Information unaudited Information ungeprüftCorporate governance and integrity

We take a values-oriented approach to corporate governance. Compliance with laws and regulations is a matter of course for us. We also take targeted measures to enhance the corporate culture, practise effective compliance management and offer protection to whistleblowers.

The values of “integrity”, “respect”, “passion” and “excellence” underpin corporate governance at the LLB Group. We promote fairness, transparency and responsibility and help our employees to conduct themselves, at all times, in a manner that is ethically correct and legally compliant. In doing so, we protect the interests of our stakeholders and contribute to a more socially just society and economy.

General information

Our most important internal and external stakeholder groups have rated the issue of “corporate governance and integrity” as significant on account of the following impacts, risks and opportunities:

• Positive impacts are created in terms of employee satisfaction. The corporate culture at the LLB Group allows employees to develop new ideas, make their own decisions and speak openly about mistakes. At the same time, our values-oriented approach to corporate governance paves the way for proactive management of sustainability issues. This ensures our employees also take into account ethical, social and environmental considerations in everything they do and act accordingly. By providing whistleblowers with effective protection, we help uncover and combat wrongdoing.
• Negative impacts result from making investments in companies that cannot guarantee protection for whistleblowers. In doing so, we indirectly encourage such wrongdoing at our counterparties. Negative impacts are possible, over the short to medium term, as a result of investments associated with investment advice.
• Our strong corporate culture also represents an opportunity. It consolidates trust in the LLB Group as a safe bank and makes us an attractive potential employer. We are not currently able to quantify the positive financial effects.

No material risks were identified in the course of the materiality assessment.

Role of administrative, management and supervisory bodies

The Group Board of Directors at the LLB Group is responsible for strategy, risk appetite, control and financial management. It is involved in all important aspects of corporate governance, including devising policies and guidelines, the Code of Conduct and guiding principles based on standards. In the area of compliance management, the Group Board of Directors establishes the relevant guidelines and receives an annual written report on compliance risks and countermeasures from both Group Legal & Regulatory and Group Financial Crime Compliance. The business areas inform, support and advise the Group Executive Board on the assessment and monitoring of compliance risks.

All members of the Group Board of Directors and the Group Executive Board, as well as the holders of key positions, must meet specific “fit and proper” requirements as per the relevant regulation and also undertake regular further training (e.g. regarding insider trading, prevention of money laundering and the financing of terrorism, sustainability regulations). The members of the various committees within the Group Board of Directors must also have the appropriate specialist knowledge for their respective duties (see the Corporate governance section). The Group Legal & Regulatory organisational unit is responsible for the content of the Group-wide “fit and proper” regulation.

Identification of impacts, risks and opportunities

Responsible corporate governance includes an effective system for identifying and managing compliance and legal risks. By these risks, we mean violations of statutory and regulatory provisions as well as standards, which can lead to sanctions and, in particular, financial losses or reputational damage as a result.

Key compliance issues such as following regulatory changes, implementing new requirements, training employees and monitoring are dealt with by the appropriate departments. These implement new requirements, train employees and take care of monitoring. They include Group Regulatory Compliance, Group Financial Crime Prevention and Group Client Tax Compliance & Reporting.

The various reporting channels at the LLB Group are of particular importance for the identification of improper conduct and, besides the open communication culture, include the whistleblowing tool (see the Protection of whistleblowers section).

There are internal rules and regulations for all key issues, such as various Group directives relating to compliance management, conflicts of interest, market abuse, combating money laundering and the financing of terrorism, dealing with sanctions and data protection. All employees can refer to any of the Group directives, via LLBʼs own intranet, in the collected body of rules and regulations. We also always provide notification, via an intranet article, if any rule or regulation is approved by the Group Executive Board or Group Board of Directors. We have created a separate intranet page for our Code of Conduct too. The risk of potentially unlawful conduct affects every LLB Group location to the same extent.

