3 Board of Directors

3.1 Members

a) Name, nationality, education and professional career

(XLS:) Download

Name

Year of birth

Profession

Nationality

*

Chairman

**

Vice Chairman

Hans-Werner Gassner *

1958

Business consultant and certified public accountant

FL

Markus Foser **

1969

Business consultant

FL

Markus Büchel

1953

Human resources manager (retired)

FL

Patrizia Holenstein

1957

Lawyer

CH

Urs Leinhäuser

1959

Business economist

CH

Gabriela Nagel-Jungo

1969

Professor of financial Management

CH

Roland Oehri

1968

Fiduciary

FL

The General Meeting of Shareholders on 9 May 2014 elected Gabriela Nagel-Jungo and Urs Leinhäuser as new members of the Board of Directors for a term of office of three years. They replace Ingrid Hassler-Gerner and Peter Fanconi. Ingrid Hassler-Gerner stepped down from the Board of Directors as at 9 May 2014 because of term limits. Peter Fanconi stepped down from the Board as at 15 November 2013 because the Government of the Canton of Graubünden elected him as the Chairman of the Graubündner Kantonalbank.

Hans-Werner Gassner

Dr. Hans-Werner Gassner, Chairman of the Board of Directors (photo)

Education:

  • Licentiate in economics, University of St. Gallen (HSG), 1983
  • Swiss federal diploma in accountancy, 1988
  • Dr. oec., University of St. Gallen (HSG), 1989
  • Swiss Banking School, 1996

Professional career:

  • Accountant, Neutra Treuhand Group, 1984–1989
  • Head of Internal Audit, Liechtensteinische Landesbank, 1990–1998
  • Head of Finances, Liechtensteinische Landesbank, 1998–2000
  • Proprietor, Adcom Treuunternehmen reg., Balzers, since April 2000
  • Member of the Board and Member of Management of MAS Multi Asset Strategy Management Trust reg., Balzers, since 2005

Markus Foser

Markus Foser (photo)

Education:

  • Licentiate in economics, major in business IT, University of Zurich (UZH), 1996
  • Swiss federal diploma in financial analysis and asset management CEFA, 2000

Professional career:

  • Equity research and fund management, Liechtensteinische Landesbank, 1997–2002
  • Advisor to mainly institutional clients with derivative and structured products, Bank Vontobel (Liechtenstein) AG, Vaduz, 2002–2003
  • Head of Fund & Investment Services (Asset Management), swissfirst Bank (Liechtenstein) AG, Vaduz, 2004–2007
  • Member of the Executive Board, Banque Pasche (Liechtenstein) SA, Vaduz, responsible for Fund & Investment Services (Asset Management), 2008–2009
  • Proprietor, MAFOS Consult Anstalt, Vaduz, 2009–2013
  • First Advisory Trust reg., Strategic Projects & Business Development, since 2012

Markus Büchel

Markus Büchel (photo)

Education:

  • Apprenticeship as a mechanical draughtsman, 1969–1973
  • Commercial college Buchs, 1973–1974
  • Mechanical engineer (Dipl. Ing. FH), Abendtechnikum Vaduz, 1974–1978

Professional career:

  • Hilti AG, Schaan, (various technical functions), 1973–1981
  • ThyssenKrupp Presta AG, Eschen, development / engineering (various functions), 1981–1991
  • ThyssenKrupp Presta AG, Eschen, Head of Technical Services, 1991–1995
  • ThyssenKrupp Presta AG, Eschen, Head of Human Resources of the Presta Group, 1995–2013 (retirement)

Patrizia Holenstein

Dr. Patrizia Holenstein (photo)

Education:

  • Licentiate in law, University of Zurich (UZH), 1980
  • Dr. iur. University of Zurich (UZH), 1981
  • Admitted to the Zurich bar, 1985
  • LLM, London School of Economics, 1989

Professional career:

  • Lecturer at the University of Zurich (UZH), 1981–1984
  • Clerk, District Court of Zurich and Supreme Court of the Canton of Zurich, 1981–1985
  • Lawyer, Haymann & Beglinger, Zurich, 1985–1988
  • Lawyer, Clifford Chance London (Banking Department), London, 1989–1990
  • Holenstein Rechtsanwälte AG, Zurich, Founder and Managing Partner, since 1990

Urs Leinhäuser

Urs Leinhäuser (photo)

Education:

  • Business economist (Dipl. Betriebsökonom HWV), 1983
  • IMD Lausanne, SSE 1998

Professional career:

  • Tax inspector (legal entities), Schaffhausen Cantonal Tax Office, 1983–1986
  • Deputy Head of Tax Department, Refidar Moore Stephens, Zurich, 1986–1988
  • Group Controller and Managing Director Cerberus Denmark (1992) at Cerberus AG, Männedorf, 1988–1994
  • Head of Group Controlling and CFO of Piping Systems Division, Georg Fischer AG, Schaffhausen, 1995–1999
  • CFO and Member of Group Executive Board, Mövenpick Holding AG, Adliswil, 1999–2003
  • CFO & Head of Corporate Center and Member of Corporate Management, Rieter Holding AG, Winterthur, 2003–2011
  • CFO & Deputy CEO and Member of Corporate Management, Autoneum Holding AG, Winterthur, 2011–31 March 2014
  • Businessman, since 1 April 2014

Gabriela Nagel-Jungo

Prof. Dr. Gabriela Nagel-Jungo (photo)

Education:

