Corporate governance 125 Corporate governance

126 Principles 126 Group structure 126 Operational structure 126 Legal structure 130 Capital structure 131 Shareholders 134 Board of Directors 144 Executive Management Board 151 Compensation, shareholdings and loans 151 Changes of control and defence measures 151 Information and control mechanisms for the Board of Directors and the Executive Management 152 External auditors 152 Information policy

Straumann Group – 2016 Annual Report 126 Corporate governance

PRINCIPLES – Sales Western Europe The principles and rules of Straumann’s corporate gov- – Sales North America, ernance are laid down in the Articles of Association, the – Sales Latin America and regional Distributor organizational regulations, the code of conduct, and the Management, including Neodent’s manufacturing charters of the Board Committees. These principles and plant in Brazil rules are the basis of our corporate governance disclo- – Sales Asia / Pacifc and regional sures, which comply with the Directive on Information Distributor Management. relating to corporate governance published by the SIX Swiss Exchange, where Straumann’s shares have been On 1 January 2017, Straumann reorganized all its sub- traded since the company’s initial public offering in 1998. sidiaries in Central and Western Europe into a single European region and the other markets into the GROUP STRUCTURE ‘Distributor & Emerging Markets EMEA’ region, which Straumann Holding AG is a listed stock corporation in- includes Africa, Central Asia, Eastern Europe, the Middle corporated under the laws of Switzerland and domiciled East and Russia. as well as registered in Basel. Information about the company’s shares, which are traded on the main seg- LEGAL STRUCTURE ment of the SIX Swiss Exchange under the symbol STMN, LISTED COMPANIES is provided on p. 176. Straumann Holding AG is listed in the main segment of the Swiss stock exchange. No other company con- Straumann Holding AG is the ultimate parent company trolled by Straumann Holding AG is listed on a of the Straumann Group (referred to collectively as ‘the stock exchange. Group’), which is headquartered in Basel and, as of 31 December 2016, includes 46 wholly owned and two Name Straumann Holding AG partially-owned subsidiaries (see chart p. 128 f.) as well Domicile Peter Merian-Weg 12, 4052 Basel, Switzerland as 11 companies in which non-controlling interests are Listed on SIX Swiss Exchange held (see table opposite). Valor number 1228 007 ISIN CH 0012 280 076 OPERATIONAL STRUCTURE Ticker symbol STMN In 2016, the operational structure of the Straumann Group comprised the following groups/departments and sales regions (in alphabetical order): NON-LISTED GROUP COMPANIES – Corporate Services, comprising: Corporate Communi- The major subsidiaries of Straumann Holding AG are cation, Human Resources, Legal Compliance & Intel- presented on p. 128 f. and in Note 33 to the Financial lectual Property and Strategic Planning & Business Statements on p. F 64 f. of the Financial Report. Development – Customer Solutions & Education, comprising: Cus- The Group is managed through its Headquarters at tomer Marketing & Education, Marketing Communi- Institut Straumann AG in Basel. As laid down in the or- cations and Product Management ganizational regulations, the respective Regional Sales – Finance, comprising: Treasury, Controlling and all Head, the CFO and the General Counsel usually repre- other fnance-related functions, Corporate IT, Corpo- sent Straumann Holding AG and / or the other holding rate Procurement, Facility Management, Internal Au- companies of the Straumann Group on the boards of dit and Investor Relations the subsidiaries. – Instradent Management – Research, Development & Operations, comprising: Straumann’s premium products and services are sold Project Management, Research & Development, Tech- through Institut Straumann AG, various distribution sub- nical Services, Quality Management & Regulatory Af- sidiaries, and third-party distributors (see chart on fairs, Production, Corporate Logistics p. 184 f. for overview of subsidiary and distributor loca- – Sales Central Europe and Worldwide Distributor Man- tions). Other brands of the Straumann Group are sold agement (excluding APAC and LATAM) through various distribution subsidiaries and

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STRAUMANN’S PARTICIPATION AND REPRESENTATION IN OTHER COMPANIES On 31 December 2016, Straumann held the following non-controlling stakes:

Non-consolidated company Location Activities Capital rights Straumann representation held Anthogyr SAS Sallanches Implant solutions for the value 30% 1 Board seat (France) segment in China Createch Medical SL Mendaro CADCAM prosthetics for 30% 1 Board seat (Spain) multiple implant systems Dental Wings Inc Montreal Dental prosthetics design (CAD), 55% 2 Board seats (Canada) software and scanners Instradent Deutschland GmbH Hügelsheim Distribution of implant & 51% At general meeting, (Germany) prosthetic value brands 100% as of 1 Jan 2017 Medentika GmbH Hügelsheim Implant prosthetics & 51% At general meeting, control- (Germany) dental implants ling interest as of 1 Jan 2017 Open Digital Dentistry AG Zug (Assets and activities transferred 44% n / a (in liquidation) (Switzerland) to Dental Wings GmbH) RODO Medical, Inc. San Jose Prosthetics 12% 1 Board seat (USA) T-Plus New Taipei Dental implant systems 49% 1 Board seat City (Taiwan) V2R Biomedical Inc. Montreal Prosthetically-driven guided- 30% 1 Board seat (Canada) surgery solutions Valoc AG Möhlin Prosthetics (implant based 44% 1 Board seat (Switzerland) denture-attachment systems) Zinedent Implant Üretim AS Ankara Joint venture, supply of dental 50% 1 Board seat (Turkey) implants and prosthetics

The Straumann Group has no other significant shareholdings of more than 10%.

third-party distributors, mostly managed through the CHANGES IN 2016 AND EARLY 2017 Instradent business platform at Headquarters in Basel. Early in 2016, Straumann Brasil Ltda was merged into Neodent, which is now responsible for the promotion In certain countries, Straumann has established fully- and sale of premium and value products in Brazil in owned subsidiaries under the name of ‘Manohay’ with addition to the design, development, and manufac- the purpose of distributing both premium and value ture of Neodent dental implants and related pros- brands from a single point (see pp. 128 f., 182ff., F 64 f. thetic components. for an overview of subsidiary locations). In the second quarter, STM Digital Dentistry was estab- On 31 December 2016, Straumann Holding AG directly lished in Hong Kong in cooperation with Modern Dental or indirectly held 100% of the capital and voting rights Group. STM Digital Dentistry holds 100% of etkon China, in all consolidated Group companies with the exception which was established towards the end of 2016 and has of STM Digital Dentistry, in which Straumann Holding not yet begun production. AG holds a controlling stake of 49% (see p. 129). In ad- dition, Straumann Holding AG directly or indirectly held In the context of the Group’s acquisition of Equinox and capital rights in the companies listed in the table above. our strategy to penetrate the Indian market, Straumann Dental India Private Limited was converted into an LLP and Equinox Implants LLP was founded - both in the third quarter of 2016. In addition, Equinox Dental AG, a holding company, was founded in Switzerland.

Straumann Group – 2016 Annual Report 128 Corporate governance

Principal Group Companies Ownership & share capital

STRAUMANN HOLDING AG Basel, Switzerland CHF 1 587 898

STRAUMANN STRAUMANN INSTITUT STRAUMANN AG MANUFACTURING, INC SINGAPORE PTE LTD Basel, Switzerland Andover, USA Singapore CHF 100 000 USD 1 SGD 1

STRAUMANN ITALIA SRL STRAUMANN USA LLC STRAUMANN PTY LTD Milan, Italy Andover, USA Victoria, Australia EUR 270 000 USD 1 AUD 100

INSTRADENT ITALIA SRL INSTRADENT USA, INC STRAUMANN Milan, Italy Andover, USA NEW ZEALAND LTD EUR 10 000 USD 2 000 000 Napier, New Zealand NZD 0 EQUINOX IMPLANTS LLP STRAUMANN CANADA LTD Mumbai, India Burlington, Canada STRAUMANN JAPAN KK INR 170 000 000 CAD 100 000 Tokyo, Japan JPY 10 000 000 EQUINOX DENTAL AG INSTRADENT CANADA LTD Basel, Switzerland Burlington, Canada ETKON JAPAN KK CHF 100 000 CAD 500 001 Shibayama, Japan JPY 10 000 000 STRAUMANN VILLERET SA MANOHAY COLOMBIA SAS Villeret, Switzerland Bogotá, Colombia STRAUMANN (BEIJING) MEDICAL CHF 9 000 000 COP 5 500 062 207 DEVICE TRADING CO LTD Beijing, China RMB 40 000 000 INSTRADENT AG MANOHAY ARGENTINA SA Basel, Switzerland Buenos Aires, Argentina CHF 100 000 ARS 8 000 000 STRAUMANN DENTAL KOREA INC Seoul, Republic of Korea MANOHAY MEXICO SA DE CV KRW 2 300 000 000 México DF, Mexico MXN 38 392 615 STRAUMANN DENTAL INDIA LLP Gurgaon, India MANOHAY CHILE SPA INR 1 256 000 000 Santiago, Chile CLP 263 200 000

