3. Board of directors

3.1 Members of the board of directors

3.2 Other activities and vested interests

  First appointed End of term

Hannes Wüest, CH, 1946
Chairman of the board of directors (non-executive 1)
Chairman of the Strategy and Investment Committee
2012 2015

Education Master of cultural engineering,Swiss Federal Institute of Technology (ETH), Zurich

Professional background Delegate to the board of directors of MZ-Immobilien AG, 2009-2012; founder and managing director of Wüest & Partner AG, Zurich, 1985-2006

Previous activities for the Zug Estates Group Member of the board of directors of MZ-Immobilien AG, 2007-2012

Activities on governing and supervisory bodies None

Heinz M. Buhofer, CH, 1956
Member of the board of directors (non-executive)
Chairman of the Nomination and Compensation Committee
2012 2015

Education Master of economics (lic. oec.), University of St. Gallen

Professional background Managing director of Metall Zug AG, Zug, 2002–2008

Previous activities for the Zug Estates Group Member of the board of directors of MZ-Immobilien AG, 1999-2012 (chairman 2000-2007 and 2009-2012); various operational functions at MZ-Immobilien AG, 1984-1997

Activities on governing and supervisory bodies Chairman of the board of directors of Metall Zug AG, Zug; vice-chairman of the board of directors of Wasserwerke Zug AG, Zug

Prof. Dr. Annelies Häcki Buhofer, CH, 1954
Member of the board of directors (non-executive)
Member of the Hotel and Audit Committees
2012 2015

Education PhD, University of Zurich

Professional background Management roles within the Faculty of Humanities at the University of Basel, since 2002; professor of German Linguistics at the University of Basel, since 1989

Previous activities for the Zug Estates Group Member of the board of directors of MZ-Immobilien AG, 1997-2012

Activities on governing and supervisory bodies Chairman of the board of directors of BURU Holding AG, Cham, and Holmia Holding AG, Zug; role in management bodies of national and international professional associations; member of the Research Council of the Swiss National Science Foundation

Armin Meier, CH, 1958
Member of the board of directors (non-executive)
Chairman of the Hotel Committee
2013 2015

Education IT engineer, Bern University of Applied Sciences, Executive MBA, University of St. Gallen

Professional background Managing Director of Boyden Switzerland, Zurich, since 2010; Chief Commercial Officer Travelport, London, 2008–2010; CEO Kuoni Travel Holding Ltd, Zurich, 2005–2007; member of the executive board of the Federation of Migros Cooperatives, Zurich, 2002–2005; President and CEO Atraxis AG, Zurich, 1998–2002; CEO ABB PTI AG, Baden, 1995–1998

Previous activities for the Zug Estates Group Chairman of the board of directors of Hotelbusiness Zug AG, 2012-2013

Activities on governing and supervisory bodies Member of the board of directors of KIBAG HOLDING AG, Zurich, and directorships at other unlisted companies

Dr. Beat Schwab, CH, 1966
Member of the board of directors (non-executive)
2014 2015

Education Dr. rer. pol., University of Bern MBA, Columbia University

Professional background Head Real Estate Asset Management Switzerland of Credit Suisse AG, since 2012; CEO of Wincasa AG, 2006–2012; member of the management of ISS Schweiz AG, 2004–2006; director of SEVIS AG, 1999–2004; various positions in banking

Previous activities for the Zug Estates Group None

Activities on governing and supervisory bodies Member of the board of directors of Wincasa AG, various mandates at Credit Suisse AG and related companies/organizations

Heinz Stübi, CH, 1954
Member of the board of directors (non-executive)
Chairman of the Audit Committee
2012 2015

Education Master of economics (lic. oec.), University of St. Gallen, chartered accountant

Professional background Independent entrepreneur, since 2006; deputy CFO, CIO and Head of Operations Latin America of the Bosch Packaging Division, Sigpack International AG, Neuhausen, 2004-2005; CFO SIG Pack Division, SIG Holding AG, Neuhausen, 2000-2004; Head of Finance and Administration Saurer Sticksysteme AG, Arbon, 1993-2000; various positions within Finance unit at Roche Group, Basel, 1980-1993