  • Licentiate in economics, University of Zurich (UZH), 2001
  • Teaching diploma in business subjects, 2004
  • Dr. oec. publ., University of Zurich (UZH), 2007
  • Professorship of Financial Management, awarded by ZFH, 2011

Professional career:

  • Semester assistant at the Chair for Business Administration, Swiss Federal Institute of Technology (ETH) Zurich, 1998–1999
  • Head of Financial Accounting and Payroll, netto-netto AG, Wetzikon, 2002–2005
  • Assistant at the Institute for Accounting and Controlling (Prof. Dr. C. Meyer), University of Zurich (UZH), 1999–2007
  • Lecturer and project leader, Zurich University of Applied Sciences (ZHAW), since 2007
  • Head of the Centre for Accounting & Controlling, Zurich University of Applied Sciences (ZHAW), since 2010 

  • Deputy Head of the Department of Banking, Finance, Insurance, Zurich University of Applied Sciences (ZHAW), since 2011

Roland Oehri

Roland Oehri (photo)

Education:

  • Commercial apprenticeship, 1987
  • Federally qualified business economist FH, 1993
  • Liechtenstein trustee and fiduciary examinations, 1998

Professional career:

  • Investment advisor, Foreign Private Clients Department, VP Bank AG, Vaduz, 1993–1999
  • Head of Foreign Private Clients Department, VP Bank AG, Vaduz, 1999
  • Client advisor, Private Trust Banking, VP Bank AG, Vaduz, 2000
  • Client advisor and Head of Intermediaries Department, Bank Wegelin (Liechtenstein) AG, Vaduz, later also of swissfirst Bank (Liechtenstein) AG, Vaduz, 2000–2003
  • Vice President of LOPAG Louis Oehri & Partner Trust reg., Ruggell, 2004–2009
  • Partner and Managing Director, Sequoia Treuhand Trust reg., Ruggell, since 2006
  • Partner and Managing Director, Sequoia Capital Management AG, Ruggell, since 2007

b) Executive / non-executive members

All members of the Board of Directors of the Liechtensteinische Landesbank are non-executive members. Pursuant to Art. 22 of the Liechtenstein banking law in connection with Art. 10 of the Law on the Liechtensteinische Landesbank, various special bodies must be constituted for the direction, supervision and control of a bank, on the one hand, and for the Board of Management or Group Executive Board, on the other hand. No member of the Board of Directors is allowed to be a member of the Board of Management or Group Executive Board.

c) Independence

All members of the Board of Directors are independent within the context of the SIX Swiss Exchange “Directive Corporate Governance” (DCG) concerning corporate governance information. In 2014, as well as in the previous three business years, no member of the Board of Directors was a member of the Group Executive Board or the Board of Management of the Liechtensteinische Landesbank or a Group company. No member of the Board of Directors had significant business relationships with the Liechtensteinische Landesbank or with another Group company. In accordance with Art. 12 of the Liechtenstein law concerning the control and supervision of public companies, all contracts with members of the Board of Directors must be in writing and they must be approved by the Board of Directors. The same conditions apply as to contracts concluded with third parties.

3.2 Other activities and commitments

Hans-Werner Gassner is the Managing Director of the Liechtenstein Association of Independent Asset Managers.

Markus Foser is a Member of the Board of Directors of Ameliora Wealth Management AG.

Markus Büchel is a Member of the Board of Directors of Verwo AG.

Patrizia Holenstein is a Member of the Board of Directors of Argos Holding AG, State Street Global Advisor and EPiC Property Investment AG.

Urs Leinhäuser is a Member of the Board of Directors and Chairman of the Audit Committee of Burckhardt Compression Holding AG and Member of the Board of Directors of Ammann Group Holding AG.

Gabriela Nagel-Jungo is a Member of the Board of Directors of Ruetschi Technology AG.

Roland Oehri is a Member of the Board of Directors of RFinanz (Liechtenstein) AG.

Otherwise, the members of the Board of Directors are not involved in the management or supervisory boards of important Liechtenstein, Swiss or foreign private or public law corporations, establishments or foundations, nor do they exercise any permanent management or consultancy functions for important Liechtenstein, Swiss or foreign interest groups, nor do they perform official functions or hold political office.

3.3 The number of permitted activities

Liechtensteinische Landesbank AG is not subject to the Swiss ordinance against excessive compensation in listed public limited companies (OaEC). Liechtensteinische Landesbank AG has not issued any regulations on the number of permitted activities.

3.4 Election and term of office

3.4.1 Principles governing the election procedure

The Board of Directors of the Liechtensteinische Landesbank is – in accordance with the law and the company statutes – composed of five to seven members, who are elected individually by the General Meeting of Shareholders for a term of office of three years. Thereby, a year corresponds to the period from one General Meeting of Shareholders to the next. Members can be re-elected for a further two terms. After three terms of office, the Chairman of the Board of Directors can – in justified cases – be re-elected for an extraordinary term of office of at most two years.

The 12th Ordinary General Meeting of Shareholders on 7 May 2004 passed an amendment to the statutes that allowed for the staggered renewal of the Board of Directors in order to preclude a complete renewal of the Board. Furthermore, the “Regulation concerning the Group Nomination & Compensation Committee” of the LLB Group (see point No. 3.5.2 “Composition of all Board of Directors’ committees, their duties and individual competencies”) stipulates that the Board of Directors aims at continuity through the orderly renewal of the Board, succession planning as well as through the appropriate staggering of the terms of office (no complete renewal) pursuant to current corporate governance provisions.

