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Board of Directors

The Board of Directors has ultimate responsibility for supervising the top-level operational management personnel of the COMET Group. The Board sets the Group's strategic goals and the guidelines for organizational structure and financial planning.

Composition of the Board of Directors of COMET Holding AG

On December 31, 2015 the Board of Directors of COMET Holding AG had the following five members:

         
Name Nationality Position on the Board Member since Elected until
Hans Hess
Dipl. Ing. ETH, MBA USC
Swiss Chairman and
non-executive member
2005 2016
Hans Leonz Notter
Lawyer
Swiss Vice Chairman and
non-executive member
1989 2016
Lucas A. Grolimund
Dipl. Ing. ETH, MBA INSEAD
Swiss Non-executive member 2007 2016
Rolf Huber
Dipl. Ing. ETH
Swiss Non-executive member 2008 2016
Gian-Luca Bona
Prof. Dr.
Swiss Non-executive member 2012 2016

Secretary of the Board of Directors (since 2010) and non-member of the Board:
Ines Najorka, Vice President of Corporate Communications.

Additional information on the members of the Board of Directors

The information below outlines the education, significant professional experience and current position of each Board member. Where a place name is not followed by a country or state, the country is Switzerland.

Hans Hess (b. 1955, Swiss citizen)

Education

Dipl. Werkstoffingenieur (master's) degree in materials science, Federal Institute of Technology (ETH), Zurich; MBA, University of Southern California, Los Angeles, CA

Professional experience

1981 to 1983: development engineer at Sulzer AG, Winterthur; 1983 to 1988: head of PUR business unit, Huber & Suhner AG, Pfäffikon; 1989 to 1993: head of Medical and Stereo Microscopy, director, Leica AG, Heerbrugg; 1993 to 1996: president of Optronics division, Leica AG, Heerbrugg; 1996 to 2005: CEO of Leica Geosystems AG, Heerbrugg; since 2006: president of Hanesco AG, International Management Consulting, Pfäffikon

Hans Leonz Notter (b. 1948, Swiss citizen)

Education

Lawyer

Professional experience

Partner at law firm Notter Mégevand & Partner, Berne, Fribourg, Geneva: practice of business law, foundation law and family office

Lucas A. Grolimund (b. 1966, Swiss citizen)

Education

Dipl. Elektroingenieur master's degree in electrical engineering from Swiss Federal Institute of Technology (ETH), Zurich; M.Sc. degree in electrical engineering from Stanford University, Palo Alto, CA; MBA from INSEAD, Fontainebleau, France

Professional experience

1995 to 2000: McKinsey & Company, Zurich; 2000 to 2003: CFO of Gate Gourmet Group, Opfikon; 2003 to 2007: CEO of Schlatter Holding AG, Schlieren; 2007 to 2009: CEO of Cicor Technologies, Boudry; since 2009: independent consultant

Rolf Huber (b. 1965, Swiss citizen)

Education

Dipl. Ing. Agr. master's degree in agronomy from Swiss Federal Institute of Technology (ETH), Zurich

Professional experience

1993 to 1997: McKinsey & Company, Zurich; 1997 to 1998: member of executive management of Coop Switzerland; 1998 to 2001: CFO of Hero AG and Hero Group; since 2001: independent consultant and partner at Ceres Capital AG; since 2014: CEO of H2 Energy AG, Zurich

Gian-Luca Bona (b. 1957, Swiss citizen)

Education

Dipl. Phys. master's degree and Dr. sc. nat. doctorate in physics from Swiss Federal Institute of Technology (ETH), Zurich

Professional experience

1987 to 2002: IBM Research Laboratory, Rüschlikon; 2002: IBM Watson Research Center, Yorktown Heights, NY; 2003 to 2004: research manager, Photonics Networks, IBM Research Laboratory, Rüschlikon; 2004 to 2008: research functional manager, Science and Technology, IBM Almaden Research Center, San José, CA; 2008 to 2009: director of tape storage solutions, IBM, Tucson, AZ; since September 2009: CEO of Empa (the Swiss Materials Science & Technology Laboratory) and professor of photonics at the Swiss Federal Institutes of Technology (ETH and EPF), Zurich and Lausanne

Operational management functions

At the reporting date of December 31, 2015, none of the members of the Board of Directors had operational management responsibilities in the COMET Group. In the three years immediately preceding the year under review, none of the current Board members was a member of the Executive Committee of the COMET Group.