Previous activities for the Zug Estates Group None

Activities on governing and supervisory bodies Vice-chairman of the board of directors of Thurella AG, Egnach; member of the board of directors of 4B Holding AG, Zug

Martin Wipfli, CH, 1963
Member of the board of directors (non-executive)
Member of the Strategy and Investment Committee as
well as the Nomination and Compensation Committee
2012 2015

Education Attorney, Master of law (lic. iur.), University of Bern

Professional background Executive partner at Baryon AG, since 1998; partner with Tax Partner AG, Zurich, 1997-1998; Head of the Tax Department of Bank Leu Ltd, Zurich, 1995-1997; tax advisor with ATAG Ernst & Young AG, Zurich, 1990-1995

Previous activities for the Zug Estates Group Member of the board of directors of MZ-Immobilien AG, 2007-2012

Activities on governing and supervisory bodies Chairman of the board of directors of ELMA Electronic AG, Wetzikon, and nebag ag, Zurich; member of the board of directors of Metall Zug AG, Zug, and directorships at other unlisted companies

1 Hannes Wüest bore operational responsibility in his capacity as delegate to the board of directors of MZ-Immobilen AG until June 2012.

3.3 Additional mandates

A member of the board of directors may hold no more than four additional mandates in listed companies and no more than 20 mandates in unlisted companies. For the purposes of calculating, the number of mandates in cases where several legal entities are associated with one another, one mandate is counted in full and the remaining mandates each count 10%. Mandates are deemed to comprise activities in the most senior executive and management bodies of legal entities that are obliged to obtain an entry in the commercial register or a corresponding foreign register and which are not controlled by the company. There is no limit on the number of other types of mandate that may be held provided these do not hinder the member of the board of directors in the performance of their duties toward the company and other enterprises associated with it.

The Nomination and Compensation Committee reviewed and verified compliance with the relevant provisions of the articles of association in the 2014 financial year.

3.4 Elections and terms of office

Members of the board of directors are elected by the general meeting of shareholders on an individual basis and for a period of one year or until the next ordinary general meeting. The general meeting of shareholders elects the chairman of the board of directors and the members of the Nomination and Compensation Committee on an individual basis. In all other respects, the board of directors constitutes itself. Members of the board of directors may be re-elected at any time, but must step down at the subsequent general meeting of shareholders after reaching the age of 70.

The general meeting of shareholders also elects an independent proxy on an annual basis. The term of office of the independent proxy ends at the closing of the next ordinary meeting of shareholders.

3.5 Internal organizational structure

In the year under review the board of directors held four official meetings, which were also attended by the members of Group Management. These meetings typically last half a day. The agenda items for the meetings of the board of directors are specified by the chairman and prepared by Group Management. Every member of the board of directors and every member of Group Management is entitled to request that a meeting be convened, specifying the meeting's purpose. Ten days before a meeting of the board of directors, the members of the board of directors will receive documentation that allows them to prepare for the discussion of the agenda items. Decisions are made by the entire board of directors with the assistance of the following four committees: the Strategy and Investment Committee, the Hotel Committee, the Nomination and Compensation Committee, and the Audit Committee.

Strategy and Investment Committee

The Strategy and Investment Committee drafts company strategy for the attention of the board of directors and steers the investment process. The committee receives investment proposals for preliminary evaluation and makes recommendations to the board of directors. It also initiates the implementation of approved projects depending on the marketing situation and monitors the execution of these transactions. The Strategy and Investment Committee usually meets once a month. In the year under review, 11 meetings were held, each lasting approximately three hours. The committee consists of Hannes Wüest (chairman) and Martin Wipfli; the Group Management also participates in the discussions.