The Chairman of the Board of Directors is elected by the General Meeting of Shareholders. The Vice Chairman is elected from among the members of the Board of Directors by its members. New members of the Board of Directors elected as substitutes shall be elected for a full term of office of three years. The General Meeting of Shareholders can dismiss members of the Board of Directors on important grounds. The age limit is 70 years for members of the Board of Directors. Decisions about exceptions are made by the General Meeting of Shareholders on an individual basis.

Hans-Werner Gassner has been Chairman of the Board of Directors since 2006. Markus Foser has been Vice Chairman since 2009. Cyrill Sele has been Secretary (recorder of the minutes) since April 2013.

3.4.2 First-time election and remaining term of office

(XLS:) Download

Name

First-time appointment

Elected until

Hans-Werner Gassner

2006

2015

Markus Foser

2009

2015

Markus Büchel

2009

2015

Patrizia Holenstein

2013

2016

Urs Leinhäuser

2014

2017

Gabriela Nagel-Jungo

2014

2017

Roland Oehri

2009

2015

3.5 Internal organization

3.5.1 Separation of tasks of the Board of Directors

(XLS:) Download

Name

Function

Committee memberships

*

Chairman

Hans-Werner Gassner

Chairman

Group Nomination & Compensation Committee *
Strategy Committee *

Markus Foser

Vice Chairman

Group Nomination & Compensation Committee
Strategy Committee

Markus Büchel

Member

Group Nomination & Compensation Committee

Patrizia Holenstein

Member

Group Audit & Risk Committee

Urs Leinhäuser

Member

Group Audit & Risk Committee

Gabriela Nagel-Jungo

Member

Strategy Committee

Roland Oehri

Member

Group Audit & Risk Committee *

3.5.2 Composition of all Board of Directors’ committees, their tasks and terms of reference

The Board of Directors may delegate a portion of its duties to committees. To support the Board of Directors in performing its tasks, the Board implemented two standing committees: the Group Audit & Risk Committee as well as the Group Nomination & Compensation Committee. In addition, there is a Strategy Committee formed on an ad hoc basis. The Board of Directors elects the committee members from among its members and appoints the chairmen. The Chairman of the Board of Directors cannot be elected to the Group Audit & Risk Committee. Each committee is composed of at least three members. As preparatory bodies, these committees deal in detail with the tasks assigned to them, submit the results of their work to the Board of Directors and make proposals if decisions are required. The Board of Directors is entitled to transfer decision-making authority to the committees. To date, it has, however, not made use of that right. The Board of Directors is entirely responsible for the tasks assigned to the committees.

The committee members must possess the expertise for the tasks and duties they have taken on. All committee members must be independent.

Terms of office on committees correspond to the length of terms of office on the Board of Directors. Committee membership also ends when members step down from the Board of Directors.

The Board of Directors issued separate regulations for the two standing committees, which stipulate their duties and individual competencies.

The committees can invite outside persons as experts and entrust LLB staff, in particular, with administrative duties.

Group Audit & Risk Committee

The Group Audit & Risk Committee supports the Board of Directors in fulfilling the duties and responsibilities vested in it by banking law. It:

  • evaluates the financial reporting, the effectiveness of the internal control system and risk management as well as the provisions to ensure compliance with legal and internal regulations;
  • ensures the quality of Group Internal Audit and external auditors as well as their cooperation;
  • monitors the rectification of weak points and deficiencies identified by Group Internal Audit and external auditors.

The “Regulation concerning the Group Audit & Risk Committee of the LLB Group” lays down the organization and workings as well as the competencies and responsibilities of the Group Audit & Risk Committee, in so far as these are not prescribed by law, the statutes or the rules of procedure. The following persons were members until 9 May 2014: Roland Oehri (Chairman), Markus Foser (Member), Ingrid Hassler-Gerner (Member) and Patrizia Holenstein (Member). The Group Audit & Risk Committee has been composed of the following members since Ingrid Hassler-Gerner stepped down from the Board of Directors and Urs Leinhäuser was elected to the Board of Directors: Roland Oehri (Chairman), Patrizia Holenstein (Member) and Urs Leinhäuser (Member).

(XLS:) Download

Name

Function

Roland Oehri

Chairman

Markus Foser

Member (until 9 May 2014)

Ingrid Hassler-Gerner

Member (until 9 May 2014)

Patrizia Holenstein

Member

Urs Leinhäuser

Member (since 9 May 2014)

The Group Audit & Risk Committee has the following tasks. In particular, it:

