Organizational Regulations
1 General Provisions
1.1 Basics
1 These organizational regulations (the "Rules") are adopted by the board of directors (the "Board") of SIG Group AG (the "Company" and together with its subsidiaries, the "Group") pursuant to article 716a and 716b of the Swiss Code of Obligations ("CO") and article 19 of its Articles of Association (the "Articles").
1.2 Corporate Bodies
2 These Rules govern the internal organization and corporate governance as well as functions, powers and duties of the following corporate bodies and persons (the "Corporate Bodies"):
(i) the Board and the members of the Board (the "Board Members"), including its chair (the "Chair") and any vice-chair (the "Vice-Chair"), and the secretary of the Board (the "Secretary");
(ii) the committees of the Board (the "Board Committees") established pursuant to Swiss law, the Articles and these Rules; and
(iii) the group executive board of the Company (the "Group Executive Board") under the leadership of the chief executive officer (the "CEO").
1.3 Scope and Purpose
3 These Rules shall ensure that the Group's business is guided, directed and managed according to clear principles.
4 The purpose of these Rules is in particular to (i) implement and supplement rules contained in laws applicable to the Company, regulatory and stock exchange rules, and the Articles, and (ii) to define in additional detail the functions, responsibilities and authorities of the Corporate Bodies.
5 These Rules are complemented by (i) the committee charters ("Committee Charters"), as adopted by the Board from time to time, which specify the responsibilities of the Board Committees and (ii) the chart of key approval authorities ("Key Approval Authorities") which specify approval authorities for certain matters in more detail.
1.4 Organization of the Group
6 The Company, as the listed parent company of the Group, controls directly or indirectly all subsidiaries (which, for the avoidance of doubt, shall include all types of legal entities controlled directly or indirectly by the Company) of the Group. The Company fulfils strategic, financial and management functions not only for itself, but also with respect to the Group companies and entities. In view of this groupwide function, the Board and the other Corporate Bodies in general have to make determinations on matters that pertain to both the Company and its subsidiaries. Notwithstanding this, the Company respects the legal independence of all its subsidiaries according to applicable law. It sets standards for the Group to allow for an efficient and harmonized steering of the Group subject to applicable legal limitations.
2 Board
2.1 Constitution
7 The general meeting of the Company (the "General Meeting") elects the Chair and the other Board Members in accordance with article 18 of the Articles.
8 Subject to applicable law and the Articles, the Board constitutes itself and may elect a Vice-Chair from among its ranks. The Board shall appoint a Secretary, who does not need to be a member of the Board. The Secretary shall participate in the deliberations and discussions of the Board, but shall not vote, unless he or she is a member of the Board.
2.2 Responsibilities
9 The Board, acting collectively, has the ultimate responsibility for the conduct of business of the Company and for delivering sustainable shareholder and stakeholder value. The Board sets the Company's strategic aims, ensures that the necessary financial and human resources are in place to meet the Company's objectives and supervises and controls the management of the Company. It may take decisions on all matters that are not expressly reserved to the General Meeting or to another Corporate Body by law, by the Articles or these Rules.
2.2.1 Strategy and Operation
10 The Board's ultimate responsibility for the strategy and operation of the Group includes in particular:
(i) determining the overall business strategy, taking into account the information, proposals and alternatives presented by the CEO;
(ii) setting the risk profile and the risk capacities of the Group;
(iii) setting financial objectives and approving, via the budget and financial planning process, the necessary means to achieve these objectives, including approving a capital allocation framework;
(iv) deciding on the Group entering into substantial new business areas or exiting from a substantial existing business area, in each case insofar as not covered by the current approved strategic framework; and
(v) approving all matters and business decisions where such decisions exceed the authority delegated by the Board to the Board Committees, the CEO or the Group Executive Board.
2.2.2 Finance
11 With respect to the ultimate responsibility for finance, the Board has in particular the following duties:
(i) laying down principles for accounting, financial and risk control and approving significant changes to them;
(ii) reviewing and approving annually the financial business plan;
(iii) reviewing and approving the annual statements of the Company; and
(iv) reviewing and approving the annual report and the compensation report prior to its submission to the General Meeting.
2.2.3 Organization
12 With respect to the organization of the Company, the Board is in particular responsible for:
(i) approving and regularly reviewing the governance principles and the management structures as set out in these Rules;
(ii) approving the framework of an internal control system;
(iii) approving and regularly reviewing internal regulations (including these Rules and the Committee Charter) and directives;
(iv) appointing and removing the CEO, the Board Committees (except for the Compensation Committee) and the Group Executive Board and reviewing their performance in meeting agreed goals and objectives and compliance with applicable laws, rules and regulations;
(v) approving the compensation policy of the Company; and
(vi) proposing for election, re-election or removal by the General Meeting the external auditors as recommended by the Audit and Risk Committee.