Related party transactions

Hans Leonz Notter is a partner at Notter Mégevand & Partner, a law firm in Berne which provides legal services, including legal advice, to the COMET Group. The other Board members had no material business relationships with the COMET Group.

Activities and interests outside the Group

Section 27 of the Bylaws, which have been revised for compliance with the OAEC and approved by the Shareholder Meeting, specifies the allowable number of external positions on top management or supervisory bodies that may be held by members of the Board of Directors, as follows:

  • Members of the Board of Directors may each not hold more than five external positions on top management or supervisory bodies of listed (i.e., exchange-traded) companies and not more than seven such external positions in non-listed companies.
  • Members of the Board of Directors may each not hold more than ten such positions in associations, non-profit foundations, family foundations and employee pension funds.
  • Positions in companies controlled by COMET Holding AG, or positions controlled by COMET Holding AG, are not subject to restriction.

At December 31, 2015 the members of the Board of Directors had the following positions on top management or supervisory bodies of significant Swiss and foreign private sector and public sector companies, institutions and foundations:

Hans Hess

Member of the board, Burckhardt Compression Holding AG, Winterthur; chairman of the board, Reichle & De-Massari Holding AG, Wetzikon; member of the board, Kaba Holding AG, Rümlang; president, Swissmem (the trade association of the Swiss mechanical and electrical engineering industries); vice president, economiesuisse (the Swiss business federation)

Hans Leonz Notter

Member of the board, SIGERANCE AG, Köniz; chairman of the board, Fondation Leschot, Berne; member of the board, Fondation Theodora; chairman of the board, Paserco Holding AG, Torny

Lucas A. Grolimund

Member of the board, Micronas Semiconductor Holding AG, Zurich

Rolf Huber

Member of the board, Hunziker AG Festwirtschaften, Willisau 

Gian-Luca Bona

Member of the board, Bobst Group SA, Mexico; chairman of the board, Technopark Zürich Foundation; chairman, Swiss Technopark Allianz; chairman, glaTec technology center, Dübendorf; expert for knowledge and technology transfer, Commission for Technology and Innovation (KTI); member of the advisory board, Swiss Cleantech Initiative; member of the board, Zurich Innovation Park foundation; member of the board, Bundesanstalt für Materialien (BAM, German Federal Institute for Materials Research and Testing), Berlin; member, International Advisory Board, National Institute for Material Science (NIMS), Tsukuba, Japan

Board elections and terms

Under the Bylaws of COMET Holding AG, its Board of Directors must have at least three members. The Board members are elected by the Annual Shareholder Meeting for a one-year term. They are individually elected when standing for election or re-election. The Shareholder Meeting also elects one member of the Board of Directors as the Chairman of the Board, and elects the members of the Nomination & Compensation Committee.

The terms of office end at the conclusion of the next Annual Shareholder Meeting. Re-election for consecutive terms is permitted. If elections are held during a term to replace or add Board members, the newly elected members serve for the remainder of the current term.

The maximum age for membership on the Board is 70 years. Every Board member must retire from the Board on the day of the Annual Shareholder Meeting held in the year in which he or she reaches 70 years of age.

The Bylaws are in accordance with the legal requirements of the OAEC.

Internal organizational structure

Except for the election of the Board Chairman and the members of the Compensation Committee by the Shareholder Meeting, the Board of Directors constitutes itself at its first meeting after its election or re-election by the Shareholder Meeting. The Board appoints its Vice Chairman, the members of the other Board committees and the Board Secretary. The Secretary need not be a member of the Board. The Board meets at the invitation of the meeting's chairman as often as business requires, or when requested by a Board member in writing for a stated purpose. The Board has a quorum when the majority of members are present. The Board passes its resolutions and performs its elections by an absolute majority of votes cast. In the event of an equality of votes, the chairman of the meeting has the casting vote. Resolutions on a motion may alternatively be reached in writing if no Board member objects to this method. Minutes must be kept of the deliberations and resolutions and be signed by the meeting chairman and the Board Secretary. The minutes are submitted to the Board for approval at its next meeting. The Bylaws are in accordance with the legal requirements of the OAEC.

