Content

Downloads

Language

Close

No search results. Please enter a different search term.

4 Board of Directors

WSGE_DP_GR_Bild_VR

4.1 Members of the Board of Directors

The Board of Directors consists of nine members. Hugo Gerber, Michel Gobet and Torsten Kreindl stepped down from the Board of Directors at the Annual General Meeting held on 6 April 2016. Roland Abt, Valérie Berset Bircher and Alain Carrupt were elected as new members of the Board of Directors. The representative of the Swiss Confederation, Hans Werder, will step down from the Board of Directors at the Annual General Meeting on 3 April 2017. The Swiss Confederation has delegated Renzo Simoni as his successor. Renzo Simoni (born 1961), a Swiss national, has a doctorate in civil engineering from the Swiss Federal Institute of Technology and has been Chairman of the Management Board at AlpTransit Gotthard AG since 2007.

Members of the Board of Directors at 31 December 2016 are as follows:


Name
 
Nationality
 
Year of birth
 
Function
  Taking office at the
Annual General Meeting
  Appointed until
Annual General Meeting
Hansueli Loosli 1   Switzerland   1955   Chairman   2009   2017
Roland Abt   Switzerland   1957   Member   2016   2017
Valérie Berset Bircher   Switzerland   1976   Member, representative of the employees   2016   2017
Alain Carrupt   Switzerland   1955   Member, representative of the employees   2016   2017
Frank Esser   Germany   1958   Member   2014   2017
Barbara Frei   Switzerland   1970   Member   2012   2017
Catherine Mühlemann   Switzerland   1966   Member   2006   2017
Theophil Schlatter   Switzerland   1951   Deputy Chairman   2011   2017
Hans Werder 2   Switzerland   1946   Member, representative of the Confederation   2011   2017
1 Since 1 September 2011 Chairman.
2 Designated by the Swiss Confederation.

4.2 Education, professional activities and affiliations

Details on the education and professional career of each member of the Board of Directors are provided below. This section also discloses the mandates each Board member holds outside the Group as well as other significant activities such as permanent functions in important interest groups.

Pursuant to the Articles of Incorporation, Board members may perform no more than three additional mandates in listed companies and no more than ten additional mandates in non-listed companies. In total, they may not perform more than ten such additional mandates. These restrictions on the number of mandates do not apply to mandates performed by a Board member by order of Swisscom or to mandates in interest groups, charitable associations, institutions and foundations or employee retirement-benefit foundations. However, the total number of these mandates is also limited to ten and seven respectively. Prior to accepting new mandates outside the Swisscom Group, the Board members are obligated to consult the Chairman of the Board of Directors. Details on the regulation of external mandates, in particular the definition of the term “mandate” and information on other mandates that do not fall under the aforementioned numerical restrictions for listed and non-listed companies, are set out in Article 8.3 of the Articles of Incorporation. No member of the Board of Directors exceeds the limits set for mandates.

See www.swisscom.ch/​basicprinciples
WSGE_DP_GR_Bild_Loosli

Hansueli Loosli

Education: Commercial apprenticeship; Swiss Certified Expert in Financial Accounting and Controlling

Career history: 1982–1985 Mövenpick Produktions AG, Adliswil, Controller and Deputy Director; 1985–1992 Waro AG, Volketswil, most recently as Managing Director; 1992–1996 Coop Switzerland, Wangen, Director of Non-Food Product Procurement; 1992–1997 Coop Zurich, Zurich, Managing Director; 1997–2000 Coop Switzerland, Basel, Chairman of the Executive Committee and Coop Group Executive Committee; January 2001–August 2011 Coop Genossenschaft, Basel, Chairman of the Executive Committee

Mandates in listed companies: Mandate of the Coop Group: Chairman of the Board of Directors, Bell AG, Basel

Mandates in non-listed companies: Mandates of the Coop Group: Chairman of the Board of Directors, Coop Group Association, Basel; Chairman of the Board of Directors, Transgourmet Holding AG, Basel; Chairman of the Board of Directors, Coop Mineraloel AG, Allschwil. Other mandates: Member of the Advisory Board Deichmann SE, Essen; member of the Board of Directors, Heinrich Benz AG, Weiach, until December 2016

Mandates by order of Swisscom: Member of the Board of Directors and Executive Committee of economiesuisse

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

WSGE_DP_GR_Bild_Abt

Roland Abt

Education: Doctorate in business administration (Dr. oec.)