  • critically analyses the LLB Group’s Consolidated Interim Report and the Annual Report as well as the financial statement of the parent bank;
  • petitions the Board of Directors about whether the LLB Group’s Consolidated Annual Report and the financial statement of the parent bank can be presented to the General Meeting of Shareholders and published and whether the Consolidated Interim Financial Report can be published;
  • monitors and assesses the suitability and effectiveness of both the internal control system in the area of financial reporting and the internal control and assessment measures extending beyond the internal control system in the area of financial reporting and whether these are suitably adapted to the size, complexity, structure and the risk profile of the LLB Group.
  • takes note of and discusses the risk analysis made by the external auditors, the auditing strategy derived from it and the respective risk-oriented auditing plan;
  • critically analyses the audit reports submitted by the external audit and Group Internal Audit to the Board of Directors;
  • discusses major problems identified during the auditing process with the external auditors;
  • monitors and implements recommendations put forward by the external auditors and Group Internal Audit and eliminates weak points and deficiencies identified by them;
  • assesses the quality of the internal and external audit functions (external and internal auditors according to banking law and person and company law) as well as their cooperation;
  • discusses the annual activity report and the annual audit plan of Group Internal Audit as well as the approval of proposals to the Group Board of Directors;
  • assesses the qualification, independence, objectivity and performance of the external auditors and of Group Internal Audit;
  • examines the compatibility of the external auditors’ auditing activities with possible consulting mandates as well as assesses and discusses their professional fees;
  • submits a proposal to the Board of Directors for the attention of the General Meeting regarding the appointment or dismissal of the external auditors (appointed according to banking law and person and company law);
  • monitors the integrity and suitability of the risk management in the LLB Group, which is based on risk policy, in particular, in regard to market, credit, liquidity as well as operational risks;
  • assesses the integrity and suitability of the internal control system in regard to the identification, measurement, limitation and monitoring of risks;
  • supports the Board of Directors to formulate and implement the risk-relevant Group rulings and directives issued by the Board (overall risk policy, amongst others) as well as the relevant guidelines and processes that are set down in these rulings and directives;
  • assesses, at least on an annual basis, the Group-wide policy on risks after consulting the decision making authorities in question and considering the suggestions and proposals of the Group Executive Board. It makes a proposal to the Group Board of Directors as the approving authority. Further risk-relevant Group rulings and directives that have to be approved by the Group Board of Directors are to be treated in the same manner;
  • assesses the proposed global and individual limits for market, credit and liquidity risks for submission to the Board of Directors;
  • assesses the overall risk situation and supervises adherence to the limits set by the Board of Directors;
  • discusses, on a quarterly basis, the status reports of the chairmen of the Group Risk Committees (including the interim overall risk reporting);
  • supervises the measures taken by the Group Risk Management Committee to deal with exceptional situations.

Group Nomination & Compensation Committee

The Group Nomination & Compensation Committee supports the Board of Directors in fulfilling the duties and responsibilities vested in it by banking law. It:

  • formulates the guidelines for succession planning as well as the nomination of members of the Board of Directors and members of the Group Executive Board;
  • formulates the compensation standards for the parent bank and the LLB Group;
  • establishes the compensation of members of the Board of Directors and members of the Group Executive Board as well as of other employees, in so far as their compensation – in accordance with compensation standards – has to be determined by the Board of Directors;
  • establishes the guidelines for the human resource strategy.

The “Regulation concerning the Group Nomination and Compensation Committee” of the LLB Group lays down the organization and workings as well as the competencies and responsibilities of the Nomination & Compensation Committee, in so far as these are not prescribed by law, the statutes or the rules of procedure. The members of the Committee are:

(XLS:) Download

Name

Function

Hans-Werner Gassner

Chairman

Markus Büchel

Member

Markus Foser

Member

The Group Nomination & Compensation Committee has the following functions. In particular, it:

  • develops criteria for the selection, election and re-election of candidates for the Board of Directors;
  • develops criteria for the selection and nomination of candidates for the Group Executive Board for submission to the Board of Directors;
  • selects and evaluates candidates for the Board of Directors as well as submits election proposals to the Board of Directors for submission to the General Meeting of Shareholders in accordance with the developed criteria;
  • selects and evaluates candidates for the Group Executive Board as well as submits proposals to the Group Board of Directors for submission to the Board of Directors in accordance with the developed criteria;
  • develops and applies criteria for the performance review of the Board of Directors as well as for candidates up for re-election and for the performance review of the Group Executive Board in corpore as well as of individual members;
  • develops succession plans and periodically reviews them both in case of the end of a term of office and in case of the early stepping down of members from the Board of Directors and also in case of the age-related and ad hoc stepping down of individual members of the Board of Directors and the Group Executive Board;
  • ensures the further education of individual members of the Board of Directors and the Group Executive Board;
  • plans the introductory phase for new members of the Board of Directors;
  • reviews work practice in regard to age-related limits and term limits for members of the Board of Directors and the Group Executive Board;
  • supports the Board of Directors to nominate and assess the performance of the Head of Group Internal Audit;
  • nominates delegates to the Board of Directors committees of the LLB Group companies and investment companies;
  • formulates recommendations for the stipulation of principles and the establishment of principles and regulations for the compensation policy concerning the members of the Board of Directors, the members of the Group Executive Board and the other employees of the Liechtensteinische Landesbank for submission to the Board of Directors;
  • formulates proposals for the compensation of members of the Board of Directors, the members of the Group Executive Board and the Head of the Group Internal Audit for submission to the Board of Directors in accordance with existing principles and regulations;
  • reviews the Group regulation “Compensation Standards”, the LLB AG regulation of the same name as well as the Group regulation “Fit & Proper – Assessment of members of the Board of Directors, the Board of Management, the Head of Group Internal Audit and of key function holders” for submission to the Group Board of Directors;
  • annually reviews the compensation of members of the Group Board of Directors and the members of the Group Executive Board, the Head of Group Internal Audit and senior executives in risk management and compliance pursuant to the Group regulation “Compensation Standards” and the LLB AG regulation of the same name for submission to the Group Board of Directors in accordance with existing principles and regulations;
  • annually takes note of the compensation of all other LLB AG staff who are covered by the Group regulation “Compensation Standards” and by the LLB AG regulation of the same name;
  • determines and periodically reviews the principles of the human resource strategy;
  • reviews the processes for the systematic professional development of employees and executives.