Management of impacts, risks and opportunities

The following two subtopics are of relevance to our sustainability reporting in relation to corporate governance and integrity: “corporate culture” and “protection of whistleblowers”. This is also clear from the explanations relating to the materiality assessment performed in the reporting year (see the Double materiality assessment section). Later, we provide a separate description of how these sustainability aspects are managed.

Corporate culture

Besides strategy and structure, corporate culture is one of the most important factors in success. We at the LLB Group are committed to a concept of banking with a binding system of values. This is based on the idea of combining material and social values with high integrity.

Strategy

In 2023, we formulated qualitative guiding principles that define the framework of standards for our employees, providing the basis for how to act on a day-to-day basis. Our guiding principles consist of three elements:

• Purpose: this defines LLBʼs raison dʼêtre, apart from making a profit, and describes the overall contribution our bank makes to society and the environment. The purpose spells out to employees the basic point of their work and gives them a sense of focus. It also explains why certain values and requirements need to be observed.
• Vision: this is our Pole Star, which guides us as we go about our daily work. Its power lies in the way it describes an objective. It inspires and motivates us to achieve this objective.
• Values: these are the guidelines and benchmarks for decisions and innovations and enhance both customer loyalty and reputation. By giving us focus, they help us find answers to the most varied and complex questions.

Framework of standards for the LLB Group

We use various formats to share our framework of standards with new employees, as soon as they join. This was developed by Group Marketing, with input from the Group Executive Board, Group Corporate Communications & Sustainability and Group Human Resources (HR). The process incorporated interviews and a workshop with heads of business areas at the LLB Group. The Group Board of Directors was also involved in the process.

Policies

Our general strategic requirements are set out in numerous internal documents:

Our code of conduct

A key corporate governance instrument is the LLB Groupʼs Code of Conduct. It defines the kind of behaviour we expect from our employees at every level. This also provides a reliable framework for focusing on values-based and responsible action that meets statutory requirements as well as ethical and social standards. It is therefore a binding and collective requirement for all employees of the LLB Group. The Group Legal & Regulatory organisational unit is responsible for implementation.

It is our ambition that members of the Board of Directors, supervisory boards and boards of management, as well as employees, consistently align their behaviour with our Code. It helps us maintain our standing and our credibility in the eyes of customers, investors, the authorities and the public. Minor violations of the Code of Conduct are assessed by the respective line manager with the relevant HR business partner; serious violations are dealt with by the Integrity Committee (see the Integrity Committee section).

In the reporting year, we fundamentally revised our Code of Conduct. Apart from some general updating of content and terminology, adjustments were made in relation to issues that have increased in importance, such as dealing with sanctions, human rights or sustainability. The changes have applied since 1 October 2024. Our Code of Conduct is publicly available via the LLB Group website.

Compliance management and conflicts of interest

Together with the Code of Conduct, the Group regulations on “Compliance management” and “Management of conflicts of interest” provide the foundations for our strong, ethics-based corporate culture. They can be accessed via LLBʼs own intranet in the collected body of rules and regulations.

Our “Compliance management” regulation builds on the Code of Conduct. It basically describes how compliance is organised at the LLB Group and is intended to present a consistent and clear picture of how compliance is integrated and practised within our business. Consistent implementation and monitoring of the regulation ensure compliance with all legal and regulatory requirements. The Group regulation is binding for all Group companies. It also covers the issue of whistleblowing (see the Protection of whistleblowers section). The Group Legal & Regulatory organisational unit is responsible for the content.

Our Group regulation “Interessenkonflikt-Management” (Group regulation on “Management of conflicts of interest”), which also builds on the Code of Conduct, defines for employees a set of rules of conduct and measures for how to identify and deal with conflicts of interest. The Group Regulatory Compliance organisational unit is responsible for the content. Our aim is to identify these conflicts at an early stage and create transparency around them, so they can be managed and kept under control. We want to minimise risks and ensure decisions are made with integrity. The rules also help prevent bribery and corruption. We believe the risk from potential illegal behaviour – including bribery and corruption – is similar across all LLB Group locations.