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STRAUMANN HOLDING STRAUMANN AB STRAUMANN LTD DEUTSCHLAND GMBH Mölndal, Sweden Crawley, UK Freiburg, Germany SEK 100 000 GBP 300 000 EUR 25 000

BIORA AB INSTRADENT LTD STRAUMANN GMBH Malmö, Sweden Crawley, UK Freiburg, Germany SEK 950 152 GBP 1 000 EUR 200 000

STRAUMANN AS MANOHAY DENTAL SA ETKON GMBH Oslo, Norway Madrid, Spain Gräfelfng, Germany NOK 1 000 000 EUR 60 101 EUR 326 000

STRAUMANN DANMARK APS INSTRADENT IBERIA SL INSTRADENT EUROPE GMBH Brøndby, Denmark Madrid, Spain Freiburg, Germany DKK 125 000 EUR 3 000 EUR 25 000

STRAUMANN OY STRAUMANN SARL STRAUMANN GMBH Helsinki, Finland Marne-la-Vallée, France Vienna, Austria EUR 32 000 EUR 192 000 EUR 40 000 49%

STRAUMANN SA / NV STM DIGITAL DENTISTRY STRAUMANN LLC Zaventem, Belgium HOLDING LIMITED Moscow, Russia EUR 2 081 620 Hong Kong RUB 21 000 000 USD 100

STRAUMANN BV 100% INSTRADENT LLC Ijsselstein, Netherlands ETKON DENTAL (SHENZEN) Moscow, Russia EUR 18 151 COMPANY LIMITED RUB 17 250 000 Shenzen, China USD 4 488 598 JJGC INDÚSTRIA E STRAUMANN SRO COMÉRCIO DE MATERIAIS Prague, Czech Republic DENTÁRIOS S. A .(NEODENT) CZK 200 000 Curitiba, Brazil BRL 1 107 621 860 At 31 December 2016 Values indicate share capital

INSTRADENT SRO Prague, Czech Republic CZK 100 000

Straumann Group – 2016 Annual Report 130 Corporate governance

The following distribution companies were established CROSS SHAREHOLDINGS in 2016: Manohay Chile SpA, Instradent Canada Ltd, Straumann does not have, and has not entered into, any Instradent LLC in Russia and Instradent Europe GmbH cross-shareholdings with other companies relating to in Germany. equity or voting rights.

Straumann Middle East was established as a distribu- CAPITAL STRUCTURE tion company in Iran early in 2017. In April 2016, 156 045 conditional shares were convert- ed into ordinary shares in two tranches, one before and On 1 January 2017, the Group re-gained full ownership one after the increase of the Group’s contingent share of the distribution company Instradent Deutschland capital that was approved by the Annual General Meeting GmbH by purchasing the 49% stake held by Medentika. (AGM) in 2016 to ensure the continuation of share-based At the same time, an agreement with the minority share- incentive plans and share-ownership programs for holders changed Straumann’s 51% stake in Medentika employees. GmbH into a controlling interest. As a result, Straumann has consolidated Medentika fully in its financial Apart from this and the conversion of 46 390 condition- statements as of 1 January 2017, although its stake re- al shares into ordinary shares in 2015, there have been mains unchanged. no changes in Straumann’s share capital in the past three years. On 31 December 2016, the share capital was com- PARTICIPATIONS IN OTHER COMPANIES posed of: The Group invested further in the value segment and – 15 878 984 registered shares, fully paid in, each with in its common technology platform (p. 25) in 2016, a nominal value of CHF 0.10 acquiring: – Conditional capital of CHF 28 395.50, divided into – A 30% stake in Anthogyr SAS of France, a manufac- 283 955 conditional shares, each with a nominal value turer of attractively priced implant solutions, offering of CHF 0.10. immediate access to the value segment in China; – Tangible and intangible assets from botiss in Ger- Straumann Holding AG did not have any authorized share many, providing Straumann with exclusive distribu- capital. tion rights for botiss products in Germany and strengthening the existing partnership between the The listed portion of the conditional share capital was two companies; approved for an unlimited period at an extraordinary – A 30% stake in V2R Biomedical, a small, privately- General Meeting in 1998. The unlisted portion of the owned company in Montreal specializing in prosthet- conditional share capital was approved for an unlimit- ically-driven guided-surgery solutions. ed period at the 2016 ordinary General Meeting. Both are for use in equity participation plans for em- The Group also exercised its conversion right and call ployees and management (see Compensation Report option to acquire a controlling stake in the South Korean for details). implant manufacturer MegaGen. The option was ob- tained in 2014, when Straumann purchased convertible Straumann has no other categories of shares than reg- bonds from MegaGen. The conversion is being deter- istered shares. There are no restrictions on the transfer- mined by arbitration under ICC rules. ability of Straumann Holding’s shares. Purchasers of shares are entered in the share register as shareholders In November 2016, Straumann announced a joint ven- with voting rights if they expressly declare that they ture with maxon motor that will develop and produce have acquired the registered shares in their own name ceramic implants made by injection moulding. Straumann and for their own account. If a purchaser is not willing obtained a 49% non-controlling stake in the joint ven- to make such a declaration, he / she is registered as a ture company, maxon dental GmbH in January 2017. shareholder without voting rights. Proof of acquisition of title in the shares is a prerequisite for entry in the share register.