Strategy Committee

It is the task of the Board of Directors to formulate and periodically evaluate the LLB Group’s strategy. It is supported by the Strategy Committee.

The members of the Committee are:

(XLS:) Download

Name

Function

Hans-Werner Gassner

Chairman

Markus Foser

Member

Markus Büchel

Member (until 9 May 2014)

Gabriela Nagel-Jungo

Member (since 9 May 2014)

Representation in foundations

Hans-Werner Gassner is a Member of the Board of the “Future Foundation of Liechtensteinische Landesbank AG”.

Markus Büchel and Markus Foser are Members of the Board of Trustees of the Personnel Pension Fund Foundation of Liechtensteinische Landesbank AG as employer representatives.

3.5.3 Working methods of the Board of Directors and its committees

As a rule, the Board of Directors of Liechtensteinische Landesbank AG holds an ordinary meeting once a month. During the 2014 business year, the Board held a total of ten ordinary meetings. The meetings lasted between 2.25 and 9.25 hours; the closed meeting lasted two days. The closed meeting was conducted by the Board of Directors in cooperation with the Group Executive Board following the ordinary meeting in June 2014. The current status of the Group projects and selected business area strategies were discussed, as were the mid-term planning and the ICAAP, and the intermediate results of the work on the restructuring plan for system-relevant banks required by the FMA was presented.

The Board of Directors is convened by invitation of its Chairman and is presided over by him. Together with the written invitation, the members of the Board of Directors also receive the agenda for the meeting, the minutes of the last meeting and other important documentation required for the meeting at least five business days prior to the date set for the meeting. Meetings of the Board of Directors can also be called with a shorter period of notice if there is a pressing matter. It is within the discretion of the Chairman to determine the urgency of that matter. If two members of the Board of Directors, the Group CEO or at least two members of the Group Executive Board submit a written request to the Chairman, he is required to convene an extraordinary meeting forthwith.

A quorum of the Board of Directors is constituted when at least half of its members are present. The Board of Directors passes its resolutions by a simple majority of the votes present. In the event of a tie, the Chairman has the casting vote. In urgent cases, resolutions may be passed by circular. Unanimity is required for resolutions to be dealt with by circular. Resolutions shall be passed by a simple majority of votes. In the case of a tie, the Chairman shall have the casting vote. If, after a meeting of the Board of Directors has been convened, urgent matters arise, these can be discussed at the meeting and decisions on them taken, provided that the votes subsequently cast by members of the Board who are properly excused are considered as if they had been present at the meeting.

The members of the Board of Directors are obliged to inform the Chairman in cases of real or potential conflicts of interest. This is regardless of whether the real or potential conflicts of interest are of a general nature or related to a matter to be discussed at a meeting. The Board of Directors shall decide whether there are grounds for the member concerned to abstain from voting. In such a case, that member may neither participate in the discussion of the matter in question nor vote on it. He has the right to express his opinion before leaving the Committee.

The Board of Directors periodically evaluates its own performance and also that of the committees. This evaluation serves to determine whether the Board of Directors and the committees are functioning appropriately. The results of the self-evaluation are put down in writing. In November 2014, the Board of Directors evaluated its own performance as part of a self-assessment process, which also included the work of the Group Audit & Risk Committee and the Group Nomination & Compensation Committee. The results of the self-evaluation demonstrated the high quality of work done by the Board of Directors and its committees.

(XLS:) Download

Date

Meeting

Attendance

Duration in h

30 January 2014

ordinary

all, with the exception of Markus Foser

3.50

27 February 2014

ordinary

All

3.75

14 March 2014

ordinary

All

4.50

8 April 2014

ordinary

All

2.25

13 May 2014

ordinary

All

4.50

24 / 25 June 2014

closed meeting

All

14.75

21 August 2014

ordinary

All

9.25

23 September 2014

ordinary

All

5.50

20 October 2014

ordinary

All

3.50

18 November 2014

ordinary

All

4.50

16 December 2014

ordinary

all, with the exception of Patrizia Holenstein

5.00

The members of the Group Audit & Risk Committee meet at least four times a year. These ordinary meetings are convened by the Chairman. An agenda is compiled prior to each meeting, which is sent together with the necessary information to the meeting’s participants. The members of the Group Audit & Risk Committee, the external auditors, the Head of Group Internal Audit and the Chairmen of the Group Risk Committees can request the Chairman of the Group Audit & Risk Committee to convene extraordinary meetings. During the 2014 business year, six ordinary meetings were held that lasted between 4.50 and 8.00 hours. Patrizia Holenstein was unable to attend one meeting. Otherwise, all of the other Committee members were present. To deal with specific issues, the Group Audit & Risk Committee can also invite other persons, such as members of the Group Executive Board, the Chairmen of the Group Risk Committees, other staff of the LLB Group companies, representatives of the external auditors or external consultants. The Group CEO, the Group CFO and the Head of Group Internal Audit usually participate in the meetings in an advisory capacity. No external experts were called in during the 2014 business year.

The Group Audit & Risk Committee has to periodically evaluate its own organization and mode of operation, particularly in regard to its independence, professional knowledge and its activities or have a third party conduct the evaluation. The Committee last conducted a self-evaluation in May 2014.

