3. Board of Directors

3.1. Members of the Board of Directors

In 2019, the Board of Directors of HOCHDORF Holding Ltd consisted of seven, or five respectively, non-executive members. No member of the Board of Directors previously belonged to 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 Annual General Meeting for a term of one year, expiring at the time of the next ordinary Annual General Meeting. Re-election is possible. Current members of the Board of Directors who are nominated for re-election, any new members of the Board of Directors and the Chair are elected on individual ballots. All elections and votes are conducted openly, unless a majority requests a secret ballot. The retirement age for members of the Board of Directors is 70. They leave the Board of Directors at the next Annual General Meeting after turning 70. In the reporting period, the Board of Directors underwent the following changes. Prof Holger Karl-Herbert Till and Dr Anton von Weissenfluh submitted their notice of resignation, effective as of the 2019 Annual General Meeting. Dr Daniel Suter and Niklaus Sauter were voted out of office at the 2019 General Meeting. Michiel de Ruiter and Ulrike Sailer announced their resignations as of 30.09.2019. The following were elected as members of the Board of Directors at the 2019 Annual General Meeting: Bernhard Merki, Jörg Riboni, Markus Kalberer and Markus Bühlmann.

Name Born Nationality Member since Elected in Elected until
Bernhard Merki, Chair 1962 Switzerland 2019 2019 2020
Jörg Riboni, Vice Chair 1957 Switzerland 2019 2019 2020
Markus Kalberer 1967 Switzerland 2019 2019 2020
Markus Bühlmann 1962 Switzerland 2019 2019 2020
Dr Walter Locher 1955 Switzerland 2014 2019 2020

3.2. Professional background and other activities and interests

Bernhard Merki

1962; Place of residence: Wangen SZ; Member of the Board of Directors since: 2019, Chair since 2019. Training/degree: Degrees in mechanical engineering (Masch. Ing. HTL)/industrial engineering (Wirtsch. Ing. STV). Professional background: 1988 to 2013, various management positions at Netstal Group, Näfels, most recently from 2003 to 2013 as CEO; 2014 to 2018, CEO of 4B Ltd, Hochdorf. Professional activity: Since 2019, independent entrepreneur with consulting activities. Other activities: Since 2008 member of the University Council of the Hochschule für Technik, (University of Applied Sciences) Rapperswil; since 2010, member of the Board of Directors of Rondo Burgdorf Ltd and Seewer Holding AG; since 2014, member of the Board of Directors of EMS-Chemie-Holding AG; since 2019, member of the Board of Directors of Ferrum AG.

Jörg Riboni

1957; Place of residence: Steinhausen ZG; Member of the Board of Directors since: 2019. Vice Chair since: 2019. Training/degree: Degree in economics (lic. oec.HSG)/certified public accountant. Professional background: 1995 to 1997 CFO of Jelmoli, Zurich;1997 to 2005 CFO of the Sarna Group, Sarnen; 2005 to 2012, CFO of the Forbo Group, Baar; 2013 to 2019 CFO of the Emmi Group, Lucerne. Professional activity: Self employed since May 2019. Other activities: Chair or member of the Board of Directors of various privately-held companies.

Markus Bühlmann

1962; Place of residence: Rothenburg; Member of the Board of Directors since: 2019. Training/degree: Master farmer with advanced specialist qualification. Professional background: Federal VET diploma in agriculture; master farming certificate. Professional responsibilities: Farmer and owner of an agricultural business with milk production and pig breeding in Rothenburg. Other activities: Since 2014, member of the pilot project REDES BLW; since 2015, delegate of the Swiss Farmers’ Union (SFU); since 2015 member of the Central Switzerland Milk Producers Regional Committee (Zentralschweizer Milchproduzenten ZMP); since 2015 member of the Executive Board of Central Switzerland Milk Producers (ZMP); since 2018 member of the Board of Directors of ZMP Invest AG and Vice Chair of ZMP.