Functioning of the full Board of Directors

The Board of Directors as a rule convenes for a regular meeting every two months. A total of seven regular meetings of the full Board were held in the year under review. Depending on the business at hand, the Board meetings are half a day or a full day in length.

The Board of Directors is regularly kept informed of the course of business by the CEO and CFO at its meetings and is also briefed on an ad hoc basis as needed. Other members of the Executive Committee, other management staff and specialists of the COMET Group regularly attend Board meetings to report on particular projects in their area of responsibility. As well, external advisors are consulted as required to deal with specific matters. In addition, the Board receives monthly written reports on current business performance and the financial planning variances. Additional meetings or telephone conferences are held as needed. Besides several telephone conferences of the full Board, there were also meetings of the Board committees, which are normally about half a day in length.

Board committees

In fiscal year 2015 the Board committees had the following composition:

   
Committee Members
Nomination & Compensation Committee (NCC) Rolf Huber (Committee chairman)
  Hans Leonz Notter
Audit Committee (AC) Lucas A. Grolimund (Committee chairman)
  Hans Hess
Technology Committee (TC) Gian-Luca Bona (Committee chairman)
  Rolf Huber

The committees' principal function is to prepare decision support for the full Board in special subject areas. At the regular meetings or as required, the full Board is kept informed of the activities of the individual committees. The overall responsibility for the tasks assigned to the committees remains with the full Board, which decides on all agenda items.

Every committee normally consists of at least two members of the Board. The members of the Nomination & Compensation Committee (NCC) are elected anew every year by the Annual Shareholder Meeting. The members of the other committees are elected by the Board from among the Board members for a term of one year. Every committee normally meets at least once per year or as often as business requires. The reports to the full Board are made orally or in writing as required.

Nomination & Compensation Committee

The Nomination & Compensation Committee is made up of two members of the Board, who are elected to the Committee annually by the Annual Shareholder Meeting. In the year under review these members were Rolf Huber (chairman) and Hans Leonz Notter.

The term of office is one year. Re-election for consecutive terms is permitted. The NCC prepares all agenda items related to the nomination and compensation of Board members and Executive Committee members. The NCC itself does not make decisions, but prepares proposals for the approval of the full Board of Directors. The Committee has the following responsibilities in particular:

  • Attend to the compensation policy for the remuneration of the Board of Directors and Executive Committee and to the compensation structure of the COMET Group
  • Produce the proposed compensation report and support the Board of Directors in preparing resolutions for the Annual Shareholder Meeting for the approval of compensation
  • Develop proposals for guidelines for the compensation of the Board of Directors and Executive Committee
  • Review stock ownership plans and recommend adjustments as appropriate
  • Propose new Board members and the Chief Executive Officer for appointment
  • Provide support to the CEO in evaluating candidates for the Executive Committee

The Company's organizational regulations and the committee charter of the NCC may assign additional responsibilities to the Committee.

The Nomination & Compensation Committee convenes for at least two regular meetings per year. The NCC may call additional meetings at its discretion. In the year under review the Committee held two meetings, both of which were attended by both members of the Committee.

Both of the Committee's meetings in the year were partly or fully attended, in an advisory role, by the CEO and the Chief Human Resources Officer.

In connection with the search for new Board members, the whole Board also participated in various ad-hoc meetings.

The Committee may invite other Board members, Executive Committee members and specialists to its meetings as required.

