Annual Report 2012 - Investor Relations

Corporate Governance393.2 Other activities and interestsWith the exception of the positions mentioned under 3.1, themembers of the Board of Directors are not engaged in any activitiesin executive management and supervisory bodies or permanentmanagement and consultancy functions for significant interestgroups.3.3 Elections and term of officeMembers of the Board of Directors are elected by the shareholdersat the General Meeting of Shareholders for a term of one year,one year being the period from one General Meeting of Shareholdersto the close of the next. If elections are held to elect replacementsfor board members mid-term, those so elected completethe term of office of the members they are replacing. Electionstake place on an individual basis. Re-election is permissible. Thereis no limit to the number of terms of office that any one membermay serve. However, upon reaching the age of 70 Board ofDirectors members must lay down their office at the next GeneralMeeting of Shareholders. The shareholders have the right to voteBoard of Directors members out of office at the General Meetingof Shareholders. The number of Board of Directors members islimited to between five and seven. The average time the presentBoard of Directors members have served is approximately fourand a half years, their average age being ca. 59.3.4 Internal organisation3.4.1 Allocation of responsibilities within theBoard of DirectorsThe Board of Directors has the ultimate authority to make decisionsexcept where this is reserved to shareholders by operationof the law or the Articles of Association. The Board of Directors isresponsible for the overall direction, supervision and control overexecutive management. It enacts guidelines for the company’sbusiness policy and informs itself regularly about the company’sperformance and business situation. The main responsibilities ofthe Board of Directors are:• Defining the Group’s organisational and strategic direction• Ultimate supervision of the Group’s business operations andmonitoring of its performance• Approval of significant acquisitions and disposals• Establishing systems and procedures for the Group’s accountingand financial control and planning• Establishing the Group’s business policy, in particular its investmentand financial policy• Approval of budgets including investments and financial plans• Drafting the Annual Report, preparation and conducting of theGeneral Meeting of Shareholders, and the implementation ofthe resolutions adopted by it• Establishing the key principles of corporate governance andguidelines for the Group’s information and communicationpolicy• Appointment and dismissal of persons charged with the managementand representation of the Group and designating authorisedsignatories• Establishing the organisation and monitoring of the internal controlsystem• Informing the competent authorities in the event of excessliabilities over assets3.4.2 Board of Director committeesThe Board of Directors is assisted by two committees.Audit CommitteeThe Audit Committee assists the Board of Directors in performingits duties of ultimate financial supervision of the company andin managing its interactions with the external auditors. The maintasks of the Audit Committee are:• Auditing the consolidated financial statements and the financialstatements of Cham Paper Group Holding AG in tandem withthe Executive Management Board and the external auditors• Evaluating the appropriateness and effectiveness of the accountingand reporting principles used for consolidation• Assessing the presence of an effective internal control systemincluding risk management• Evaluating and selecting external auditors to be nominated forelection by the General Meeting of Shareholders• Assessing the performance of the external auditors and verifyingtheir independence• Reviewing the fees of the external auditors and the compatibilityof their auditing activities with any other consulting activitiesin which they may be engaged• Reviewing information concerning corporate governance forcompliance with the guidelines of the SIX Swiss Exchange• Deciding whether the Board of Directors can be recommendedto submit the consolidated financial statements and the financialstatements of Cham Paper Group Holding AG to the GeneralMeeting of Shareholders for adoption by it.The Audit Committee has no decision-making authority, but itrather assesses the aforementioned matters and prepares theindividual and consolidated financial statements for approval bythe Board of Directors. Meetings are attended by the Delegate ofthe Board, the Head of Finance & Controlling and as necessary,by representatives of the external auditors. The Audit Committeemeets at least once every six months, more frequently as mayprove necessary. In FY 2012 three meetings were held, each lastingapproximately half a day. Representatives of the external auditorsattended all three meetings.The Audit Committee consists of Dr. Felix Thöni (Chairman),Philipp Buhofer, Hans Schaller and Peter J. Schmid. Because oftheir professional background, the members of the Audit Committeehave sufficient experience and competency in accounting andfinancial management to be able to perform their responsibilities.