Markus Kalberer

1967; Place of residence: Gattikon ZH; Member of the Board of Directors since: 2019 Training/degree: Degree in Business Administration (Betr. oec FH). Professional background: 1995 to 2004 employed in various management positions in Swiss financial institutions; 2004 to 2014, CEO of the Condecta Group, Winterthur. Professional activity: CEO of Lenzlinger Sons Ltd, Nänikon. Other activities: Since 2008, co-owner and member of the Board of Directors of Gottlieber Spezialitäten AG, Gottlieben.

Dr. Walter Locher

1955; Place of residence: St. Gallen; Member of the Board of Directors since: 2014. Training/degree: Doctorate in law (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 Council; member of various Board of Trustees and Board of Directors (including Chair 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.

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); and additionally
  2. five mandates as board member or as member of other top executive or governing bodies of companies within the meaning of Art. 727 (1) no. 2 of the Swiss Code of Obligations (CO); and additionally
  3. ten mandates as board member or as member of other executive or governing bodies of other legal entities that do not meet the aforementioned criteria.

3.3. Functioning of the Board of Directors

The Board of Directors meets at least five times each year and as often as business requires. In 2019, the Board of Directors met for seven regular meetings and 15 extraordinary meetings. In addition, the Chair of the Board of Directors meets with the CEO for work sessions. 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 or other employees 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 a 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 Chair of the Board of Directors has the deciding vote.

3.4. Committees of the Board of Directors

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).

Audit Committee

Members: Jörg Riboni (Chair), Markus Kalberer, Dr Walter Locher. The main tasks of this committee are:

  • Checking the effectiveness of the external and internal 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 remuneration of the auditors and their independence
  • Evaluating the performance and remuneration of the internal auditors and their independence
  • Evaluating the risk management procedure 

In 2019, the Audit Committee met ten times. In addition to the standard agenda items, a special audit was conducted by the outsourced Internal Audit (PWC) as part of risk management, covering the area of Pharmalys Order Management.

Personnel and Remuneration Committee

Members: Dr Walter Locher (Chair), Bernhard Merki, Jörg Riboni. The main tasks of this committee are:

  • Making recommendations for the compensation of the members of the Board of Directors and 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.

Market and Strategy Committee

Members: Markus Bühlmann (Chair), other members not yet appointed. The main tasks 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 the Group Management

The Market and Strategy Committee met two times.

3.5. Group Management and responsibilities

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

  • 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
  • Appointment 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 Annual 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
  • Wage policy
  • Assessment of the main risks
  • Investments outside the budget of more than CHF 0.5 million
  • Multi-year financial and liquidity planning
  • Strategy-relevant partnerships and agreements, in particular the 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 Boards of Directors for the attention of the Annual 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 powers – intervene at any time in the duties and powers of hierarchically subordinate bodies and assume control of the business conducted by these bodies («powers reserved»).

The CEO chairs Group Management. The CEO 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 HOCHDORF, the CEO holds the necessary management authorisations. In particular, the CEO 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 Group Management
  • Convening, preparing and presiding over Group Management meetings
  • Regularly informing the Chair of the Board of Directors/the entire Board of Directors about business development. In the event of important and/or unexpected business occurrences, the Chair of the Board of Directors is to be informed without delay
  • Representing the Group both internally and externally

 

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

3.6. Information and control instruments with regard to Group Management

At all the meetings, the Chair, 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 Chair is regularly informed by the CEO. The Board of Directors receives all the minutes of the Group Management meetings. Extraordinary events are promptly communicated to the members of the Board of Directors via circular.

HOCHDORF’s Management Information System (MIS) consists of management reporting and business and financial reporting. It is available to 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 divisions of 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 the relevance and likelihood of such risks. 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 internal and external control systems, as well as the risk management organisation and process in HOCHDORF. The outsourced internal auditor PriceWaterhouseCoopers Ltd and the external auditor Ernst & Young Ltd, who are in direct contact with the Chair of the Audit Committee, constitute further information and control systems.