Hotel Committee

The Hotel Committee assists the Group board of directors in managing the hotel & catering business unit in that the board of directors of the hotel company reports directly to the committee. The Hotel Committee works with the board of directors and management of the hotel company to formulate the strategy of the hotel & catering business unit. The Hotel Committee usually meets four times a year. In the year under review, four meetings were held, each lasting three hours. Armin Meier (chairman) and Annelies Häcki Buhofer serve on the committee, and the Group Management also participates in the discussions.

Nomination and Compensation Committee

The Nomination and Compensation Committee develops and reviews the principles of the company's corporate governance. It regularly reviews the composition and size of the board of directors and its committees and the boards of the subsidiaries, and Group Management, and proposes suitable candidates for the various managing bodies to the board of directors. The committee also drafts, for the attention of the board of directors, the proposal to be submitted to the general meeting of shareholders regarding the amount of the total compensation and the additional compensation to be paid to the members of the board of directors and Group Management, as well as the compensation report. In keeping with the level of compensation approved by the general meeting of shareholders, the committee submits to the board of directors proposals regarding the remuneration of the board of directors and Group Management, and scrutinizes and reviews the targets and principles of the staffing policy on behalf of the board of directors. Furthermore, it reviews the assessments put forward by the CEO in respect of members of Group Management and monitors staff development and staff succession planning, along with the relevant development measures. The Nomination and Compensation Committee usually meets three times a year. In the year under review, three meetings were held, each lasting approximately two hours. Heinz M. Buhofer (Chairman) and Martin Wipfli serve on the Nomination and Compensation Committee. The CEO also participates in the discussions, except when his employment contract or remuneration are being discussed.

Audit committee

The Audit Committee assists the board of directors in fulfilling its supervisory responsibility by reviewing the financial information provided to shareholders and third parties, the internal control systems and the auditing process. It makes an independent assessment of the quality of the annual financial statements, including the appraisal reports of estimated market values, and discusses these with Group Management and the auditors. The Audit Committee proposes to the board of directors as to whether the financial statements may be recommended for submission to the general meeting of shareholders. In addition, it specifies the plan and scope of the work conducted by the auditors, evaluates the auditors' performance and remuneration, ensures that the auditors are independent, and checks that the auditing is compatible with any other advisory mandates. The Audit Committee also assesses the efficiency of the internal control system with due consideration of risk management and evaluates compliance with laws, regulations, and accounting Standards, as well as adherence to internal rules and directives. The Audit Committee usually meets quarterly. In the year under review, five meetings were held, each lasting three hours. Heinz Stübi (chairman) and Annelies Häcki Buhofer serve on the committee; the CEO, CFO and auditors also attend the meetings.

3.6 Definition of areas of responsibility

The board of directors has established organizational regulations regarding the distribution of areas of responsibility between Group Management and the board of directors. These can be found at www.zugestates.ch. In principle, Group Management's mandate is comprehensive. Even if an area of responsibility lies with the board of directors, Group Management is expected to take the intellectual initiative and to address emerging business opportunities until they reach a stage at which a decision can be made.

3.7 Information and control instruments vis-à-vis Group Management

The board of directors controls Group Management and supervises its method of working. The Zug Estates Group has a comprehensive management information system. The Group companies report to Group Management once a month. The board of directors is informed of the Group's operational and financial performance every quarter. The results are compared with the same period of the previous year and with the budget. The achievability of budgets, which are integrated into rolling medium-term plans, is reviewed several times a year on the basis of extrapolations. Furthermore, Group Management keeps the board of directors fully informed at board meetings on the progress of business.

The board of directors has put in place a comprehensive system for monitoring and managing the risks associated with the company's activities. This process involves risk identification, risk analysis, risk management and risk reporting. Risks are identified in the categories of environment, strategy, reputation, finance, IT/infrastructure, personnel/management/organization, products/services and processes, and evaluated in terms of their likelihood of occurrence and potential to cause damage. Group Management is responsible for monitoring and managing risk. In the case of major single risks, certain individuals are assigned responsibility for taking concrete measures to manage these risks and for monitoring their implementation. On behalf of the Audit Committee, Group Management draws up a risk report for the board of directors at regular intervals.

My Annual Report

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