In 2015, the Board of Directors of HOCHDORF Holding Ltd consisted of seven non-executive members. None of the members previously belonged to the Group Management, and no member has any material business relationship with the issuer or one of the issuer’s group companies. The members were elected by the General Meeting for a term of one year until the next Annual General Meeting. Members may be re-elected. Current members of the Board of Directors who are nominated for re-election are elected on individual ballots. The Chairman and any new members of the Board of Directors are elected on individual ballots. All elections and votes are conducted openly, unless the majority requests secret ballots. The retirement age for members of the Board of Directors is 70. They leave the Board of Directors at the next General Meeting after turning 70. In the reporting period, the Board of Directors did not undergo any changes. Urs Renggli submitted his notice of resignation, effective as of the 2016 Annual General Meeting. 

1950; Place of residence: Hohenrain LU; Member of the Board of Directors since: 2002. Chairman since: 2014. Training/degree: Ing. HTL. in agriculture and dairy industry in Zollikofen BE. Professional background: Farm manager and owner until 2011; Board Member and Audit Committee member of Migros-Genossenschafts-Bundes MGB until 30 June 2008; member of the Swiss National Council from 1991 to 2006 (CVP faction); 2006 to 2015 Head of DDPS claims Centre, Bern. Professional activity: Freelancer since September 2015. Other activities: None.

1956; Place of residence: Kriens LU; Member of the Board of Directors since: 2005. Vice Chairman since: 2014. Training/degree: Studies in food sciences at ETH Zurich, major in dairy science; Dipl. LM. Ing. ETH; Dr. sc. techn. Professional background: Five years in executive positions at Weichkäserei Baer AG in Küssnacht am Rigi; three years in executive management at Galactina AG Belp (baby food production); 15 years in executive management of Kambly SA, Trubschachen, five years as CEO. Professional activity: CEO of Chocolats Halba, Wallisellen since 2006. Other activities: Board Chair (VRP) of Chocolats Halba Honduras since 2014.

1961; Place of residence: Wangen SZ; Member of the Board of Directors since: 2009. Training/degree: Agricultural Engineer (Diplom); Master of Science in Animal Nutrition and Management with an additional qualification in veterinary medicine (Swedish University of Agriculture Science Uppsala); Executive MBA (University of St. Gallen). Professional background: 1989 to 1991 Head of Marketing for Feed in Scandinavia, ZIWAG AG, Oberentfelden; 1991 to 1993 PR consultant ATAG Ernst & Young Consulting AG, Bern; 1993 to 1997 Head of Profit Centre Quality and Environmental Management, Electrowatt Engineering AG, Zurich; 1997 to 2002: Head of Strategy Balanced Scorecard Siemens Building Technologies AG, Zurich, Corporate Development and Siemens AG, Munich. Professional activity: Owner of Butikofer AG – value-oriented enterprise strategies, Hergiswil, since 2002. Other activities: Member of the Board of Directors of the IE-Engineering Group, Zurich, since 2006; Member of the Board of Directors of René Faigle AG, Zurich since 2011; member of the Swiss Mountain Aid since 2011; Member of the Foundation Board of the Brunau Foundation, Zurich, since 2012; Expert of the Commission for Technology and Innovation (CTI) of the federal government since 2015.

1955; Place of residence: St. Gallen; Member of the Board of Directors since: 2014. Training/degree: Dr. iur., licensed attorney and admitted as notary (Canton of St. Gallen). Professional background: Studies in jurisprudence at the University of Zurich; doctorate in 1982. Professional activity: Self-employed attorney with own law firm in St. Gallen since 1988. Other activities: Member of the Cantonal Council of St. Gallen since 2003 (FDP faction); 2010/2011 president of the cantonal parliament; Member of various foundation boards and boards of directors (e.g. Chairman of the Board of Directors of Druckguss Systeme AG, St. Gallen; member of the Board of Directors of Gebrüder Knie, Schweizer National-Circus AG, Rapperswil; member of the Board of Directors of René Faigle AG, Zurich); President of Homeowners Association (HEV) of the Canton of St. Gallen.

1951; Place of residence: Kriens LU; Member of the Board of Directors since: 2008. Training/degree: lic. oec. publ.; certified auditor. Professional background: 1977 to 1981, responsibilities in IT and internal auditing at Schweizerische Kreditanstalt, Zurich; followed by 26 years of experience in auditing and consulting at top management level at PricewaterhouseCoopers, Lucerne. Professional activity: Independent consultant. Other activities: Chairman of the telephone counselling association «Die Dargebotene Hand Zentralschweiz»; employer representative of the HOCHDORF Group pension fund.