2.2.4 Further responsibilities
13 Further details of the authorities and responsibilities of the Board may be set out in the Key Approval Authorities.
2.3 Delegation
14 Within the limits of mandatory law and the Articles, the Board delegates:
(i) certain of its responsibilities and authorities to the Committees as set out in the Committee Charters;
(ii) the management of the business to the Group Executive Board pursuant to section 4.
15 Subject to mandatory law and the Articles, the Board may delegate further responsibilities to the Committees, single Board Members or the Group Executive Board from time to time.
2.4 Meetings, Convocation of Meetings
16 Meetings of the Board of Directors shall be held as often as the business requires but as a general rule at least 4 times per year. Meetings are convened by the Chair if and when the need arises or whenever a Board Member or the CEO, indicating the reasons, so requests in writing.
17 Notice of meetings, shall be given at least five days prior to the meeting (by regular mail, e-mail, facsimile or any other appropriate means o felectronic communication) and the notice shall set forth the agenda so that Board Members may have a reasonable understanding of the business intended to be conducted at the meeting. In urgent cases (as determined by the Chair in his or her discretion), a meeting may be held on appropriate shorter notice.
18 Board Members shall be provided with all necessary supporting materials at least two days prior to the meeting. If the Chair deems it necessary, supporting materials may be provided later to allow the Board to receive the latest available information. This applies in particular to updates on financial data.
19 Board meetings may be held in person, by telephone, by video conference or any other appropriate means of electronic communication.
20 Board meetings are chaired by the Chair, or in his or her absence by any Vice-Chair (including any Vice-Chair appointed by the attending Board Members solely for the purpose of any such meeting at which the Chair is absent).
21 The minutes shall set forth all passed resolutions and reflect in a general manner the considerations which led to the decisions taken.
22 The minutes must be signed by the Chair (or any Vice-Chair in respect of a meeting at which the Chair was not present) and the Secretary. They shall be made available for review prior to and approved at the next board meeting. Board Members are entitled to examine the board minutes of any board meeting at any time.
2.5 Presence, Quorum and Passing of Resolutions
23 In order to pass resolutions, not less than a majority of the Board Members must be participating in the meeting.
24 The Chair shall determine the non-members who may attend the meetings as guests. Such guests shall not vote on any resolutions considered by the Board.
25 The adoption of resolutions of the Board requires a simple majority of the votes cast. Each Board Member shall have one vote. In the event of a tie, the Chair shall have no casting vote (art. 20 Articles).
26 Resolutions may also be passed by way of circulation (in writing, including by e-mail or any other appropriate means of electronic communication), provided that no Board Member requests (in writing, including by e-mail or any other appropriate means of electronic communication) of the Chair or the Secretary oral deliberation. Board resolutions by means of a written resolutions require the affirmative vote of a majority of all the Board Members.
27 For resolutions concerning the implementation of (already resolved) capital increases (notarized deed) and corresponding amendments to the Articles as well as the preparation of the required report on the capital increase, no invitations to the Board Members shall have to be sent out and no attendance quorum shall be required.
2.6 Information and Reporting
28 Each Board Member shall be entitled to request information concerning all affairs of the Company reasonably necessary to fulfil the fiduciary duties of such Board Member. At the meetings of the Board, all Board Members and all members of Group Executive Board shall provide such information to the best of their knowledge. Unless otherwise directed in particular instances by the Chair, or by the chair of any Committee as relates to documents pertaining to that Committee, the agenda, presentations and minutes distributed to the members of any Committee shall be made available to all Board Members.
29 Should a Board Member require information or wish to review documents outside the meetings of the Board, he or she must address his or her request in writing to the Chair.
30 To the extent necessary to fulfil his or her duties, each Board Member may request in writing that the Chair authorizes the inspection of the books and records of the Company. If the Chair rejects a request for information, hearing or inspection, the Board shall decide whether to grant such request.
2.7 Board self-assessment
31 At least annually, the Board shall review, on the basis of an assessment conducted by the Nomination and Governance Committee, its own performance, as well as the performance of each of the Committees. Such assessment shall seek to determine whether the Board and the Board Committees function effectively and efficiently.
