Rules of the Articles of Association regarding the number of permissible activities according to Art. 12 (1)(1) of the Swiss Ordinance against Excessive Compensation at Stock Exchange Listed Companies (“OaEC”)

According to Art. 28 of the Articles of Association, each Board Member may hold no more than 10 mandates as a director or officer of legal entities outside the Ina Invest Group (no more than four of which may be held in exchange-listed companies), which are to be registered in the Swiss Commercial Register or a similar foreign register. If mandates are held in different legal entities of one and the same corporate group or are held on behalf of a corporate group or a legal entity, then these will be counted in their entirety as one mandate in each case. According to the above-cited provision of the Articles of Association, it is permissible to exceed the foregoing limits for short periods. 

The Articles of Association with the exact wording of the above-cited provision can be viewed on Ina Invest's website

Moreover, the NCC conducts an annual review of the external mandates held by individual members of both the Board of Directors and Management Board. Similarly, any new external mandates require prior approval from the Chairs of the Board of Directors and of the Nomination and Compensation Committee. The objective in both cases is to avoid overloading the BoD and Management Board members and prevent potential conflicts of interest.

The Company’s Board of Directors consists of five members (see Art. 3.1.1 of the Organisation Rules). The BoD members shall have a 1-year term of office, commencing with their election and expiring at the end of the following annual general meeting, without prejudice to the right of prior resignation or prior removal from office (Art.18 (3) of the Articles of Association). The BoD members may be re-elected at any time (Art.18 (4) of the Articles of Association) providing they are not yet 70 years old (Art.18 (5) of the Articles of Association). Retirement shall commence at the end of the annual general meeting following the member's 70th birthday (Art.18 (5) of the Articles of Association). In general, the total term of office of a BoD member should not exceed 12 years (Art. 3.1.2 of the Organisational Rules). As required by the Swiss Ordinance against Excessive Compensation at Stock Exchange Listed Companies (“OaEC”), the members and chair of the BoD and members of the Nomination and Compensation Committee shall be elected individually by the general meeting (Art. 18 (2) and 22 (1) of the Articles of Association). Likewise as required by the OaEC, the independent proxy is elected by the general meeting (Art. 13 of the Articles of Association). Moreover, the Board of Directors generally chooses its own members and, in particular, appoints its Vice-Chairman and secretary of the Board of Directors.

If the office of the Chairman of the Board of Directors becomes vacant or the Nomination and Compensation Committee is not completely filled or the Company lacks an independent proxy, the Articles of Association have no rules to eliminate such organisational problems that deviate from OaEC Art. 4 (4), 7 (4) and 8 (6).

Division of responsibilities on the Board of Directors

The Board of Directors is responsible for the strategic and financial management of Ina Invest and the supervision of its management. It adopts resolutions as the highest corporate body, except in matters for which the General Meeting is competent by law. The Chairman of the Board of Directors shall call the Board of Directors’ meetings. If the Chairman is unable to call the meeting, the meeting shall be called by the Vice-Chairman or, if need be, by a member of the Board of Directors designated to that purpose by the Board of Directors. The CEO shall attend the Board of Directors meetings on a regular basis. The Chairman shall determine the agenda and prepare and direct the meetings. The Chairman shall also decide on a case-by-case basis whether to involve others in the deliberations of the Board of Directors. Board of Directors' meetings may be called by any board member by specifying the agenda item and giving a short justification for the call. 

The duties, responsibilities and working procedures of the Board of Directors as well as its conduct in case of conflicts of interest are regulated by the Ina Invest OR and Table of Responsibilities of 11 June 2020 (hereinafter "Table of Responsibilities"). The Ina Invest OR (without the Table of Responsibilities) can be found here.

 

Committees of the Board of Directors

In the reporting year, the Board of Directors had the following three committees: the Audit Committee (AC), the Nomination and Compensation Committee (NCC) and, at the level of Ina Invest Ltd, the Investment Committee (IC). The Board of Directors shall elect one Chairperson per committee. The AC and NCC shall analyse the areas assigned to them by the Board of Directors and submit reports to the Board of Directors to assist with the preparation of its resolutions or the performance of its supervisory duties. The Chairperson of the individual committees inform the Board of Directors of all the essential points and make recommendations on decisions to be made by the plenary Board of Directors. 