(XLS:) Download

Date

Attendance

Duration in h

25 February 2014

all

8.00

6 May 2014

all

4.50

17 June 2014

all (Urs Leinhäuser participated for the first time)

4.50

19 August 2014

all

6.50

4 November 2014

all, with the exception of Patrizia Holenstein

5.00

9 December 2014

all

5.00

The Group Nomination & Compensation Committee convenes as often as business requires, but at least twice a year. The meetings are convened by the Chairman. He compiles an agenda prior to each meeting, which is sent together with the necessary information to the meeting’s participants as early as possible. In 2014, five meetings were held that lasted between 0.5 and 9.75 hours. Markus Foser was unable to attend all of one meeting due to illness. Otherwise, all of the other Committee members were present. The following subjects were discussed:

  • interviews with the candidates for the Board of Directors;
  • selection of candidates for the Board of Directors for submission to the Board of Directors (or the Group Board of Directors) on the basis of a documented aptitude test;
  • evaluation of the achievement of objectives 2013 by the members of the Group Executive Board and the Head of Group Internal Audit;
  • establishment of the fixed and variable compensation of members of the Group Executive Board and the Head of Group Internal Audit in accordance with existing principles and regulations for submission to the Board of Directors;
  • establishment of the fixed compensation of the Board of Directors;
  • establishment of the goals 2014 for the members of the Group Executive Board and the Head of Group Internal Audit;
  • review of the compensation of senior executives in risk management and compliance as well as of other persons affected by the compensation standards regulation;
  • review of compliance with the Group-wide regulation and the compensation standards regulation;
  • review of the need to adapt the Group-wide regulation and the compensation standards regulation;
  • discussion of the compensation comparison by Towers Watson;
  • review of the human resource strategy;
  • succession planning for the Board of Directors and the Group Executive Board;
  • review of the need to adapt the “Regulation concerning the Group Nomination & Compensation Committee”.

To deal with specific issues, the Group Nomination & Compensation Committee can also invite other persons, such as the Head of Group Human Resources, representatives of the external auditors or external consultants. The Group CEO usually participates in the meetings of the Group Nomination & Compensation Committee in an advisory capacity; except when topics are discussed that particularly concern the Board of Directors itself, the business area Group Internal Audit or the performance assessment of the Group CEO and the establishment of his compensation. In the 2014 business year, the Group CEO and the Head Group Human Resources partially attended five meetings. An external expert (Witena AG) was called in for the search for new members of the Board of Directors.

(XLS:) Download

Date

Attendance

Duration in h

4 February 2014

all, Markus Foser present temporarily

9.75

18 March 2014

all

0.50

4 September 2014

all

2.00

23 September 2014

all

0.75

14 October 2014

all

1.00

The Strategy Committee did not convene in 2014. The annual strategy assessment was conducted as part of the Board of Directors’ meeting of 14 March 2014, which was attended by the full Board of Directors and the Group Executive Board (see chapter “Strategy and organization”).

Resolutions at the meetings are passed with an absolute majority of the members present. The attendance of more than half of the members is required for a quorum. In the case of a tie, the Chairman has the casting vote. The subjects dealt with and resolutions passed are recorded in the corresponding minutes. The minutes are circulated to the meeting’s participants and the members of the Board of Directors. The Chairmen of the committees inform the full Board of Directors about the agenda dealt with at the last committee meeting and submit proposals for those points requiring resolutions. Furthermore, they submit an annual activity report on the work of the committees to the full Board of Directors.

3.6 Definition of areas of responsibility

The Board of Directors is responsible for the direction, supervision and control of the LLB Group. It is ultimately responsible for the success of the LLB Group as well as for attaining sustained value for both shareholders and employees. It makes decisions in consultation with the Group CEO concerning the LLB Group’s corporate strategy and assumes final responsibility for monitoring the conduct of business. Furthermore, the Board of Directors monitors compliance with applicable legal provisions and regulations. At the request of the Group CEO, the Board of Directors determines the financial and human resources required to implement the corporate strategy.

The Board of Directors is responsible for all duties and competences and is vested with all powers not reserved to other corporate bodies by law, statutes or other internal regulations. It is responsible for determining the company’s organization and for prescribing the required regulations as well as for issuing the necessary guidelines. In specific cases and subject to legal provisions, the Board of Directors can transfer any part of its powers to one or more of its members or to one or more third parties (non-members).

The Board of Directors has the following duties and responsibilities, in particular:

  • the definition of management policies;
  • the definition of the LLB Group’s management strategy, including its periodic monitoring;
  • the passing of resolutions regarding all proposals to the General Meeting of Shareholders;
  • the discussion of the reports submitted by Group Internal Audit and external auditors;
  • approval of the reports concerning measures implemented on the basis of audit reports and their monitoring;
  • decisions regarding the LLB Group’s expansion into important new business operations as well as its withdrawal from existing important business operations;
  • decisions regarding the acquisition or sale of participations in other companies as well as the establishment or liquidation of LLB Group companies and the nomination of their Group Executive Boards;
  • decisions regarding the setting-up and closure of bank offices, branches and representative offices;
  • the stipulation of credit competences and the regulation of transactions for the account of corporate bodies and employees as well as resolutions regarding large commitments (including cluster risks);
  • decisions regarding the initiation of legal actions involving claims of over CHF 10 million as well as judicial and extrajudicial settlements involving amounts of over CHF 10 million;
  • the approval of all business matters and decisions that exceed the authority of the powers delegated by the Board of Directors;
  • decisions regarding the exercise of external mandates and activities by members of the Group Executive Board and Group Internal Audit staff.