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SHAREHOLDINGS ON 31 DECEMBER 2016 SHAREHOLDINGS ON 31 DECEMBER 2016 (BY SEGMENT) (BY GEOGRAPHY)

Major shareholders Switzerland (private) Europe 24.2% 24.2% Major shareholder 36.7% USA 60.7% (institutional) RoW Institutional Non-registered & shareholders undisclosed Private individuals Non-registered & 0.6% undisclosed 1.1% 8.9% 13.4%

17.4% 12.8%

Nominees approved by the Board of Directors are re- ENTRIES IN THE SHARE REGISTER corded in the share register as shareholders with voting Straumann’s share register, in which the names and ad- rights. Nominees who have not been approved by the dresses of owners and usufructuaries of registered shares Board of Directors may be refused recognition as share- are recorded, is maintained and administered on behalf holders if they do not disclose the benefciary. In such of the Company by Nimbus AG, Ziegelbrückstrasse 82, cases, the nominees will be recorded in the share 8866 Ziegelbrücke, Switzerland. register as shareholders without voting rights. At 31 De- cember 2016, no nominee had asked for registration and Only persons recorded in the share register as share- voting rights. holders or usufructuaries are acknowledged as such by the Company. The transfer of registered shares re- Straumann has not issued any fnancial instruments quires the authorization of the Board of Directors, (participation certifcates, dividend-right certifcates, which delegated this power to Nimbus AG. Autho- warrants, options or other securities granting rights to rizations will be granted after purchasers have provid- Straumann shares) other than the options/warrants and ed their name, nationality, and address and declared Performance Share Units granted to certain employees that the shares were acquired in their own name and as a component of compensation (see Compensation for their own account. report p. 157 ff.) and the CHF-200-million domestic straight bond launched in 2013 and due on 30 April 2020 Persons who have voting rights but no title to shares as (see Financial Report Note 13, p. F 39 f. for details). a consequence of legal provisions (e.g. legal represen- tatives of minors) will be referenced in the share regis- SHAREHOLDERS ter upon request. SIGNIFICANT SHAREHOLDERS In 2016, the Group reported two transactions accord- Registered shareholders must inform the company of ing to Art. 20 of the Federal Act on Stock Exchanges and any change of address. If they fail to do so, all notices Securities Trading (Stock Exchange Act, SESTA). One re- will be deemed to be legally valid if sent to the address fers to the sale of 1.4 million shares by GIC Private recorded in the share register. The Company may, after Limited, which reduced its stake from 14% to less than hearing the parties concerned, delete entries in the reg- 5%. The other refers to the purchase of approximately ister if these are based on false information. 530 000 of those shares by Straumann Holding. Details of the transactions are published on the SIX Swiss There are no statutory rules concerning deadlines for Exchange online reporting platform. entry in the share register. However, for organizational

Straumann Group – 2016 Annual Report 132 Corporate governance

SHAREHOLDERS BY VOLUME OF SHARES HELD

(absolute number) 31 Dec 2016 31 Dec 2015

1 – 100 shares 5 806 4 893 101 – 1000 2 413 2 219 1 001 – 10 000 291 249 10 001 – 100 000 66 56 100 001 – 1 000 000 11 8 1 000 001 and more 2 3 TOTAL 8 589 7 428

MAJOR SHAREHOLDERS (in %) 31 Dec 20161 31 Dec 2015

Dr h.c. Thomas Straumann (Vice Chairman of the Board) 17.1 17.3 Dr h.c. Rudolf Maag 12.1 12.2 BlackRock Group2 5.0 5.0 GIC Private Ltd2 4.4 13.6 Simone Maag de Moura Cunha 4.3 4.4 Straumann Holding AG 3.5 n/a Gabriella Straumann 3.2 3.3 TOTAL 49.6 55.8