Audit Committee

The Audit Committee supports the full Board in exercising oversight of accounting and financial reporting and in monitoring compliance with legal requirements. The Committee has the following responsibilities in particular:

  • Evaluate the structure and form of the Group's accounting system
  • Gauge the effectiveness of the independent auditors and the internal controls
  • Evaluate the coordination of external and internal auditing, and review the performance and compensation of the external independent auditors
  • Evaluate the effectiveness of risk management
  • Review the rolling multi-year plan, the quarterly rolling forecast and the accuracy of the latter
  • Review the financial reporting to shareholders and the public
  • Issue directions to internal audit and, as may be required on a case-by-case basis by the resulting findings, give directions to the Executive Committee

During the fiscal year, two meetings were held by the Audit Committee. They were attended by the external auditors, internal audit, the CEO and the Chief Financial Officer (CFO). The Committee may invite other Board members, Executive Committee members and specialists to its meetings as required.

Technology Committee

The Technology Committee provides support to the full Board in matters of technology. The Committee has the following responsibilities in particular:

  • Monitor international developments in technology and evaluate the emerging trends for their relevance to the COMET Group
  • Assess the Group's internal research and development activities
  • Ensure the Group holds at least one technology day or equivalent event per year

The Committee meets as often as business requires. During the year under review the Technology Committee held two meetings. In the year, the appraisal of technology sector developments, as well as the development measures taken by the Group, were regularly discussed with the segment heads in the course of the Board's scheduled meetings. Additionally, a group-wide Science Day was held under the leadership of Gian-Luca Bona.

Division of authority

The Board of Directors is responsible for the overall direction and management of the Group and for the supervision of its most senior operational management personnel. The non-delegable and inalienable duties of the Board of Directors are established by section 716a of the Swiss Code of Obligations. The Board's specific responsibilities and scope of authority are set out in the Company's organizational regulations (its Management Organization Manual). In particular, the Board of Directors has the authority to:

  • Determine the Group's strategic direction and financial targets and allocate the resources required to achieve them
  • Establish the Group's objectives, business policy and strategy, and organizational structure
  • Approve the rolling short- and medium-term financial plans
  • Approve the acquisition and disposal of subsidiaries and of equity interests in other companies, and approve collaborations with other firms
  • Approve the purchase and sale of real estate
  • Appoint and withdraw members of the Group's Executive Committee and the presidents of the subsidiaries and exercise oversight and control of their activities

The Board of Directors has delegated all operational management of the Group to the CEO and the Executive Committee, except as otherwise required by law or the Company's Bylaws. The CEO and Executive Committee have the necessary powers to execute the business strategy within the framework set by the Board of Directors. In particular, the CEO has the authority to:

  • Manage the COMET Group, implement the Board's strategic directions and decisions, and ensure timely and appropriate reporting to the Board
  • Develop business targets within the general objectives established by the Board and present proposals for the rolling forecasts and for the strategic multi-year planning
  • Request items of business to be placed on the agenda of Board meetings, prepare such business for transaction by the Board, and ensure the implementation of the Board's decisions
  • Implement an internal control and management information system based on the specifications of the Board
  • Regularly review the business risks, and establish a Board-approved risk management system for this purpose
  • Regularly review the degree of achievement of the financial targets and strategic goals, as well as the liquidity of the subsidiaries
  • The members of the Executive Committee and presidents of the subsidiaries report to the CEO

Monitoring and control with respect to the Executive Committee

The Chairman of the Board may attend the meetings of the Executive Committee and receives the minutes of all its meetings. The Board also receives regular reports on the course of business from the Executive Committee at Board meetings. In the case of extraordinary events, the Executive Committee informs the Board immediately. The CEO and CFO attend all regular meetings of the Board. At least one to two times per year, at Board meetings, the other members of the Executive Committee also report on their business area to the Board.

Management information system

The monthly financial reporting by the Executive Committee on the current course of business and the notable transactions gives the full Board of Directors the information needed to properly discharge its responsibilities. The standardized internal reporting of the COMET Group consists of the IFRS-based consolidated balance sheet, statement of income and cash flow statement, as well as detailed management reporting. Complementing the monthly consolidated financial statements and a comprehensive range of financial ratios, the management reporting presents and comments upon additional information such as new orders and order backlog, staffing levels and accounts past due, provided in table and chart form. This data is aggregated by segment and for the Group and compared to the prior year and the rolling forecast. The resulting insights and actions are discussed monthly by the Executive Committee. All monthly financial statements are submitted to the Board of Directors, which discusses them at its meetings.