Concerning the organization of business activities and the required concomitant issuing of rulings and directives, the Board of Directors is, in particular, responsible for:

  • the regular monitoring of corporate governance principles and management structures laid down in the rules of procedure;
  • the issuing of rulings and directives that are binding Group-wide, subject to respective applicable local law;
  • the regularization and monitoring of internal control systems;
  • the appointment and dismissal of the Group CEO, the Vice Group CEO, all the other members of the Group Executive Board and the Head of Group Internal Audit as well as the provisions for deputies and the review of their performance, including succession planning;
  • the supervision of the Group CEO, the Vice Group CEO and the other members of the Group Executive Board regarding compliance with legal provisions, statutes and rulings and directives as well as the LLB Group’s economic development;
  • the appointment of the committee members from among its members;
  • the regularization of the compensation principles within the LLB Group.

Concerning the ultimate liability for the organization of accounting, financial control and financial planning, the Board of Directors is, in particular, responsible for:

  • the approval of the applicable accounting standards;
  • the approval of medium-term planning and budgeting;
  • the preparation of the Annual Report and the Consolidated Annual Report;
  • the approval of the Consolidated Interim Report;
  • the ensuring of regular reporting on the course of business and extraordinary occurrences; this includes annotated reporting, on a quarterly basis, as regards the development of business, the earnings situation, balance sheet development, liquidity and equity requirements;
  • the stipulation of the competence to authorize expenditure.

Concerning the ultimate responsibility as regards risk management, the Board of Directors is, in particular, responsible for:

  • the issuing of regulations concerning the fundamentals of risk management, determination of risk appetite, risk control as well as accountability and the processes for the approval of risk-related transactions, whereby interest, credit, liquidity and market price risks and operational risks as well as legal and reputational risks, in particular, are to be identified, controlled, reduced and monitored;
  • the evaluation of the effectiveness of the internal control system;
  • the stipulation of overall and individual limits at least once a year;
  • the approval of quarterly reports, including comments on the risk situation;
  • the ensuring of prompt information in the event of imminent risk threats and losses of considerable importance.

The Group CEO is the highest authority within the LLB Group management and is liable to account. He is, in particular, entirely responsible for the development of the corporate strategy of the LLB Group and the divisions as approved by the Board of Directors and – in coordination with the Group Executive Board – for the implementation of this strategy. The Group CEO represents the Group Executive Board vis-à-vis the Board of Directors.

The Group CEO

  • ensures coherent management and development of the LLB Group as well as the implementation of the strategy that is stipulated and periodically monitored by the Board of Directors;
  • sets objectives for business activities and the course of business;
  • ensures high-quality and timely decision-making;
  • ensures that the objectives set by the members of the Group Executive Board comply with management objectives;
  • submits recommendations to the Board of Directors concerning compensation principles within the LLB Group;
  • monitors the implementation of any decisions that are made;
  • monitors the implementation of the resolutions made by the Board of Directors and its committees;
  • is responsible – in coordination with the Chairman of the Board of Directors – for concrete succession planning within the Group Executive Board;
  • represents the LLB Group in external communication.

The Group Executive Board, in cooperation with the Group CEO, is responsible for the management of the LLB Group.

In addition to the principles set forth in the statutes, the Group Executive Board is responsible, in particular, for:

  • implementing the resolutions made by the Board of Directors and its committees;
  • submitting suggestions concerning the organization of business activities in general and proposals for specific business matters to the Board of Directors and the responsible committees, provided these matters exceed the scope of authority of the Group Executive Board, in particular, with respect to:
    • the definition and periodic review of the LLB Group’s corporate strategy as well as the allocation of resources to implement the strategy and attain corporate objectives;
    • participations, Group companies, business offices, branches and representative offices;
    • medium-term planning;
    • annual expenditure and income budget;
    • financial reporting and the Annual Report.
  • implementing efficient processes and procedures as well as an effective internal control system to avoid and reduce risks of all kinds;
  • appointing persons (excluding staff of Group Internal Audit) to sign on behalf of the Liechtensteinische Landesbank as authorized signatories;
  • regularly reporting to the Board of Directors, its committees and, in particular, to the Chairman regarding the course of business and any extraordinary occurrences;
  • issuing the rulings and directives necessary for the management of the LLB Group;
  • coordinating the LLB Group’s range of products as well as specifying the pricing policy and the terms and conditions for the products and services offered;
  • deciding on the conclusion of cooperation and partnership agreements as well as the membership of professional associations;
  • authorizing investments for personnel expenses and general and administrative expenses of up to CHF 1 million in specific cases and investments of up to CHF 3 million (with prior notification of the Chairman of the Board of Directors) which are not included in the budget adopted by the Board of Directors. In such a case, the Chairman decides about any matters to be presented to the Board of Directors;
  • continuously monitoring the developments within the Divisions and business operations as well as initiating problem solving measures;
  • continuously monitoring financial reporting;
  • implementing risk management principles and control principles as well as the key rulings and directives concerning risk management;
  • establishing compliance functions and implementing appropriate internal systems and processes for safeguarding compliance within the LLB Group;
  • setting objectives for business activities and the course of business as it executes the strategy approved by the Board of Directors; thereby ensuring that decision-making is timely and of a high quality as well as monitoring the implementation of the decisions made;
  • ensuring that their objectives comply with general business targets and with the LLB Group’s course of business.

3.7 Information and control instruments vis-à-vis the Group Executive Board

The Chairman of the Board of Directors is informed about the agenda of Group Executive Board meetings and receives the minutes. He participates in its meetings in an advisory capacity as required. The purpose of this is for both parties to update each other on important topics and form their opinions.