1962; Place of residence: Weinfelden TG; Member of the Board of Directors since: 2014. Training/degree: lic.rer.pol. Professional background: 1988 to 1989 management consulting in Germany; 1990 to 1992 group planning, UBS; 1992 to 1999 executive, Sauter Group, as CEO from 1996; 1999 to 2009 CEO of Belimed Sauter AG, Sulgen; 2005 to 2012 CEO of the Belimed Group, Zug. Professional activity: Independent entrepreneur with consulting activity and investment projects since 2012. Other activities: Member of the Foundation Board of the Thurgau Foundation for Science and Research; board member of two other SME.

1962; Place of residence: Graz, Austria; Member of the Board of Directors since: 2014. Training/degree: Prof. Dr. med. Professional background: Graduate, doctorate and post-doctorate degrees in human medicine at various universities; 1999 to 2004 Chief of the Paediatric Surgery Clinic of LMU Munich; 2004 to 2005 Associate Professor at the Chinese University of Hong Kong, Department of Surgery, Division of Paediatric Surgery; 2006 to 2012 director and professor, Clinic and Polyclinic for Paediatric Surgery, University of Leipzig. Professional activity: Head of Paediatric and Youth Surgery Department, Medical University of Graz since 2012; board member of the University Clinic for Paediatric and Youth Surgery, Medical University of Graz since 2013. Other activities: None.

Pursuant to Article 15 of the Articles of Association, the maximum number of other mandates that members of the Board of Directors may hold is:

1. Three mandates as board member or as member of other top executive or  governing bodies of public companies pursuant to Art. 727 (1) no. 1 of the Swiss Code of Obligations (CO);
2. and additionally Five mandates as board member or as member of other top executive or governing bodies of companies in the meaning of Art. 727 (1) no. 2 of the Swiss Code of Obligations (CO);
3. and additionally 10 mandates as board member or as member of other executive or governing bodies of other legal entities that do not meet the aforementioned criteria.

The Board of Directors meets at least five times each year and as often as business requires. In 2015, the Board of Directors met for six regular meetings, four extraordinary meetings and one full-day strategy day with the Group Management. In addition, the Chairman of the Board of Directors meets with the CEO every three weeks for a work session. The CEO and the CFO participate in meetings of the Board of Directors on all agenda items in an advisory capacity. When required, the Board of Directors also invites external specialists and other members of the Group Management for advice on specific topics. The Board of Directors is responsible for the strategic direction of the company, supervision of Group Management and financial control. The Board of Directors monitors the company objectives and identifies opportunities and risks. It also appoints the members of Group Management. The Board of Directors has quorum when the majority of its members are present. A valid resolution requires the majority of the votes cast. In the event of a tie, the Chairman of the Board of Directors has the deciding vote.

The Board of Directors has three permanent committees: The Audit Committee (AC), the Personnel and Remuneration Committee (PRC), and the Market and Strategy Committee (MSC). In order to organise its duties efficiently and effectively, the Board of Directors relies on recommendations of these committees. At least two non-executive members of the Board of Directors belong to each committee. The committees are subject to regular performance assessments (self-evaluation).

Members: Urs Renggli (chair), Josef Leu, Walter Locher. The main duties of this committee are:

• Checking the effectiveness of the external audits and of the internal control.
• Evaluating management directives with regard to financial risks and adherence to these directives.
• Discussing financial statements with the CFO and the head of external audits.
• Evaluating the performance and assessing  the auditing agency and its independence.
• Evaluating the risk management procedure.

In 2015, the Audit Committee met five times. In addition to the standard agenda points, particular  attention was paid to the operability and effectiveness of the internal control system (ICS) as part of risk management, and a special audit was conducted in the field of contracts/compliance and ICS Audit HOCHDORF Baltic Milk UAB.

Members: Anton von Weissenfluh (chair), Josef Leu, Niklaus Sauter. The main duties of this committee are:

• Making recommendations for the compensation of the members of the Board of Directors and of the Group Management.
• Working out the principles for an overall compensation plan for all employees that is market and performance based.
• Drawing up employment contracts for the members of the Group Management.

The Personnel and Remuneration Committee met six times.

Members: Meike Bütikofer (chair), Anton von Weissenfluh, Holger Karl-Herbert Till. The main duties of this committee are:

• Reviewing and evaluating the long-term vision, mission and values of the HOCHDORF Group.
• Evaluating decisions that are of strategic relevance, particularly those focused on value creation, in order to advise and support the Board of Directors.
• Monitoring potential changes in the basic conditions concerning the strategy approved by the Board of Directors.
• Reviewing the organisational structure based on the strategy and the staff composition of Group Management.