2.8 Chair
32 The Chair shall chair the meetings of the Board and the General Meeting and fulfil such other tasks and duties as are set forth in these Rules.
33 The Chair, together with the CEO, is responsible for ensuring effective communication with shareholders and with stakeholders including government officials, regulators and public organizations.
34 It is intended that the Chair establishes and keeps a close working relationship with the CEO, providing advice and support to him or her. He or she shall seek to facilitate a constructive relationship between the Board, the CEO, and the other Board Committee members.
35 The Chair shall preside over the annual and extraordinary General Meetings of shareholders.
36 Further provisions regarding the authorities and responsibilities of the Chair may be set out in the Key Approval Authorities provided that they do not conflict with these Rules or the Articles.
2.9 Vice-Chair
37 If the Chair is prevented from performing his or her duties (including by reason of a conflict of interest), they will be performed by a Vice-Chair (and if there is no incumbent Vice-Chair, another Board Member may be appointed by the Chair or the Board for such purpose). In such case, the Vice-Chair has all the rights and responsibilities otherwise pertaining to the Chair. If a Vice-Chair is appointed, he or she shall have such functions as may be directed from time to time by the Chair or the Board and shall generally establish and maintain the relationship set forth in N 34 above.
2.10 Secretary
38 The Secretary shall support the Chair in preparing the agenda for each board meeting, keep the board minutes, and assist the Board, the Chair and any Vice-Chair to coordinate and fulfil their duties and assignments.
39 The Secretary is responsible for keeping the Company's official company documents and records.
3 Board Committees
40 Subject to the powers of the General Meeting, the Board may establish Board Committees for specific areas. The permanent Board Committees are the nomination and governance committee (the "Nomination and Governance Committee"), (ii) the compensation committee (the "Compensation Committee"); and (iii) the audit and risk committee (the "Audit and Risk Committee").
41 The Board may set up other Board Committees from time to time. When appointing or constituting a Board Committee, the Board may establish a Committee Charter for it.
42 Subject to the election of Compensation Committee members by the General Meeting, the Board appoints among its Members the members of the Board Committees ("Committee Members") and the chairpersons of the respective Board Committees.
43 The Committee Charters set out the duties, mission and responsibilities as well as the reporting by the Committees.
4 Management
4.1 Delegation
44 Except as otherwise provided for by applicable laws, rules and regulations, the Articles or these Rules, the Board delegates the management of the business to the Group Executive Board acting under the CEO’s leadership.
45 The CEO may in turn further delegate in writing certain responsibilities and authorities to other executives and committees and may empower them to further delegate their responsibilities and authorities, provided that any such delegation is clearly defined and includes a statement of reporting responsibility.
4.2 CEO
4.2.1 General
46 The CEO shall be appointed by the Board upon recommendation of the Nomination and Governance Committee for an indeterminate term.
47 The CEO is the highest executive officer of the Group and has responsibility and accountability for the management and performance of the Group. The Group Executive Board acts under his or her leadership.
4.2.2 Responsibilities
48 In particular, the CEO shall have the following powers and duties:
(i) implementing the strategy of the Company and the decisions taken by the Board and the Board Committees;
(ii) monitoring and assessing progress against the Company's target and budget;
(iii) preparing and submitting to the Board for approval the matters that are subject to the Board's approval according to law, the Articles, or these Rules;
(iv) managing, supervising, and coordinating the ongoing business operations of the Company;
(v) determining the communication policy of the Company and representing, or directing the representation of, the Company towards its shareholders and third parties; and
(vi) making recommendations to the Board and to the Compensation Committee regarding the membership of the Group Executive Board.
49 Further details of the authorities and responsibilities of the CEO may be set out in the Key Approval Authorities.
4.2.3 Relationship with Group Executive Board and information of the Board
50 The CEO may involve the Group Executive Board or members of it, in his or her discretion, in all relevant matters and resolutions pertaining to his powers and duties. Subject to these Rules and mandatory provisions of law, he or she shall be entitled to delegate some of his or her duties to other members of the Group Executive Board or to third parties, it being understood that the CEO remains fully responsible for all duties and competencies delegated to him or her by the Board.
51 The CEO shall regularly inform the Board at its meetings on the current course of business and all major business matters of the Company including anticipated opportunities and risks. Extraordinary matters including significant unanticipated developments shall immediately be reported to the Chair.
4.3 Group Executive Board
4.3.1 Constitution
52 The Group Executive Board shall include as a minimum the CEO, the chief financial officer (the "CFO"), and such other offices as may be determined by the Board from time to time. The Group Executive Board shall be chaired by the CEO.