If employees become aware of violations of the regulations referred to, they may – as an alternative to the whistleblowing channel – inform in person or by phone their line manager, the General Counsel, the Head of Group Internal Audit or the Head of Group Human Resources. Group Internal Audit and Group Regulatory Compliance perform ongoing checks, including to cover any wrongdoing. Group Legal & Regulatory is responsible for the initial assessment of reports. Any further investigation is undertaken by the respective organisational unit together with Group Human Resources. Serious violations are forwarded to the Integrity Committee.

Measures

Two key instruments help us bring our corporate culture to life and give all employees a sense of focus: the cultural journey and ongoing training courses on ethical and legal issues.

Cultural journey

In 2017, we came up with what we call the cultural journey, which we use to motivate employees to think about their behaviour, share ideas and suggest potential changes to processes. The purpose of this programme is to keep on developing the corporate culture in line with our business strategy. Suitable measures are taken in relation to a focus topic, which changes every two to three years.

The current emphasis is a focus on customers and results (or KEO, after the German phrase Kunden- und Ergebnisorientierung). The aim is to integrate this into the corporate culture. First of all, workshops were held for all employees across the Group, with a view to developing a common understanding of KEO. To build on this, they were given the opportunity to include individual KEO objectives in their agreed personal objectives (for staff appraisal purposes). Managers are supported by a range of instruments, intended to make KEO more relevant to peopleʼs day-to-day experience.

The second phase, which began in the reporting year, involved a KEO camp for all managers. Here, progress made so far was measured and the KEO check was introduced (and training provided). This includes a structured checklist covering the issues of collaboration and focusing on customers and results. It started to be introduced in the fourth quarter of the reporting year. Various measures are planned for 2025, such as presentations by managers in team meetings or webinars for employees.

Training of our employees

As part of the onboarding process, we provide training for all employees on issues of statutory relevance, such as due diligence, conflicts of interest, compliance management, dealing with customers in relation to tax matters and cross-border provision of services. In doing so, we ensure they are familiar with the law, and that our own requirements are met – in terms of business being conducted in the correct manner. New employees must complete all training courses of importance to their area of activity within three months of joining.

Our customer advisers undergo annual training on due diligence and the Markets in Financial Instruments Directive (MiFID) or the Swiss Financial Services Act (FinSA). They also need to be familiar with the supervisory provisions of the countries where the customers they serve are domiciled. Mandatory country-specific training courses must be completed with this in mind. These set out which services and activities are permitted in terms of customer acquisition and customer service for customers who visit bank premises, are looked after on a cross-border basis or receive visits at home.

A further training course for all employees on conflicts of interest deals with the issues of employee transactions, bribery and corruption, accepting and offering gifts, and secondary occupations. This training must be repeated every three years; in the event of a significant revision of the regulations in the interim period, the training can also take place earlier when the changes come into force. As regards our other training courses, the party creating them decides how often they need to be repeated. The typical cycle is every two to three years.

In addition, we are planning to roll out Group-wide training on our Code of Conduct over the course of 2025. LLB runs ad hoc training courses as required, for example when regulatory or practical changes are introduced.

Key figures and targets

The quality of the corporate culture is indirectly reflected in what we do, although it is difficult to measure. But to help us assess it, we include related questions in our regular, comprehensive employee surveys (see the Diversity and equal opportunities section).

Protection of whistleblowers

Banks must ensure legal compliance, in order to gain customersʼ trust and, in particular, minimise any financial risks. Therefore, the protection of whistleblowers is critically important. These help us identify potential wrongdoing at an early stage and allow prompt intervention. A reliable reporting culture, based on trust, not only enhances the bankʼs integrity, but also protects it against financial loss and reputational damage.