The Market and Strategy Committee met three times.

The Board of Directors is responsible for the overall management of the company and the Group, as well as the supervision of the Group Management. According to Article Pursuant to Art. 716a of the Swiss Code of Obligations (CO), it has the following non-transferable and inalienable duties:

• The overall control of the company and the Group, including the definition of medium and long-term strategies and planning objectives, as well as the guidelines for company policy and the issuing of required directives.
• Defining the basic organisation of the company and its associated regulations.
• Defining the guidelines for the organisation of accounting systems, financial monitoring and financial planning.
• Appointing and dismissing persons entrusted with the Group Management and representation of the company, namely the CEO, and issuing signature authorisations.
• Supervising the organs entrusted with the management of the company, specifically with regard to adherence to laws, statutes, regulations and directives.
• Creating the annual report; preparing for the General Meeting and implementing its decisions.
• Informing the legal authorities in the case of insolvency.
• Determining capital increases and the corresponding amendments to the Articles of Association.

Based on the duties mentioned above, the Board of Directors of HOCHDORF Holding Ltd deliberates and adopts resolutions on the following matters:

• Annual and investment budgets.
• Annual and half-yearly financial statements.
• Group organisational chart up to and including the Group Management level.
• Payroll policy.
• Assessment of the main risks.
• Investments outside of the budget of more than CHF 0.5 million.
• Multi-year financial and liquidity planning.
• Strategy-relevant partnerships and agreements, in particular purchase and sale of investments, companies, parts of companies, business branches and rights to products or intellectual property rights.
• Foundation and dissolution of companies.
• Nomination of candidates for the Board of Directors  for the attention of the General Meeting.
• Election of the members of the Boards of Directors of the subsidiaries.
• Group regulations of strategic importance.

The Board of Directors fully delegates all remaining areas of company management to the CEO, who has the right to issue directives to the other members of the Group Management. The Board of Directors may – on a case-by-case basis or in connection with its general reservation of competencies – intervene at any time in the duties and competencies of hierarchically subordinate bodies and assume control of the business conducted by these bodies («powers reserved»).

The CEO chairs the Group Management. The chair leads, monitors and coordinates the members of the Group Management and supplies them with the authorisations required to fulfil their roles. Under the law, Articles of Association and organisational regulations governing the HOCHDORF Group, the chair holds the necessary authorisations to manage the HOCHDORF Group. In particular, the chair is responsible for the following tasks:

• Implementing the strategic objectives, defining key operational areas and priorities as well as ensuring the availability of the material and staffing resources required to fulfil these.
• Managing, monitoring and coordinating the remaining members of the Group Management.
• Convening, preparing and presiding over Group Management meetings.
• Regularly informing the Chairman of the Board of Directors/the entire Board of Directors about the business development. In the event of important or unexpected business occurrences, the Chairman of the Board of Directors is to be informed without delay.
• Representing the Group both internally and externally.

The members of the Group Management manage the daily business independently. In this regard, the competencies and responsibilities are determined especially by the budget approved by the Board of Directors and the strategy defined by it, as well as by the organisational regulations of the HOCHDORF Group.

At all meetings, the Chairman, the Committee Chairs, the CEO, the CFO and, depending on the agenda item, other members of the Group Management inform the Board of Directors on matters concerning the business development, financial situation and key business occurrences. The Chairman receives information from the CEO at least every three weeks and receives the minutes of the Group Management meetings. Extraordinary events are promptly communicated to the members of the Board of Directors via circular.

The HOCHDORF Group’s Management Information System (MIS) consists of management reporting and business and financial reporting. It is available to the Group Management on a monthly basis. The Board of Directors receives monthly business and financial reports. The Group’s consolidated financial statements are generated on a monthly basis and presented to the Board of Directors on a quarterly basis together with detailed explanations.

Other management tools include the company policy and three-year financial planning as well as the strategies of the three business areas Dairy Ingredients, Baby Care, and Cereals & Ingredients. 

At least once a year, the chair of the Audit Committee and the CFO provide the Board of Directors with information for its approval concerning major risks, along with their assessment of how relevant and likely such risks are. The Board of Directors monitors the implementation of the risk management measures that are defined and to be undertaken by Group Management.

The Audit Committee evaluates the effectiveness of the internal and external control systems, as well as the risk management organisation and process, in the HOCHDORF Group. The external auditor Ernst & Young AG, which is in direct contact with the chair of the Audit Committee, constitutes a further information and control system.