53 All members of the Group Executive Board, other than the CEO, are appointed and removed by the Board upon recommendation of the Nomination and Governance Committee in consultation with the CEO.
4.3.2 Responsibilities
54 The Group Executive Board, under the leadership of the CEO, shall be responsible to the Board for the management of the Company. It shall implement the strategy of the Company under the lead of the CEO decided by the Board and shall ensure the execution of the decisions of the Board in accordance with the law, the Articles, these Rules, and the resolutions of the General Meeting.
55 Further details of the authorities and responsibilities of the Group Executive Board may be set out in the Key Approval Authorities, provided that they do not conflict with these Rules or the Articles.
4.3.3 Meetings and Resolutions
56 Meetings of the Group Executive Board shall generally take place as determined by the CEO, with the expectation that there would be not fewer than six such meetings per calendar year.
57 The resolutions of the Group Executive Board are taken by the majority of the members of the Group Executive Board present. The CEO has the power to overrule any Group Executive Board resolution.
58 The Group Executive Board shall take note on a regular basis of the reports of the CFO regarding the financial situation of the Company as well as of the other members' reports in the meetings of the Group Executive Board.
5 Group Internal Audit
5.1 Responsibilities
59 The internal audit function of the Company ("Group Internal Audit") shall examine and evaluate the adequacy and effectiveness of the Group's internal control environment, and the quality of performance in carrying out assigned responsibilities to achieve the Group's goals and objectives.
60 In fulfilling its responsibilities, Group Internal Audit shall:
(i) assess the effectiveness of processes to define strategy and risk management; and
(ii) assess the effectiveness and adequacy of internal controls; and
(iii) perform such other functions as may be requested of it by the Audit and Risk Committee or in the charter of such committee.
61 The head of the Group Internal Audit (the "Head Internal Audit") shall directly report to the CFO and additionally (dotted line) to the chair of the Audit and Risk Committee. The Head Internal Audit leads the Group Internal Audit and shall ensure that it fulfills its responsibilities. The Head Internal Audit shall:
(i) provide the Audit and Risk Committee with a regular report on the result of internal audits;
(ii) inform the Audit and Risk Committee about significant findings during the year; and
(iii) provide any additional information reasonably requested by the Audit and Risk Committee that pertains to the internal audit function.
5.2 Organization
62 The organizational structure of the Group Internal Audit and resource requirements necessary for the Group Internal Audit to perform its activities shall be proposed by the Head Internal Audit following consultation with the CFO and be submitted to the chair of the Audit and Risk Committee for approval.
5.3 Independence
63 The Group Internal Audit performs its internal audit activities with independence and objectivity. It shall have no direct operational responsibility or authority over any of the activities they review.
64 Group Internal Audit shall coordinate its activities with other assurance functions in the Group and the external auditor.
6 Miscellaneous
6.1 Duty of Care and Loyalty
65 Each Board Member and each member of the Group Executive Board shall be under a duty to carry out his or her responsibilities with due care and to safeguard the best interests of the Company which includes devoting the attention and time necessary for the fulfillment of the duties assigned to them.
6.2 Conflicts of Interests
66 The Board Members and the members of the Group Executive Board shall arrange their personal and business affairs so as to avoid, as much as possible, a conflict of interest.
67 Furthermore, each Board Member and each member of the Group Executive Board shall disclose to the Chair and the CEO, respectively, any conflict of interest arising or relating to any matter to be discussed at a meeting, as soon as the Board Member or member of the Group Executive Board becomes aware of its potential existence.
68 The Chair and the CEO, respectively, shall decide upon appropriate measures to avoid any interference of such conflict of interests with the decision-making of the Company. In the event of doubt, the Chair and the CEO, respectively, shall request the respective corporate body (under exclusion of the members who are subject to the potential conflict of interest) to determine whether a conflict of interest exists and to decide upon appropriate measures.
69 As a rule, subject to exceptional circumstances in which the best interests of the Company dictate otherwise, the Board Member or member of the Group Executive Board shall not participate in the decision-making involving the matter at stake and the portion of any minutes relating to such matter may be withheld from such Board Member or member of the Group Executive Board. The person with a conflict shall have the right to, or may be required by the Chair and the CEO, respectively, to provide a statement of his or her view of the matter.
6.3 Independence Standard for Board Members
70 A majority of the Board Members shall be independent in accordance with the independence criteria set forth in this section 6.3.
71 The Committee Charters set forth to what extent Committee Members must be independent in accordance with the independence criteria pursuant to this section 6.3.