Career history: 1985–1987 CFO of a group of companies with operations in the areas of IT and real estate; 1987–1996 Eternit Group (currently Nueva Group): 1987–1991 Head of Group Controlling, 1991–1993 CEO, Industrias Plycem, Venezuela, 1993–1996 Division Manager, Fibre Cement Activities; 1996–2016 Georg Fischer Group: 1996–1997 Chief Financial Officer (CFO), Georg Fischer Piping Systems, 1997–2004 CFO, Agie Charmilles Group (currently Georg Fischer Machine Tools), 2004–December 2016 CFO, Georg Fischer AG, and Member of the Group Executive Board

Mandates in listed companies: Member of the Board of Directors of Conzzeta AG in Zurich

Mandates in non-listed companies: Member of the Board of Directors, Raiffeisenbank, Zufikon

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities: Member of the Regulatory Board and Issuers Committee of SIX Swiss Exchange, Zurich

WSGE_DP_GR_Bild_Berset

Valérie Berset Bircher

Education: Doctorate in law (Dr. iur.)

Career history: 2005 Office of the International Labour Organization (ILO), specialist in employment law in the Department of International Labour Standards; 2006–2007 International Organization for Standardization (ISO), Human Resources Department; since 2007 Deputy Head of the International Labour Affairs section of the State Secretariat for Economic Affairs (SECO) in which role she has served on committees of the United Nations (UN) and the International Labour Organization (ILO) addressing economics, finance and development issues and as a member of the Federal Advisory Committee for the National Contact Points on OECD Guidelines for Multinational Companies and the tripartite ILO Committee; 2011–2014 Member of the ILO Board of Directors.

Mandates in listed companies:

Mandates in non-listed companies:

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

WSGE_DP_GR_Bild_Carrupt

Alain Carrupt

Education: Swiss school-leaving certificate in economics

Career history: 1978–1994 PTT companies, most recently as Head of Administration at the telecoms directorate in Sion; 1994–2000 PTT Union, Central Secretary of the Tele­communications sector; 2000–2010 Communications Union: 2000–2002 Deputy General Secretary and Head of Personnel, 2003–2008 Vice Chairman, 2008–2010 Chairman; 2011–2016 syndicom Trade Union: 2011–2013 Joint Chairman, 2013–February 2016 Chairman

Mandates in listed companies:

Mandates in non-listed companies: Member of the SUVA Board of Directors until June 2016

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities: – 

WSGE_DP_GR_Bild_Esser

Frank Esser

Education: PhD in business administration, Dr. rer. pol.

Career history: 1988–2000 Mannesmann Deutschland, most recently from 1996 as a member of the Executive Board of Mannesmann Eurokom; 2000–2012 Société Française Radiotéléphonie (SFR): 2000–2002 Chief Operating Officer (COO), 2002–2012 CEO, in this function from 2005–2012 also a member of the Group Executive Board of the Vivendi Group

Mandates in listed companies: Member of the Board of Directors, AVG Technologies N.V., Amsterdam, until September 2016; member of the Supervisory Board, Dalenys Group S.A (formerly Rentabiliweb Group S.A.S.), Brussels; member of the Board of Directors, InterXion Holding N.V., Amsterdam

Mandates in non-listed companies:

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

WSGE_DP_GR_Bild_Frei

Barbara Frei

Education: Degree in mechanical engineering, ETH; doctorate (Dr. sc. techn.), ETH; Master of Business Administration, IMD Lausanne

