Corporate Governance

The members of the Board of Directors and the Executive Committee of the Galenica Group are qualified and experienced people. Most of them have known and accompanied Galenica for many years and are committed to the successful further development of the company with their professional competence.

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The Board of Directors of Galenica is responsible for the overall management and ultimate supervision of the Group. It determines the strategic goals, the general ways and means to achieve them while harmonising strategy, risks, and financial resources, and issues instructions and oversees the managers responsible for conducting the company’s businesses. The Board of Directors pursues the aim of increasing enterprise value on a sustainable basis and ensures a balanced relationship between management and control (corporate governance). It decides on the Group’s medium-term planning, budget, and annual objectives. The values and essential framework of the company’s activities are also determined by the Board of Directors. For the Board of Directors, sustainability is of central importance. With regard to personnel, the Board of Directors is responsible for the selection and deselection of the members of the committees, the CEO, and the members of the Corporate Executive Committee, as well as the organisation of the remuneration system.

The specific duties of the Board of Directors of Galenica are based on the Code of Obligations (in particular Article 716a CO), the company’s Articles of Association, and its Organisational Regulations. Pursuant to the Articles of Association, the Board of Directors consists of five to nine members.

In selecting the members of the Board of Directors, care is taken to ensure that the relevant competences for Galenica’s activities are represented and that the necessary specialised expertise is available. The Board of Directors evaluates current and prospective members of the Board according to a competence matrix to ensure that an appropriate mix of relevant skills and experience is represented. Particular attention is paid to diversity and complementarity.

In 2020, an assessment was carried out with external support (Thomas Hammer, Board Consulting), and in 2021, the Board of Directors and its committees carried out a self-assessment. The Chair of the Board of Directors initiates the self-assessment of the Board of Directors by distributing an evaluation questionnaire and by having an individual discussion with each member. The self-evaluation will again be followed by an external assessment in 2022. The Board of Directors is a well-constituted team of good size, with a range of experience, complementary expertise, and a good combination of different personalities. Expert know-how in increasingly strategically relevant areas will be gradually expanded.

Competences


Bosshardt Daniela

Bruderer Pascale

Burnier Michel

Jungo Bertrand

Neuhaus Markus

Walde Andreas

Industry Experience

Pharmacy

Healthcare

Healthcare

Retail



Digitalisation


(x)


(x)



Regulations/Politics


x



x


Leadership/Big Corp.




x

x


Finance/M&A

x




x

x

Legal/Compliance





x

x

HR/Remuneration

x


x

x

x

x

Sustainability

x

x



x

x

An (x) in brackets refers to substantive experience that was gained through intensive engagement in the corresponding area, but without formally holding a position of responsibility or having completed an educational programme in the respective field.

The Articles of Association of Galenica restrict the ability of its directors to act in the highest management and administrative bodies of other legal entities outside the Group (Article 17 (3) of the Articles of Association). This includes, in particular, limiting such outside activity to five mandates in listed legal entities and seven mandates in profit-oriented, non-listed legal entities.

The Board of Directors forms the following committees from its members:
Governance, Nomination and Sustainability Committee

  • Remuneration Committee
  • Audit and Risk Committee
  • Strategy Committee (until AGM 2021)

In order to support the Board of Directors on ESG topics, the Governance and Nomination Committee has been enlarged to encompass sustainability, and in January 2021, it became the Governance, Nomination and Sustainability Committee.

The Strategy Committee, which had been initiated in 2018 to support the Board of Directors, was terminated as of AGM 2021 and its topics integrated again in the full Board.

The committees prepare the business of the Board of Directors in the areas of activity assigned to them and submit recommendations to the entire Board of Directors. They meet as often as business requires and report to the Board of Directors on their activities and results. They draw up their own agendas and keep minutes.

The Governance, Nomination and Sustainability Committee comprises four members. This committee supports the Board of Directors in the ultimate direction and supervision of the Company and the Group. It supports the Board of Directors in determining the appropriate size, function, and needs of the Board, as well as the identification of individuals qualified to become or be re-elected as Board members. It also evaluates the appointment of and changes to the members of the Executive Committee and is kept informed about the succession planning for the Senior Management levels.

The Committee’s responsibilities as they relate to sustainability involve discussing all ESG-related matters, including climate change, integrating sustainability into the strategy, monitoring progress on sustainability goals, and adherence to standards.

The Remuneration Committee is made up of three members, the majority of whom must be independent. The Remuneration Committee carries out the following duties in particular:

  • Proposes a remuneration strategy and objectives for the Group and the members of the Corporate Executive Committee to the Board of Directors;
  • Proposes the salaries and remuneration for the members of the Board of Directors, the Chairwoman, the CEO, and the Corporate Executive Committee as a whole to the Board of Directors;
  • Approves the remuneration for the members of the Corporate Executive Committee (excluding the CEO) according to the proposal of the CEO and in agreement with the Chairwoman of the Board of Directors.

