Corporate governance

Corporate governance is an essential part of the LLB Group’s corporate policy. It ensures responsibilities, control and transparency. The fundamental basis for the Group’s corporate governance are the SIX Swiss Exchange “Directive Corporate Governance” (DCG), the Liechtenstein law concerning the control and supervision of public companies (ÖUSG), the Law on the Liechtensteinische Landesbank (LLBG) as well as the statutes and rules of procedure.

Basis

Our responsibly minded management, which is focused on long-term added value, is characterized by efficient cooperation between the Group Executive Board and the Board of Directors, by transparent accounting and reporting as well as by good shareholder relations.

The principles and directives defining corporate governance are laid down in two laws: “the law concerning the control and supervision of public companies” (ÖUSG) of 19 November 2009 and the Law on the Liechtensteinische Landesbank (LLBG) of 21 October 1992. In addition, they are laid down in the statutes and rules of procedure of LLB, which are regularly reviewed and, if necessary, adapted. These documents are based on the directives and recommendations of the “Swiss Code of Best Practice for Corporate Governance” issued by the Swiss Business Federation (economiesuisse).

On 22 November 2011, the Liechtenstein Government as the representative of the principal shareholder, the Principality of Liechtenstein, adopted – with reference to the ÖUSG Law – what is known as a participation strategy for Liechtensteinische Landesbank AG. This strategy also provides minority shareholders with certainty in planning by defining how the Principality intends to use its majority equity stake in the medium and long term.

The Government commits itself to the stock exchange listing of LLB and a majority participation of at least 51 percent. The Government represents the shareholder interests of the Principality at the General Meeting of Shareholders pursuant to the rights afforded to it by stock corporation law. The Government observes corporate autonomy as well as the rights and obligations resulting from the stock exchange listing. At the same time, the Government as a shareholder also respects the decision-making authority of the Board of Directors regarding corporate strategy and corporate policy. Having regard to Art. 16 of the ÖUSG Law, the participation strategy was adopted after consultation with LLB’s Board of Directors. Further information can be found at www.llb.li/participation-strategy.

The Board of Directors of the LLB Group has held the “Best Board Practice®” label of the Swiss Association for Quality and Management Systems (SQS) and the Liechtensteinische Gesellschaft für Qualitätssicherungs-Zertifikate (LQS; the Liechtenstein Association for Quality Assurance Certificates) since December 2010. The business activities and organization of the Board of Directors exhibit a high level of quality. In December 2013, both SQS and LQS reconfirmed their evaluation of the good quality and transparency of the Bank’s corporate governance. The Board of Directors was once again awarded the “Best Board Practice®” label for a further three years.

The following corporate governance report complies with the requirements of the “Directive Corporate Governance” (DCG), valid since 1 July 2002, by SIX Swiss Exchange as well as its updated commentary of 20 September 2007. If information required by the Directive is disclosed in the Notes to the financial statement, a corresponding reference is shown.

The Ordinance against Excessive Compensation by Listed Companies (OaEC) has been in force in Switzerland since 1 January 2014. It applies to Swiss public companies whose shares are listed on an exchange in Switzerland or abroad. Liechtensteinische Landesbank AG is accordingly not affected by the Ordinance. In the Regulatory Board Communiqué No. 2 / 2014 of 1 September 2014 concerning the Revision of the Directive on Information relating to Corporate Governance (RDCG), the Regulatory Board notes that all companies listed on SIX Swiss Exchange should, in principle, have to disclose the same information on corporate governance. This is to avoid that issuers that are required to make certain disclosures under the current Directive Corporate Governance (DCG) will no longer have to make them in the future because they are not subject to the scope of the OaEC. As a result, the DCG now contains in some areas special provisions for issuers subject to the OaEC and provisions for those that are not subject to the OaEC.

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