Career history: 1998–November 2016 ABB Group in various managerial positions, including, in particular, 2008–2010 ABB s.r.o., Prague, Country Manager; 2010–2013 ABB S.p.A., Sesto San Giovanni (Italy), Country Manager and Regional Manager Mediterranean; November 2013–December 2015 Drives and Control Unit, Managing Director; 2016 Head of Strategic Portfolio Reviews for the Power Grids division; since December 2016 Schneider Electric, Paris: Zone President Germany and Chairman of the Executive Committee of Schneider Electric GmbH, Germany

Mandates in listed companies:

Mandates in non-listed companies:

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

WSGE_DP_GR_Bild_Muehlemann

Catherine Mühlemann

Education: Lic. phil I; Swiss Certified PR Consultant

Career history: 1994–1997 Swiss Television DRS, Head of Media Research; 1997–1999 SF1 and SF2, Programme Researcher; 1999–2001 TV3, Programme Director; 2001–2003 MTV Central, Managing Director; 2003–2005 MTV Central & Emerging Markets, Managing Director; 2005–2008 MTV Central & Emerging Markets and Viva Media AG (Viacom), Managing Director; since 2008 Andmann Media Holding GmbH, Baar, partner, until December 2012 owner

Mandates in listed companies: Member of the Supervisory Board, Tele Columbus AG, Berlin

Mandates in non-listed companies: Vice-Chair of Switzerland Tourism

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

WSGE_DP_GR_Bild_Schlatter

Theophil Schlatter

Education: Degree in business administration (lic. oec. HSG); qualified public accountant

Career history: 1979–1985 STG Coopers & Lybrand, public accountant; 1985–1991 Holcim Management und Beratung AG, controller; 1991–1995 Sihl Papier AG, CFO and member of the Executive Committee; 1995–1997 Holcim (Switzerland) Ltd, Head of Finance/Administration and member of the Executive Committee; 1997–2011 Holcim Ltd., CFO and member of the Group Executive Board

Mandates in listed companies:

Mandates in non-listed companies: Chairman of the Board of Directors, PEKAM AG, Mägenwil until April 2016; member of the Board of Directors, Schweizerische Cement-­Industrie-Aktiengesellschaft, Rapperswil-Jona

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

WSGE_DP_GR_Bild_Werder

Hans Werder

Education: Doctorate in social science (Dr. rer. soc.); law degree (lic. iur.)

Career history: 1987–1996 Berne Directorate of Public Works, Transport and Energy (BVE), General Secretary; 1996–2010 Federal Department of the Environment, Transport, Energy and Communications (DETEC), General Secretary

Mandates in listed companies:

Mandates in non-listed companies: Member of the Board of Directors, BLS AG, Berne

Mandates by order of Swisscom:

Mandates in interest groups, charitable associations, institutions and foundations, and employee benefit foundations:

Other significant activities:

4.3 Election and term of office

Under the terms of the Articles of Incorporation, the Board of Directors comprises between seven and nine members and, if necessary, the number can be increased temporarily. It currently comprises nine members. Under the Articles of Incorporation of Swisscom Ltd, the Swiss Confederation is entitled to appoint two representatives to the Board of Directors of Swisscom Ltd. Hans Werder is currently the Swiss Confederation’s sole representative. Under the terms of the Telecommuni­cations Enterprise Act (TEA), employees must also be granted appropriate representation on the Board of Directors of Swisscom Ltd. The Articles of Incorporation also stipulate that the Board of Directors must include two employee representatives. These have been Valérie Berset Bircher and Alain Carrupt since the Annual General Meeting of April 2016. Valérie Berset Bircher was nominated by the transfair staff association and Alain Carrupt was nominated by the syndicom trade union. With the exception of the representative of the Swiss Confederation, the Board of Directors of Swisscom Ltd is elected by the shareholders at the Annual General Meeting. The Annual General Meeting elects the members and the Chairman of the Board of Directors and the members of the Compensation Committee individually for a term of one year. The term of office runs until the conclusion of the following Annual General Meeting. Re-election is permitted. If the office of the Chairman is vacant or the number of members of the Compensation Committee falls below the minimum number of three members, the Board of Directors nominates a chairman from among its members or appoints the missing member(s) of the Compensation Committee to serve until the conclusion of the next Annual General Meeting. Otherwise, the Board of Directors constitutes itself.