Principally, the Board of Directors is kept informed about the activities of the Group Executive Board by the Chairman of the Group Executive Board. He ensures that the Chairman of the Board of Directors and the Board of Directors are informed in a timely and appropriate manner. The Group CEO regularly reports to the Board of Directors about current business developments and important business issues, including all matters that fall within the remit of the Board of Directors.

The Group CEO generally attends the meetings of the Board of Directors in an advisory capacity, informs it about the development of business as well as extraordinary occurrences and provides additional information on request. The Group CFO regularly informs the Board of Directors about finances and risk management as well as about the proper implementation of the Bank’s risk policy. The other members of the Group Executive Board attend meetings when matters involving them are dealt with. The Group CEO and the Group CFO usually participate in the meetings of the Group Audit & Risk Committee in an advisory capacity.

During meetings, each member of the Board of Directors can request information about all matters relating to the LLB Group. Outside of meetings, each member of the Board of Directors can also request information about the course of business from members of the Group Executive Board and, with the approval of the Chairman of the Board of Directors, also about individual business transactions.

Internal supervision and control

The LLB Group has standardized bank management systems that generate quantitative and qualitative data for the Group Executive Board and in a summarized form for the Board of Directors. This enables the Board of Directors to inform itself about significant business developments, such as the course of business, earnings situation, budget utilization, balance sheet development, liquidity, risk situation and the fulfilment of equity requirements. The Board of Directors discusses and approves the annotated reports on finances and risk management on a quarterly basis.

In exercising its supervision and control functions, the Board of Directors is also assisted by Group Internal Audit, which is subordinate directly to the Board. The Group Internal Audit assumes the function of the internal auditor for all Group companies that are required to prepare a consolidated statement of accounts and submits the reasons for its decision to the Board of Directors or the respective Board of Directors of the Group company as to whether there exists an effective internal control system and whether risks are being adequately monitored. Group Internal Audit provides independent, objective and systematic reporting services regarding:

  • processes for defining the strategy and risk appetite as well as the general compliance with the approved strategy;
  • the effectiveness of governance processes;
  • the effectiveness of the risk management, including the evaluation of whether risk identification and management are adequate;
  • the effectiveness of internal controls, in particular, whether these are adequate in relation to the risks taken;
  • if necessary, the effectiveness and sustainability of measures for reducing and minimizing risks;
  • the reliability and completeness of financial and operational information (that is, whether activities are correctly and fully documented) as well as the quality of the underlying data and models;
  • compliance with legal and regulatory requirements as well as with internal rulings and directives and agreements.

The powers and duties of Group Internal Audit are stipulated in a special set of regulations. The planning of annual auditing is carried out on the basis of the evaluation of risks and controls and is guided by a long-term auditing plan.

To avoid duplication of work and to optimize controls, the auditing plans are coordinated with the statutory auditors. The short-term auditing plan and the personnel requirement plan are reviewed by the Group Audit & Risk Committee and submitted to the Board of Directors for approval. In addition, Group Internal Audit regularly monitors the rectification of any deficiencies found and the implementation of its recommendations; it submits reports about this procedure to the Group Audit & Risk Committee.

The results of every examination are recorded in a written audit report. The audit reports of the parent bank and all Group companies are sent to the Chairman of the Board of Directors, the members of the Group Audit & Risk Committee, the Group Executive Board, the Head of Group Risk Management as well as the external auditor. The Head of Group Internal Audit compiles a report on a quarterly basis for submission to the Group Audit & Risk Committee and the Group Executive Board as well as a written activity report annually for submission to the Board of Directors. Particular findings that need to be tackled immediately are communicated to the Chairman of the Group Board of Directors without delay by the Head of Group Internal Audit. In addition, Group Internal Audit regularly monitors the rectification of any deficiencies found and the implementation of its recommendations; it submits reports about this procedure to the Group Audit & Risk Committee.

Risk management

The proactive approach towards risks is an integral part of the LLB Group’s corporate strategy and ensures the Group’s risk-bearing capacity. The LLB Group attaches great importance to proactive and comprehensive opportunity / risk management. As part of the risk policy, the Board of Directors issues guidelines and regulations concerning the principles of risk management. In this way, the Board of Directors sets qualitative and quantitative standards for risk responsibility, risk management, risk reduction and risk control.

The LLB Group manages risks according to strategic objectives. It evaluates and manages risks through the application of detailed, qualitative and quantitative standards for risk responsibility, risk management and risk control. The “Internal Capital Adequacy Assessment Process” (ICAAP) ensures that we always have adequate capital to cover all essential risks.

The risk management specialists strive to create and maintain a Group-wide uniform risk culture and risk approach. This establishes the fundamentals for an appropriate risk / return profile and an optimum allocation of capital. The Group Audit & Risk Committee invites the Chairmen of the Group Risk Committees to a quarterly discussion of the risk status. Their reports are summarized every six months in an overall risk report of the LLB Group, which is discussed by the Board of Directors. Further details concerning risk management can be found in the Notes to the consolidated financial statement of the LLB Group in chapter Risk Management.

Compliance

All employees of the LLB Group are obliged to comply with all legal, regulatory and internal regulations as well as to observe common market standards and professional codes of conduct. The compliance functions within the LLB Group annually report in writing to the Board of Directors about their activities, findings and measures taken (see chapter “Regulatory framework and developments”).

top of page