
Committee upon a proposal of the Chief Executive Officer.
The Compensation Committee held two meetings during the last
financial year, each of which lasted one hour.
Back to top
Nomination Committee
The Nomination Committee is
comprised of three independent Board members. It supports the
Board of Directors with succession planning for the Board itself
and the Executive Committee and assists in the selection of candidates
for appointment to the Board of Directors or Executive
Committee. The Nomination Committee is informed annually on
senior management succession planning for the two highest operative
management levels. During the last financial year, the Nomination
Committee held four meetings, which lasted on average
two hours.
Back to top
Areas of responsibility
The Board of Directors has ultimate
responsibility for supervising and monitoring the management of
Georg Fischer Ltd. It appoints and oversees the Executive Committee
and is responsible for determining the Corporation’s
strategic direction, the design of accounting, the financial control
and financial planning. It delegates the operative management to
the CEO, who is supported by the Executive Committee in this task.
Apart from the tasks which cannot be delegated, the Board of Directors
passes resolutions, among others, on:
- investments in or sale of fixed assets exceeding CHF 5 million;
- amendments made to the Corporation’s legal structure
(establishment of corporate subsidiaries, acquisitions,
joint ventures, the liquidation of companies, etc.);
- the approval of bank loans exceeding CHF 100 million
or those which include cross default or similar clauses;
- guarantees, sureties or letters of comfort exceeding CHF 100 million;
- the assignment of power of attorney to lawsuits and
settlements involving amounts in disputes exceeding
CHF 5 million.
The authorities of, as well as the collaboration between, the
Board of Directors and the Executive Committee are laid down in
the Organization and Business Regulations.
Back to top
Information and control instruments
The internal
Management Information Systems (MIS) contains all key figures of
the Corporate Groups. In addition, the general managers of the
operative companies comment on selected topics such as the
market, financials, technology/production, personnel and outlook
on a monthly basis. These reports are presented to the line
managers, the CEO and the CFO. The MIS forms the basis for the
monthly report, a written copy of which is given to every Board
member. These monthly reports contain, together with a detailed
commentary, current information concerning the course of
business and accounts of the Corporation, the Corporate Groups
and subsidiaries.
It also receives projections of the annual financial
statements twice a year, and the results of medium-term planning
for the next three years once a year. The Executive Committee
presents and comments on the course of business at the Board
meetings and brings forth all important matters at the Board meetings.
Once a year, the Board of Directors has a two-day meeting
behind closed doors to concentrate exclusively on the strategies of
the corporate groups and the Corporation as a whole.
The Chairman of the Board of Directors attends the annual
conference of the Corporation’s top managers and the Executive Committee’s two-day planning meeting. 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 of Directors visits corporate subsidiaries on a regular basis
to see for himself their operations and how they are implementing
the Corporation’s strategies. In 2007 he visited corporate subsidiaries
in Europe, Asia and Australia.
Back to top
Internal Audit
Internal Audit reports to the Chairman of the
Audit Committee, and to the CFO functionally and administratively.
Based on the risk-oriented audit plan approved by the Audit Committee,
corporate subsidiaries are audited either annually or every
two to three years, depending on the risk assessment. During the
year under review, 45 internal audits were carried out. The written
report is reviewed intensively with the management of the company
concerned, copies are given to the line manager, external
auditor, the Executive Committee, the Chairman of the Board and
the Audit Committee. Audit reports with significant findings are
also presented to and discussed with the Audit Committee. Internal
Audit also ensures that all discrepancies arising in internal and external audits are dealt with and submits a corresponding 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.
Back to top
Corporate Compliance
The Georg Fischer Corporation
created the position of a Corporate Compliance Officer in 2005.
Based on the Compliance Concept passed by the Executive Committee
in 2006, the Compliance Officer is particularly responsible
for preventive measures, training the corporate groups and providing
information and consultation to the corporate subsidiaries
to ensure that the corporate subsidiaries comply with the law, internal
rules and the Corporation’s principles of business ethics in
their business activity. In 2007, the Compliance Officer instructed
300 employees, in particular Managing Directors and members of
senior and middle management, at 12 internal training sessions.
In addition, in November 2007, an e-training programme on cartel
law was launched in which around 1,000 employees are participating.
The Compliance Officer reports annually on his activity
to the Executive Committee and the Board of Directors.
Back to top
Risk Management
The Board of Directors and Executive
Committee attach considerable importance to careful handling of
strategic, financial and operative risks and therefore expanded
enterprise risk management during the past business year. The
head of the Corporate Risk Management & Tax Service Division is
the Chief Risk Officer (CRO). In this function, the CRO reports
directly to the President and CEO and is supported in this task by
Risk Officers from the three Corporate Groups. Together with
specialists in Corporate Risk Management, and headed by the
CRO, they form the Corporate Risk Council, which met four times
during the past business year.
Georg Fischer relies on the strategy of controlling risks and
implements various tools to this effect. Together with the provision
for comprehensive and effective insurance coverage, enterprise
risk management involves the systematic identification, assessment
and reporting of strategic, operative and financial risks.
Georg Fischer identifies all relevant risks for the entire Corporation
concerning the risk fields of markets, leadership and resources,
operations as well as finances. During the past business year, persons
responsible for risk management of the corporate groups defined,
together with the CRO and operative management, the risks
relevant to their respective fields. The assessment of risks was illustrated on risk maps according to the criteria of exposure and
probability of occurrence.
Strategic risks are primarily appraised by the Board of
Directors; financial and operative risks by the President and CEO
and the Executive Committee. To a large degree, enterprise risk
management is an integral part of planning and managerial processes.
The service divisions involved in enterprise risk
management at the corporate level are, by name, the heads of
Corporate Controlling, Corporate Compliance, Human Resources,
Internal Audit, Communication, Corporate Planning, Legal, Risk
Management and Treasury.
Reports on risk management are presented on a quarterly
basis within the Corporate Groups, biannually to the Executive
Committee and annually to the Board of Directors. Risks involving
a gross exposure exceeding CHF 100 million must be brought to
the attention of the Board.
Risks can never be fully precluded in production in general,
and especially not in the foundries. The careful analysis and
minimization of risks contributes to a greater process stability and
thus to a more reliable supply to the customers. Georg Fischer
attaches a high degree of importance to these aspects. Consequently,
nearly all production sites meet a standard of HPR (Highly Protected Risks) or HMP (Highly Managed Prevention) and
are regularly inspected by an external specialized team. During
the past business year, inspections were carried out at 15 [previous
year: 25] of a total of 41 [previous year: 40] production sites.
The results are discussed with the sites concerned and the
management and, when necessary, measures are agreed upon.
Together with the corporate subsidiaries and corporate
groups, Risk Management developed technical and organizational
corporate standards which serve as the basis both for internal
purposes and for stipulations in dealing with external advisors and
insurance companies. These corporate standards define
measures for the sites of Georg Fischer which are to be implemented
in order to prevent major business interruptions and
to protect tangible assets. By the end of the year under review,
72 percent of the insured assets of the Corporation were classified
as highly protected risks (HPR). This percentage is being constantly
increased by suitable operational measures.
With the Sustainability Information System (SIS), environmental
figures (since 1997) and social figures (since 2005) are
systematically gathered and evaluated for the Corporation as a
whole. The results are published in the annual “Sustainability
Report”, taking into account the Sustainability Reporting Framework
of the Global Reporting Initiative (GRI). The report is audited
by the Swiss Association for Quality and Management Systems
(SQS).
The dealings with financial risks are explained in the financial
section on pages 71 to 73 in the annual report 2007.
Back to top