The maximum term of office for members elected by the Annual General Meeting, as a rule, is a total of twelve years. This flexible arrangement makes it possible for shareholders to extend the maximum term of office in exceptional cases if special circumstances exist. Members who reach the age of 70 retire from the Board as of the date of the next Annual General Meeting. The maximum term of office and age limit for the Federal representative are determined by the Federal Council.

4.4 Independence

In order to determine independence, the Board of Directors applies the criteria set out in the Swiss Code of Best Practice for Corporate Governance. Independent members shall thus mean non-­executive members of the Board of Directors who never were or were more than three years ago a member of the executive management and who have no or comparatively minor business relations with the company. The term of office of a member of the Board of Directors is not a criterion that can be used to assess independence. No members of the Board of Directors hold an executive role within the Swisscom Group or have held such a role in any of the three business years prior to the reporting year. The Board members have no significant commercial links with Swisscom Ltd or the Swisscom Group. The Swiss Confederation, represented on the Board by Hans Werder, holds the majority of the capital and voting rights in Swisscom. Customer and supplier relationships exist between the Swiss Confederation and Swisscom. Details of these are provided in Note 37 to the consolidated financial statements.

See report page 215

4.5 Internal organisation and modus operandi

The Board of Directors is responsible for the strategic and financial management of Swisscom and for supervising the company’s executive management. As the supreme governing body of the Company, it has decision-making authority unless such authority is granted to the Annual General Meeting by law. The Board of Directors has delegated individual tasks to committees. The Board of Directors and the standing committees of the Board of Directors of Swisscom Ltd were organised as follows as at 31 December 2016:

WSGE_DP_GR_InterneOrganisation

The Board of Directors is convened by the Chairman and meets as often as business requires. In the event that the Chairman is unavailable, the meeting is convened by the Vice-Chairman. The CEO, the CFO and the Head of Group Strategy & Board Services regularly attend the meetings of the Board of Directors. The Chairman sets the agenda. Any Board member may request the inclusion of further items on the agenda. Board members receive documents prior to the meeting to allow them to prepare for the items on the agenda. To further ensure appropriate reporting to the members of the Board, the Board of Directors invites members of the Group Executive Board, senior employees of Swisscom, auditors and other internal and external experts, as appropriate, to attend its meetings on specific issues. Furthermore, the Chairman of the Board of Directors and the CEO report to each meeting of the Board of Directors on particular events, on the general course of business and major business transactions, as well as on any measures that have been implemented.

The duties, responsibilities and modus operandi of the Board of Directors as well as its conduct with respect to conflicts of interest are defined in the Organisational Rules and those of the standing committees are defined in the relevant committee regulations.

See www.swisscom.ch/​basicprinciples

The Board of Directors attaches great importance to the ongoing development and continuing education of the Board and its individual members. The Board of Directors and the committees conduct self-assessments, usually once a year and most recently in January 2016. A one-day mandatory training course was held at the beginning of 2016. Each quarter, the members of the Board of Directors also have the opportunity to explore in-depth the upcoming challenges facing the Group and business divisions as part of “company experience days”. The majority of members of the Board of Directors regularly take advantage of these opportunities. In addition, individual members of the Board of Directors attended selected presentations and seminars during the year. New Board members are given a task-specific introduction to their new activity. At this one-day introduction they are provided with an overview of Group management and the current operational challenges; they are also given an in-depth look at topics related to Fastweb and attend task-related training sessions. Whenever possible, the Board of Directors attends the Swisscom Group’s annual management meeting.