The Committees’ duties and responsibilities are defined in the Ina Invest OR, the Table of Responsibilities annexed hereto and the regulations issued by the Board of Directors. The committees generally organise themselves. The Board of Directors shall enact appropriate regulations at request of the Committees. The committees shall generally have an advisory function, with decision-making authority reserved for the plenary Board of Directors. The committees shall have decision-making authority only where so determined in the Table of Responsibilities or in a Committee's Regulation or by a special Board of Directors resolution. The Committees are authorised to conduct or have investigations conducted on all matters within their area of responsibility. They may call upon the services of independent experts. The Board of Directors may appoint ad hoc committees for certain tasks and assign preparatory, supervisory and/or decision-making authority to such committees (sections 5.1.1 and 5.1.6 of the Ina Invest OR). None ad-hoc-committee was formed in the reporting year. 

The table below shows the committees existing in the reporting year and their members:

Audit Committee

The AC is independent and consists of at least three BoD members appointed by the Board of Directors. The AC is chaired by an expert in finance. The Audit Committee shall perform all of the Board of Directors’ duties relating to accounting oversight and organisation, financial controlling (including the internal control system), financial planning and risk management. Risk management shall include reporting on (current or impending) legal actions. In addition, the Audit Committee shall monitor and report on the Compliance Management System to the Board of Directors. The Audit Committee shall coordinate and define the internal and external auditing tasks, ensure regular communications with the external auditors, and formulate the internal and external audit engagements. The Audit Committee is entitled to order special audits (section 5.1.1 of the Ina Invest OR). For more information about the Audit Committee's tasks, also see the Ina Invest OR.

 

The overall management and supervision of the Group is assigned by law to the Board of Directors. In addition to the responsibilities reserved to the Board under Art. 716a of the Swiss Code of Obligations, the Board of Directors shall rule on the following major transactions in accordance with the Table of Responsibilities:

• the purchase and/or sale of investments; 
• the determination of the principles of the financial policy (debt-to-equity ratio and financial indicators); 
• determination of the financing plan; 
• procurement of outside capital of CHF 50 million or more (credit lines, bonds, private investments and other capital market transactions, finance leasing, hire-purchase activities, etc.); 
• Fundamental issues and guidelines relating to the investment of financial resources;
• the granting of any kind of loan of CHF 1 million or more to third parties; 
• the granting of group guarantees and sureties, other guarantees, bid, performance and payment bonds etc., other security interests and entering into contingent liabilities outside of the ordinary course of business of CHF 1 million or more; and
• the use of financial derivatives when not used strictly for hedging purposes.

Moreover, the Board of Directors is in charge of determining the sustainability strategy.

The Board of Directors shall delegate the management of the Ina Invest Group to the CEO, unless required otherwise by law, by the Articles of Association or by the Ina Invest OR and insofar as such powers have not been delegated to the Executive Management or to individual members of the Executive Management. The CEO shall take care of the management and representation of the Ina Invest Group, unless delegated to other governing bodies by law, by the Articles of Association or by the Ina Invest OR. The CEO is responsible for the conduct of business and representation of the Group, in particular, for leadership of its operations and the implementation of corporate strategy. Insofar as such powers have not been reserved to the Board of Directors, the CEO is authorised to organise, perform and/or delegate to qualified subordinates the duties and powers assigned to him according to the Ina Invest OR, subject to providing such subordinates with proper instructions and supervision. 

The CEO shall be assisted with the conduct of business by members of the Executive Management. They report directly to him. The CEO is responsible for reporting to the Chairman of the Board of Directors and/or to the Board of Directors (section 6.2.2 of the Ina Invest OR). For the details of the division of responsibilities between the Board of Directors and CEO, see the Ina Invest OR and the Table of Responsibilities.