Strategy

Employees with information on potential impermissible behaviour are able to report this internally at the bank. Impermissible behaviour contravenes our Code of Conduct or our compliance principles and may work to our disadvantage. Reports may be made verbally, in writing or electronically, either openly or anonymously, using what is known as the Trusty Tool or to one of the local whistleblowing offices. These contact persons are based at all Group companies. A dedicated intranet page provides information on our whistleblowing tool and contains a list of local contact persons.

Even when reports are made openly, the name of the whistleblower is kept strictly confidential. Whistleblowers also enjoy comprehensive protection against reprisals under the relevant regulations. The so-called Whistleblower Directive (EU) 2019/1937 has not yet been implemented in Liechtenstein. However, we have adopted a proactive approach and implemented the corresponding requirements. The Whistleblower Directive has been integrated into national law in Austria and Germany. Implementation at LLB Österreich and the Germany branch was performed in accordance with EU law. External whistleblowers are not able to submit reports via the Trusty Tool directly. They can access a feedback form on our website, where they can provide feedback, make complaints and file whistleblowing reports.

Also relevant is the protection of whistleblowers at companies in which we invest, in the context of investment advice. Here, any decisions on investments are made by our customers alone. Consequently, our scope for ensuring whistleblowers are protected through suitable strategies and measures is limited. As a result, we have not implemented any strategies, measures, targets or key figures (metrics) for this issue.

Policies

The protection of whistleblowers is ensured through the Group regulation on “Compliance management” (see the Compliance management and conflicts of interest section). This

• defines the responsibilities of the Integrity Committee and the whistleblowing offices;
• provides an outline of the reporting process;
• stipulates the need for confidentiality and for whistleblowers to be protected;
• sets out the internal reporting obligations of the General Counsel.

The regulation is binding for all Group companies. At LLB Österreich, the manual for the whistleblower system also applies. The Group Legal & Regulatory organisational unit is responsible for the content.

Integrity Committee

When the LLB Group receives reports from whistleblowers regarding incidents or violations, these are dealt with by the Integrity Committee; this operates from a central location at the LLB parent bank. It investigates tip-offs that come in through the relevant whistleblowing channels, although it may also take action at its own initiative. If a report comes in, it may take the following measures:

• investigation of the matter, if the local whistleblowing office has not done this already;
• assessment of whether a violation of laws, regulations, good faith, basic decency or similar is involved;
• necessary protection measures for the whistleblower or persons or offices they have named.

If the Integrity Committee concludes there has been a violation of regulations, it may take further steps in accordance with the Group regulation on “Compliance management”. The Committee consists of the General Counsel (Chairman), the Head of Group Human Resources, the Head of Group Business Risk Management, the Head of Division at the parent bank and the local head of the business area. In the interest of all concerned, processes are conducted independently, objectively and promptly.

The Integrity Committee meets as required, but at least every quarter. In the event of a minor or serious violation of regulations by a member of the Group Executive Board, the Group Board of Directors determines which committee will take appropriate measures, as opposed to the Integrity Committee.

Measures

The Integrity Committee is responsible for any measures associated with the protection of whistleblowers. The identity of the whistleblower and other information that may help reveal their identify may only be disclosed to the persons responsible for receiving reports and taking any subsequent measures. The only possible exception is if a necessary and proportionate obligation applies in relation to investigations by national authorities or legal proceedings. The whistleblower should generally be informed about this in advance.

Our employees are made aware of and informed about whistleblowing. The last training course on this issue was held in autumn 2023; so far, nothing has been decided as to how often it should be repeated. The training is mandatory for new employees. It is expected that all employees with access to a computer will repeat it in autumn 2025. We have not implemented any specific training for members of the Integrity Committee. All measures are based on the relevant European requirements.

Key figures and targets

Reports of impermissible behaviour are recorded in the chosen application and also referred to the Group Executive Board and the Group Board of Directors from 2025, for the previous financial year in each case, either in the “Tätigkeitsbericht” (“activity report”) or in the risk analysis. These list the number of reports for each Group company, along with the main findings and measures resulting from the reports. This information is not made public for confidentiality reasons. We have not defined any quantitative targets for the protection of whistleblowers.