The following table gives an overview of the Board of Directors’ meetings, conference calls and circular resolutions in 2016.

    Meetings 1   Conference calls   Circular resolutions
Total   11   3  
Average duration (in hours)   5:30   1:15  
Participation:          
Hansueli Loosli, Chairman   11   3  
Roland Abt 2   6   3  
Valérie Berset Bircher 2   8   3  
Alain Carrupt 2   8   3  
Frank Esser   11   3  
Barbara Frei   11   2  
Hugo Gerber 3   3    
Michel Gobet 3   3    
Torsten Kreindl 3   3    
Catherine Mühlemann   11   3  
Theophli Schlatter, Deputy Chairman   11   3  
Hans Werder   11   3  
1 Two meetings were held over two days.
2 Elected to the Board of Directors as of 6 April 2016.
3 Resigned from the Board of Directors as of 6 April 2016.

4.6 Chairman of the Board of Directors

Hansueli Loosli has been a member of the Board of Directors since 2009 and its Chairman since September 2011. The powers and responsibilities of the Chairman are defined in the Organisational Rules. In the event that the Chairman of the Board of Directors is unavailable, the Vice-Chairman, Theophil Schlatter, assumes his powers and responsibilities.

See www.swisscom.ch/​basicprinciples

4.7 Committees of the Board of Directors

The Board of Directors has three standing committees (Audit, Finance and Compensation) and one ad-hoc committee (Nomination) tasked with carrying out detailed examinations of matters of importance. The committees usually consist of three to six members. As a rule, every member of the Board of Directors always also sits on at least one of the standing committees. Roland Abt, in office since April 2016, did not sit on any committees during the year under review due to his operational role as CFO of Georg Fischer AG until the end of 2016. He did, however, sit in as a guest on individual meetings of the Audit Committee. Subject to being appointed to the Compensation Committee (without voting rights), the Chairman of the Board of Directors is a member of all the standing committees. The committees are chaired by other members, however, who must provide the Board of Directors with an oral report on the activities of the previously held committee meetings at the next meeting of the Board of Directors. All members of the Board of Directors also receive copies of all Finance and Audit Committee meeting minutes. The minutes of the Compensation Committee are provided to the other members of the Board of Directors upon request.

Finance Committee

On behalf of the Board of Directors, the Finance Committee prepares information on corporate transactions, for example, in connection with setting up or dissolving important Group companies, acquiring or disposing of significant shareholdings, and entering into or terminating strategic alliances. The Committee also acts in an advisory capacity on matters relating to major investments and divestments. The Finance Committee has the ultimate decision-making authority when it comes to approving rules of procedure and directives in the areas of Mergers & Acquisitions and Corporate Venturing. Details of the Committee’s activities are set out in the Finance Committee rules of procedure.

See www.swisscom.ch/​basicprinciples

The Finance Committee is convened by the Chairman or at the request of a Committee member as often as business requires. The CEO, the CFO and the Head of Group Strategy and Board Services usually attend meetings of the Finance Committee. Depending on the agenda, other members of the Group Executive Board, the Management Boards of the strategic Group companies and project managers are called upon, as appropriate, to also attend the meetings.

The following table gives an overview of the Finance Committee’s composition, meetings, conference calls and circular resolutions in 2016.

    Meetings   Conference calls   Circular resolutions
Total   2    
Average duration (in hours)   3:20    
Participation:            
Frank Esser, Chairman   2    
Alain Carrupt 1   2    
Michel Gobet 2      
Torsten Kreindl 3      
Catherine Mühlemann   1    
Hansueli Loosli   2    
1 Elected to the Board of Directors as of 6 April 2016.
2 Resigned from the Board of Directors as of 6 April 2016.
3 Chairman, resigned from the Board of Directors as of 6 April 2016.
Audit Committee

The Audit Committee handles all financial management business (for example, accounting, financial controlling, financial planning and financing), assurance (risk management, the internal control system, compliance and the internal audit) and the external audit. It also handles matters dealt with by the Board of Directors that call for specific financial expertise (dividend policy, for example). The Committee is the Board of Directors’ most important controlling instrument and is responsible for monitoring the Group-wide assurance functions. It formulates positions on business matters which lie within the decision-making authority of the Board of Directors and has the final say on those business matters for which it has the corresponding competence. Details of the Committee’s activities are set out in the Audit Committee rules of procedure.