The regulations in the Articles of Association governing remuneration as well as the activities and focuses of the Remuneration Committee in the year under review are detailed in the Remuneration report.

The Audit and Risk Committee comprises three members and supports the Board of Directors in fulfilling its duties with regard to accounting, financial reporting, risk management, and compliance, as well as internal and external audits. The Audit and Risk Committee carries out the following duties in particular:

  • Audits reports by the Corporate Executive Committee on the company’s compliance and risk management process;
  • Monitors measures taken by the Corporate Executive Committee for compliance with internal and external regulations;
  • Evaluates the effectiveness of the external auditor and approves its fees;
  • Evaluates the internal audit programme, accepts reports from Internal Audit and checks whether the Corporate Executive Committee has used appropriate measures to implement Internal Audit’s recommendations;
  • Submits recommendations to the Board of Directors on the Group’s capital structure, financing of investments and acquisitions, and setting of long-term objectives.

Risk management

Galenica has a risk management process in place which enables the Board of Directors, the Corporate Executive Committee, and the relevant management of Group companies to identify and assess potential risks in a timely manner and take the preventive measures necessary. The goal of this process is to identify and assess significant risks at all management levels and to manage them while making conscious use of the opportunities the process provides.

As part of Group-wide Galenica Risk Management (GRM), the companies in the Group conduct a risk assessment at least twice a year. This standardised process is based on a risk grid in which the most important strategic and operational risks and their possible effects – particularly from a financial and reputational perspective – are identified in line with pre-defined criteria and then evaluated in accordance with the probability of their occurrence and their effect. These risks are entered into a risk matrix for each Service Unit and, depending on the importance, also incorporated into the Group risk matrix.

The Board of Directors of Galenica receives an overview of the most important risks from the Corporate Executive Committee when circumstances require it, but at least twice a year. The Board evaluates the overview, adding information as needed, and where required takes decisions on any preventive measures necessary, which will then be implemented Group-wide as part of the risk management process.

Galenica defines risk as the possibility that an event or an action will lead to immediate financial loss or other negative consequences.

Internal control system

As part of its risk management system, Galenica operates an internal control system (ICS) to provide reliable internal and external financial reporting and to prevent false information and errors about business transactions. The ICS provides the necessary processes and controls to ensure that risks relating to the quality of the company’s financial reporting can be detected and managed in a timely manner. A thorough review of the existence of the processes and controls of the Galenica ICS is carried out annually by the external auditors at the time of the interim audit. The results of these reviews are reported to the Audit and Risk Committee. Appropriate measures are taken by management to continually improve the company’s processes with regard to the process areas of purchasing, procurement, investments, sales, HR, general financial management and reporting, as well as IT controls.

Internal Audit

Internal Audit carries out audits of operational and strategic risk management and the ICS in accordance with the audit plan determined by the Audit Committee. It carries out reviews, analyses and interviews across the Group and helps the Service Units to meet their targets by ensuring an independent assessment of the effectiveness of the internal control processes. Internal Audit regularly produces reports on its audits and reports directly to the Audit and Risk Committee in writing. The activities of Internal Audit are conducted through contracts issued to external service providers.

Corporate Executive Committee

The instructions and resolutions of the Board of Directors are implemented for each of the Group’s Service Units by the Corporate Executive Committee and the Enlarged Corporate Executive Committee under the leadership of the CEO. The Board sets appropriate objectives for the CEO and those members of the Corporate Executive Committee allocated to the relevant Service Unit and approves the budget. Compliance with these targets is monitored based on monthly reports to the Board, which include key figures and reporting on important events and developments, and on the planning cycle. In the first quarter, the results for the previous year are compared with the planning for that year. In the first quarter of the current financial year, the annual financial statements for the previous year are prepared, and in the second quarter, an initial forecast “Last Estimate 1” for the current financial year is drawn up. The third quarter sees the preparation of the half-year financial statements, and the fourth quarter a second forecast “Last Estimate 2” together with the budget for the following year and medium-term planning for the subsequent two years.

The Articles of Association of Galenica restrict the ability of the members of the Corporate Executive Committee to act in the highest management and administrative bodies of other companies, limiting such outside activity to one mandate in listed companies and three mandates in total, subject to prior approval by the Board of Directors (Article 20 (3) of the Articles of Association).

Information and monitoring tools

The Board of Directors monitors the Corporate Executive Committee and supervises its working practices. The Galenica Group has a comprehensive electronic information management system. The Board of Directors receives a written report on a quarterly basis and is informed on a monthly basis about the Group’s financial and operating performance. In addition, operating performance, opportunities, and risks are discussed in depth at meetings attended by members of the Corporate Executive Committee.

Management contracts

No management contracts exist as specified under point 4.4 of the Annexe to the SIX Swiss Exchange Directive Corporate Governance.

Contact

Galenica Ltd.

Investors
Untermattweg 8
3027 Bern

Tel. +41 58 852 85 29
Fax +41 58 852 85 35