As a longer-term control tool, a rolling multi-year plan is prepared annually for the subsequent three years. In addition, every quarter, management generates a rolling forecast for the following five quarters. These forward-looking control tools, which are accompanied by detailed commentary and documented with charts, enable the Board to continually evaluate the financial effectiveness of the adopted business strategy and then to take action accordingly.

Internal audit

Since 2006 the internal audit function is performed on a consulting basis by Robert Kruijswijk, who is based in Elgg, Switzerland. His compensation is determined by the amount of work performed. In the year under review, Robert Kruijswijk carried out various special audits at a number of locations. The reporting is based on the audit priorities approved by the Board for the next three years. The nature of the coordination and cooperation between the internal audit function and the external audit firm, complete with the identification of the respective responsibilities, has been specified in writing and approved by the Board.

Key audit priorities in the fiscal year included the administrative processes of the human resources department in Switzerland. As well, the entire order fulfilment process of the three business segments was audited, with a particular focus on contract management at PCT and XET in Switzerland and at IXS in Hamburg. The key financial and business processes at the Copenhagen site and the ebeam processes in Flamatt were also audited.

The internal auditor reports directly to the Audit Committee of the Board of Directors, at least twice per year and more frequently as required. On completion of each special audit, he prepares an audit report. To initiate the implementation of the planned measures, the audit report is then discussed with the Executive Committee and the national lead personnel responsible (typically the local company presidents responsible for the relevant business) and/or the persons directly affected by the audit. The internal auditor then prepares a final audit report for the Board of Directors, with a corresponding action plan.

Risk management system

Risk management includes the annual evaluation of strategy by the Board and the assessment by the Executive Committee of insurance cover, of the general business risks and of the major balance sheet items. The approach to risk management is described in a risk strategy approved by the Board and is specified in a written risk management procedure for implementation by the Executive Committee. Under the direction of the CFO, the significant risks in the individual business areas and departments are identified in quarterly working group sessions, systematically described and categorized in a risk matrix, and, if required, assigned a new risk rating based on the probability of occurrence and the potential severity of loss. For the risks classified as important, action plans are formulated to minimize the probability and/or severity of loss. The Executive Committee of the COMET Group normally meets twice per year to review the effectiveness of the actions taken and to regularly update the description of existing risks in the risk portfolio so as to reflect new information and formally recognize new risks. Newly identified risks are added to the portfolio as required and action plans are formulated to manage them. In the year under review, the Executive Committee held two meetings on risk management, which were also attended by the head of Corporate Quality, Risk and Process Management. Through separate reports, the Audit Committee at each of its meetings is kept advised of the current assessment of the Group's risks.

Internal control system

In the fiscal year, where required, the COMET Group further refined, expanded, trained or documented the existing system of internal control (the “internal control system”). The internal control system is in use at all levels of the enterprise and in all sizeable locations within and outside Switzerland. The introduction of an internal control system at PCT Engineered Systems LLC, the company newly acquired in 2015, is planned for 2016. The significant risks and controls were adjusted to fit the objectives and quality requirements established by the Board of Directors. The staff members responsible for the internal control system have been designated Group-wide, the employees involved have been trained and the control functions clearly assigned. The controls have been integrated in the day-to-day operations and are periodically tested for effectiveness, verifiability of implementation, and efficiency. This approach ensures both the timely detection of risks and the ability to swiftly take the necessary countermeasures thanks to the internal controls. The introduction of a uniform, systematic process for risk detection and assessment has enhanced the reliability and completeness of bookkeeping and the timeliness and dependability of financial reporting. In the year-end audit, the independent auditor audits the internal control system of the COMET Group in terms of risks in connection with financial reporting and provides a comprehensive report on the findings to the Board's Audit Committee.