See www.swisscom.ch/​basicprinciples

The Chairman of the Audit Committee, Theophil Schlatter, is a financial expert. Since April of 2016, half of the Committee’s members have possessed experience in finance and accounting. Roland Abt, financial expert, sat in on two meetings as a guest in the year under review and has been a member of the Committee since 2017.

The members of the Audit Committee neither work for Swisscom in an executive capacity at presentnor have they done so in the past, nor do they have any significant commercial links with Swisscom Ltd or the Swisscom Group. Customer and supplier relationships exist between the Swiss Confederation and Swisscom. Details of these are provided in Note 37 to the consolidated financial statements.

See report page 215

The Audit Committee is convened by the Chairman or at the request of a Committee member as often as business requires, but at least four times a year. The CEO, CFO, Head of Group Strategy & Board Services, Head of Accounting, Head of Internal Audit and the external auditors attend the Audit Committee meetings. Depending on the agenda, other Swisscom management members are called upon to attend. The Audit Committee can also involve independent third parties such as lawyers, public accountants and tax experts as required.

The following table gives an overview of the Audit Committee’s composition, meetings, conference calls and circular resolutions in 2016.

    Meetings   Conference calls   Circular resolutions
Total   5    
Average duration (in hours)   5:25    
Participation: 1            
Theophil Schlatter, Chairman 2   5    
Valérie Berset Bircher 3   4    
Hugo Gerber 4   1    
Hans Werder   5    
Hansueli Loosli   5    
1 Roland Abt, financial expert has attended two meetings as guest.
2 Financial expert.
3 Elected to the Board of Directors as of 6 April 2016.
4 Resigned from the Board of Directors as of 6 April 2016.
Compensation Committee

For information on the Compensation Committee, refer to the section “Remuneration Report”.

See report page 131
Nomination Committee

The Nomination Committee is formed on an ad-hoc basis for the purpose of preparing the groundwork for electing new members to the Board of Directors and the Group Executive Board when needed. The Committee is presided over by the Chairman and its composition is determined on a case-by-case basis. The Committee carries out its work based on a specific requirements profile defined by the Board of Directors and presents suitable candidates to the Board of Directors. The Board of Directors appoints the members of the Group Executive Board or decides upon the motion to be submitted to the Annual General Meeting for the election and approval of members of the Board of Directors. No Nomination Committee was formed in the 2016 financial year. In 2015 and in January 2016, the Chairman and one or two other members of the Board of Directors examined and interviewed suitable candidates for Board of Director elections which took place in April 2016. They provided periodic reports on these activities to the Board of Directors. The candidates evaluated were also introduced in person to the other members of the Board of Directors at Board meetings.

4.8 Assignment of powers of authority

The Telecommunications Enterprise Act (TEA) makes reference to the Swiss Code of Obligations regarding the non-transferable and irrevocable duties of the Board of Directors of Swisscom Ltd. Pursuant to Article 716a of the Code of Obligations, the Board of Directors is responsible first and foremost for the overall management and supervision of persons entrusted with managing the company’s operations.

It decides on the appointment and removal of members of the Group Executive Board of Swisscom Ltd. The Board of Directors also determines the strategic, organisational, financial planning and accounting guidelines, taking into account the four-year targets set by the Federal Council in accordance with the provisions of the Telecommunications Enterprise Act (TEA) and the will of the Swiss Confederation in its role as principal shareholder.

