Board of Directors
The Board of Directors is the company’s senior management body and comprises at least four members. The Board of Directors met four times in 2010.
Election and term
Members of the Board of Directors are (re-)elected by the Shareholders’ General Meeting for a three-year term. To guarantee continuity within the Board of Directors, elections are (generally) staggered, with some members being re-elected and others newly recruited. If no shareholder requests separate voting, the members of the Board of Directors are elected in a single ballot. There are no restrictions on re-election. Members of the Board of Directors must be shareholders. Should non-shareholders be elected, they may only take up office after becoming shareholders. The Board of Directors elects one of its members to become Chairman and also designates someone to take the minutes, who does not necessarily have to be a member of the Board of Directors.
Powers
The powers of the Board of Directors are set out in the Swiss Code of Obligations law as well as in Phoenix Mecano AG’s articles of incorporation, which state that the Board of Directors is entitled to transfer the management or individual branches thereof and the representation of the company to one or more of its members or to third parties. To this end it may set up committees, appoint, monitor or recall delegates or appoint a management comprising one or more of its own members or external persons. The Board of Directors determines the powers and obligations of committees, delegates, management and executives with a power of attorney.
The Board of Directors is authorised to take decisions provided that a majority of its members is present. Decisions are taken by a majority of votes cast by those present. In the event of a tie, the Chairman has the casting vote.
By law and pursuant to the company’s articles of incorporation, the Board of Directors has the following main duties and powers:
- Preparation of the proceedings of the Shareholders’General Meeting, especially the annual report, financial statements and proposals on the appropriation of earnings.
- Determination of corporate goals and the principles under lying corporate policy and strategy.
- Determination of the company’s policy on risks.
- Decision-making regarding the establishment or cessation of major divisions of the company and authorisation of the acquisition or disposal of shareholdings, plus authorisation of any changes to the structure of the Group.
- Decision-making on the budget and medium-term planning (product and market strategy, financial and investment guidelines).
- Allocation of signatory powers to members of the Board of Directors and determination of the principles governing signatures below that level.
- Determination of the principles of reporting to the Board of Directors, authorisation of the principles governing the company’s fi nances and accounts and also internal and external audits
Further activities and interest
In keeping with the guidelines on corporate governance, the following activities and interests are declared:
Mr Ulrich Hocker, Chairman of the Board of Directors, fulfils the following additional mandates:
Membership of management or supervisory boards
- Deutsche Telecom AG, Bonn, Germany (Member of the Supervisory Board)
- E.ON AG, Düsseldorf, Germany (Member of the Supervisory Board)
- Feri Finance AG, Bad Homburg, Germany (Deputy Chairman of the Supervisory Board)
- Gartmore SICAV, Luxembourg (Member of the Board of Directors)
- Gildemeister AG, Bielefeld, Germany (Member of the Supervisory Board)
Permanent management and advisory posts
- Deutsche Schutzvereinigung für Wertpapierbesitz e. V. (DSW), Dusseldorf, Germany
Official and political posts
- Member of the Stock Exchange Expert Committee of the Federal Ministry of Finance, Germany
- Member of the Government Commission of the German Corporate Governance Code
Mr Beat Siegrist, Member of the Board of Directors, fulfils the following additional mandate:
Membership of management or supervisory boards
- Essilor International, Charenton-le-Pont, France (Member of the Executive Committee)
- INFICON Holding AG, Bad Ragaz, Switzerland (Member of the Board of Directors)
- Schweiter Technologies, Horgen, Switzerland (Member of the Board of Directors)
No other members of the Board of Directors have any relevant activities or interests to report.
Cross-linkage
There is no cross-linkage; in other words no member of the Phoenix Mecano Board of Directors serves on the Supervisory Board of a listed company of a fellow Director.
Internal organisation
The Board of Directors is deliberately kept small and usually performs its duties as a body. The Audit Committee first set up in 2003 is primarily responsible for monitoring external audits. In that task it is supported by the Internal Auditing department. The Audit Committee is chaired by Dr Florian Ernst in his capacity as a non-executive member of the Board of Directors. Dr Ernst is a certified auditor and has the necessary knowledge and experience of finance and accounting. Another member of the Audit Committee is the Chairman of the Board of Directors, Ulrich Hocker. The CEO and CFO also attend Audit Committee meetings. The Committee held two three-hour meetings in 2010.
The Audit Committee works in an advisory capacity and prepares draft resolutions and recommendations for the attention of all members of the Board of Directors.
Tools for monitoring and informing the management
The Board of Directors may use several tools to ensure that it performs its duties vis-à-vis the management to the fullest extent. For instance the company has a modern management information system which includes all Phoenix Mecano Group companies and enables it to gain a quick and reliable picture of the income and assets of the Group, divisions or individual companies at any time. Reporting takes place monthly. Regular meetings with members of the management complement the information possessed by members of the Board of Directors and their own basis for decision-making.
In 2002, a Group-wide risk management system and dedicated, full-time Internal Auditing department were set up. The latter is accountable to the Board of Directors and reports directly to it. Both institutions proved invaluable and were duly developed further. A quality assessment conducted by an external auditor (KPMG AG) in late 2006 confirmed that the Phoenix Mecano Group’s Internal Auditing department complied with international standards. A quality assessment is carried out every five years. Key audit issues in 2010 were the internal control system as well as accounts receivable and inventory management and construction investments.