72 The Board of Directors shall determine on an annual basis the independence of each Board Member, and any potential Board nominee, upon recommendation by the Nomination and Governance Committee.
73 To be considered independent, a Board Member shall meet the following independence criteria:
73.1 In accordance with the Swiss Code of Best Practice for Corporate Governance (the "SCBP"), a Board Member shall not be considered independent, if he or she
(i) is employed, or has been employed during the past three (3) years, as a member of the Group Executive Board; and/or
(ii) has any (other than relatively insignificant) business relations with the Group.
73.2 In addition, a Board Member shall not be considered independent, if he or she
(i) is, or has been during the past three (3) years, an employee of the Group; and/or
(ii) is, or has been during the past three (3) years, an employee of the audit firm which acts or has acted as the Group’s external auditor; and/or
(iii) is, or has been during the past year:
(aa) the beneficial owner of 10% or more of the shares in the Company; or
(bb) a board member, an executive officer, an employee or a representative of a holder (or an affiliate thereof) of 10% or more of the shares in the Company; and/or
(iv) has served for more than twelve (12) years on the Board.
73.3 In their independence determination, the Nomination and Governance Committee and the Board may take into account any other facts and circumstances considered relevant (such as, in accordance with the SCBP, cross-directorships) and, based thereon, may determine that a Board Member shall not be considered independent, notwithstanding that such Board Member satisfies the other independence criteria set forth in this section 6.3.
6.4 Signatory Rights
74 If not determined otherwise by the Board, all signatures on behalf of the Company require the signatures of two persons authorized by the Board.
75 The Group Executive Board has the power to issue signatory authority policies and rules throughout the Group, subject to any local requirements applicable to the respective subsidiaries.
6.5 Other offices or investments
76 Any Board Member and any member of the Group Executive Board shall obtain the written consent of the Chair and the Chair himself/herself, as applicable, the written consent of the chair of the Nomination and Governance Committee
prior to:
(i) accepting (i) any board memberships of publicly listed companies and, in the case of members of the Group Executive Board, any listed and non-listed companies, or (ii) any major external appointments. If a Board Member has been qualified by the Board as independent or non-executive, the agreement of the Chair should also be sought before accepting additional commitments that might conflict with that qualification; or
(ii) accepting any board memberships or other role with, or making or holding any investment in, a company or other entity which is or is about to be in competition with the Group, except for investments in a scheme or arrangement (including collective investment funds or investment companies) where the assets of the scheme or arrangement include a multitude of assets and are invested at the discretion of a third party.
77 In addition, any Board Member and any member of the Group Executive Board shall inform the Chair before accepting any membership of boards of directors or other significant commitments involving affiliation with other businesses or governmental units. Changes to such board memberships or significant commitments shall be reported as well.
78 The approval and information requirements for members of the Group Executive Board shall be further set out in their employment agreements.
79 In any case, each Board Member and each member of the Group Executive Board shall comply with the maximum number of offices permitted by the Articles.
6.6 Confidentiality
80 Each Board Member, Group Executive Board member and each member of another Corporate Body must at all times keep strictly confidential all sensitive information – except information which is already in the public domain – relating to the Group which he or she has learned during the performance of his or her duties. Each such individual shall comply with the formal policies of the Company regarding disclosure, non-disclosure, and use of confidential information, regarding ethical conduct, regarding insider trading, and any other comparable matter. Such information may only be disclosed to third parties in accordance with such policies or with prior written clearance from the Chair or the CEO.
6.7 Share Register
81 The Board appoints one or more persons as share registrar (the "Share Registrar"). The Share Registrar may be a third person, which may be an external company and does not need to be located in Switzerland.
82 The Share Registrar shall properly keep the share register. In particular, the Share Registrar shall deal with all technical aspects of the share register and, subject to the paragraph below, assess whether an applicant meets the prerequisites for registration. If deemed appropriate, the Board may enter into agreements with the share registrar detailing his or her duties and responsibilities.
83 The Board may delegate to the Share Registrar or to one or several Board Members all other duties and responsibilities in connection with the keeping of the share register, such as the decisions:
(i) to refuse registration with voting rights in accordance with the Articles;
(ii) to deregister shareholders in accordance with the Articles due to a registration based on false information;
(iii) to enter into agreements with nominees in accordance with the Articles.
6.8 Final Provisions
84 These Rules were adopted by the Board on 27 September 2018 and were last amended on 8 December 2022 with an effective date of 1 January 2023.
85 The Board shall be entitled to issue executive regulations to these Rules.