See www.swisscom.ch/​targets_2014-2017

The Board of Directors has delegated day-to-day business management to the CEO in accordance with the TEA, the Articles of Incorporation and the Organisational Rules. In addition to those duties which are incumbent on it by virtue of law, the Board of Directors decides on business transactions of major importance to the Group, such as the acquisition or disposal of companies with a financial exposure in excess of CHF 20 million and capital expenditures or divestments with a financial exposure in excess of CHF 50 million. The division of powers between the Board of Directors and the CEO is set out in Annex 2 to the Organisational Rules (see function table in Rules of Procedure and Accountability).

See www.swisscom.ch/​basicprinciples

4.9 Information instruments of the Board of Directors vis-à-vis the Group Executive Board

The Board of Directors is briefed comprehensively in order to enable it to fulfil its powers and responsibilities. The Chairman of the Board of Directors and the CEO meet at least once a month to discuss fundamental issues concerning Swisscom Ltd and its Group companies. The Chairman also meets in person with each member of the Group Executive Board as well as the heads of other Group and business divisions once a year for an in-depth discussion of topical issues.

At every ordinary meeting of the Board of Directors, the CEO also provides the Board of Directors with detailed information on the course of business, major projects and events, and any measures adopted. Every month, the Board of Directors receives a report containing all key performance indicators relating to the Group and the segments. In addition, the Board of Directors receives a quarterly report on the course of business, financial position, results of operations, cash flows and risk position of the Group and the segments. It also receives projections for operational and financial developments for the current financial year. The management reporting is carried out in accordance with the same accounting principles and standards as external financial reporting. It also includes key non-financial information that is important for controlling and steering purposes. Every member of the Board of Directors is entitled to request information on all matters relating to the Group at any time, provided this does not conflict with the provisions regarding the exclusion of a member from Board deliberations or confidentiality obligations. The Board of Directors is informed immediately of any events of an exceptional nature.

The Board of Directors addresses the verbal and written reports of the assurance functions of risk management, the financial reporting internal control system (ICS) and compliance management once a year. The Audit Committee examines the reports of the Risk Management unit, the ICS and Internal Audit on a quarterly basis. In urgent cases the Chairman of the Audit Committee is informed without delay about any significant new risks. He is also informed in a timely manner if there is a significant change in estimated compliance or ICS risks or if serious breaches in compliance (including violation of rules that are designed to ensure reliable financial reporting) are detected or are currently being investigated.

4.10 Controlling instruments of the Board of Directors vis-à-vis the Group Executive Board

The Board of Directors is responsible for establishing and monitoring the Group-wide assurance functions of risk management, internal control system, compliance and internal audit.

4.10.1 Risk management

The Board of Directors has set the objective of protecting the company’s enterprise value through the implementation of Group-wide risk management. A corporate culture that is conscious of risks and opportunities facilitates the achievement of this objective. Swisscom has thus implemented a Group-wide, central risk management system. This takes account of external and internal events and is based on the established standards COSO II and ISO 31000. It covers risks in the areas of strategy (including market risks), operations (including finance risks), compliance and financial reporting. Swisscom engages in level-appropriate, comprehensive reporting and maintains appropriate documentation. The objective is to identify, assess and address significant risks and opportunities in good time. To this end, the central Risk Management unit, which reports to both the CFO and the Controlling department, collaborates closely with the Controlling department, the Strategy department, other assurance functions and line functions. Swisscom assesses its risks and their quantitative effects in the event of occurrence. The risks are managed on the basis of a risk strategy. The risks are evaluated in terms of their impact on key performance indicators. Swisscom reviews and updates its risk profile on a quarterly basis. The Audit Committee and the Group Executive Board are informed about significant risks, their potential effects and the status of remedial measures on a quarterly basis, and the Board of Directors on a semi-annual basis. Significant risk factors are described in the Risks section of the Management Commentary.

See report pages 92—95
4.10.2 Financial reporting internal control system

The internal control system (ICS) ensures the reliability of financial reporting with an appropriate degree of assurance. It acts to prevent, uncover and correct substantial errors in the consolidated financial statements, the financial statements of the Group companies and the Remuneration Report. The ICS encompasses the following internal control components: control environment, assessment of financial statement accounting risks, control activities, monitoring activities, information and communication. The Accounting unit, which is attached to Group Business Steering, and Internal Audit periodically monitor the functioning and effectiveness of the ICS. Significant shortcomings in the ICS identified during the monitoring activities are reported together with the corrective measures in a status report to the Audit Committee on a quarterly basis and to the Board of Directors on an annual basis. Corrective measures to remedy the shortcomings are monitored centrally. The Audit Committee assesses the performance and reliability of the ICS on the basis of the periodic reporting.

4.10.3 Compliance management

The Board of Directors has set the objective of protecting the Swisscom Group and its executive bodies and employees against legal sanctions, financial losses and reputational damage by ensuring Group-wide compliance. A corporate culture which promotes willingness to behave in a way that complies with the relevant regulations facilitates the achievement of this objective. Swisscom has therefore implemented a Group-wide, central compliance system. Within the framework of this system, every year Group Compliance, a specialist unit of the Group legal department, applies a risk-based approach to identifying areas of legal compliance that require monitoring by the central system. Within these areas of legal compliance, the business activities of the Group companies are reviewed periodically in a proactive manner in order to identify risks in good time and determine the required measures. The employees affected are informed of these measures and the measures’ implementation is monitored. Group Compliance reviews the suitability and effectiveness of the system annually. Within the Swisscom Health AG business division and in the area of billing for added-value services of Swisscom Switzerland Ltd, an annual audit of the implemented measures is also performed by external auditors (financial intermediation) in accordance with the Money Laundering Act. Group Compliance informs the Risk Management unit on a quarterly basis of any significant risks that are identified and reports to the Audit Committee and the Board of Directors once per year on its activities and risk assessments. Should there be significant changes in the risk assessment or if serious breaches are identified, the Chairman of the Audit Committee is informed in a timely manner.

4.10.4 Internal audit

Internal auditing is carried out by the Internal Audit unit. Internal Audit supports the Swisscom Ltd Board of Directors and its Audit Committee in fulfilling their statutory and regulatory supervisory and controlling obligations. Internal Audit also supports management by highlighting areas of potential for improving business processes. It documents the audit findings and monitors the implementation of measures.

Internal Audit is responsible for planning and performing audits throughout the Group in compliance with professional auditing standards. It conducts an objective evaluation and audit of the appropriateness, efficiency and effectiveness of, in particular, the governance and control systems of the operational processes as well as the assurance functions of risk management, the internal control system and compliance management in all organisational units of the Swisscom Group.

Internal Audit possesses maximum independence. It is under the direct control of the Chairman of the Board of Directors and reports to the Audit Committee. At its meetings, which are held at least on a quarterly basis, the Audit Committee is briefed on audit findings and the status of any corrective measures implemented. In addition to ordinary reporting, Internal Audit informs the Audit Committee of any irregularities which come to its attention. At the administrative level, Internal Audit provides reports to the Head of Group Strategy & Board Services.

Internal Audit liaises closely and exchanges information with the external auditors. The external auditors have unrestricted access to the audit reports and audit documents of Internal Audit. Internal Audit closely coordinates audit planning with the external auditors. The integrated strategic audit plan, which includes the coordinated annual plan of both the internal and external auditors, is prepared annually on the basis of a risk analysis and presented to the Audit Committee for approval. Independently of this audit, the Audit Committee can commission special audits based on information received on the whistle-blowing platform operated by Internal Audit. This reporting procedure approved by the Audit Committee ensures the anonymous and confidential receipt and handling of objections raised relating to external reporting, financial reporting and assurance function issues. The Chairman of the Board of Directors and the Chairman of the Audit Committee are informed of notifications received and a report is drawn up on a quarterly basis for the Audit Committee.