1 Or at last reported date if shareholdings are not registered in the share register 2 Not registered in Straumann’s share register

CAPITAL STRUCTURE

(in CHF 1 000) 31 Dec 2016 31 Dec 2015

Equity 633 681 604 970 Reserves (263 360) (126 910) Retained earnings 897 041 731 880 Ordinary share capital (fully paid in) 1 588 1 572 Conditional share capital 28 28 Authorized share capital 0 0 Number of registered shares 15 878 984 15 722 939 Treasury shares (% of total) 3.5% <0.05% Nominal value per share (in CHF) 0.10 0.10 Registration restrictions None None Voting restrictions or privileges None None Opting-out, opting-up None None

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reasons, the share register is closed several days before Auditors can be dispensed with the unanimous resolu- the General Meeting. Participation and voting at the tion of all shares represented. 2017 General Meeting is reserved for shareholders reg- istered with voting rights in the share register on CONVOCATION OF GENERAL MEETINGS, 29 March 2017. Shareholders who sell their shares prior AGENDA PROPOSALS to the Meeting are no longer entitled to vote. The Shareholders’ General Meeting is convened by the Board of Directors within six months of the end of the SHAREHOLDERS’ PARTICIPATION RIGHTS business year. In 2017, the Shareholders’ General Meeting VOTING RIGHTS AND REPRESENTATION RESTRICTIONS will take place on 7 April at the Basel Congress Center. Each share duly entered in Straumann’s share register Shareholders individually or jointly representing at least as being held in the shareholder’s own name and for the 10% of the share capital may request an extraordinary shareholder’s own account entitles the shareholder to General Meeting. The request must be made to the Board one vote. On 31 December 2016, 76% of the issued cap- of Directors in writing, stating the agenda items and ital was registered in the share register. All shares have motions. the same entitlements to dividends. There are no pref- erential rights granted to any shareholders or shares. Invitations to the General Meeting are issued in writing and are delivered via ordinary mail to the address re- All shareholders may be represented at the General corded in the share register at least 20 days before the Meeting by a proxy. Proxies and directives issued to the date of the General Meeting and are published on the independent voting representative may either be given company’s website (www.straumann.com). If sharehold- in writing or online via the Nimbus Shareholder ers agree to the electronic delivery of notices, the invi- Application ShApp (https://shapp.ch). Other voting rep- tation will also be sent by email. resentatives must have a proxy signed by hand by the shareholder. The Board of Directors decides whether All agenda items and proposals by the Board of Directors proxies shall be recognized. and by shareholders who have requested the General Meeting must be announced in the notice convening The independent voting representative is elected by the the General Meeting. General Meeting for a term of office until the end of the next AGM and can be re-elected. In the case of a vacan- Shareholders who individually or jointly represent shares cy, the Board of Directors shall designate an indepen- with a par value of at least CHF 15 000 may request that dent voting representative for the next General Meeting. an item be included in the agenda. The request shall be in writing at least 45 days before the General Meeting QUORUMS and must set forth the agenda items and the proposals The General Meeting adopts its resolutions and holds of the shareholder(s). its ballots by a majority of votes cast. Abstentions and invalid ballots are not taken into account. The legal pro- visions (in particular section 704 of the Swiss Code of Obligations) that stipulate a different majority are re- served. Votes on resolutions and elections are held elec- tronically. In case of technical difficulties, the Chairman may order an open or written ballot. Likewise, the Chairman may repeat a ballot if he considers that the outcome is doubtful. In such a case, the preceding bal- lot is not considered.

The General Meeting may only approve the annual f- nancial statements and resolve on the appropriation of the balance sheet proft if the Auditors’ report is avail- able and the Auditors are present. The presence of the

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2016 GENERAL MEETING BOARD OF DIRECTORS The 2016 AGM took place on 8 April and was attended The Board of Directors of Straumann Holding AG com- by 362 shareholders, who together with proxies, repre- prised seven non-executive members until May 2016 sented 80% of the total share capital. Shareholders were and six thereafter. No Director has been a member of also able to provide voting instructions online to the in- the company’s Executive Management during the past dependent proxy. three years. The Directors are all Swiss citizens. The average age of the Members of the Board at year-end The meeting approved the Management Report, Financial was 57.5. Statements and Consolidated Financial Statements for the 2015 business year, the appropriation of the avail- ELECTIONS AND TERM OF OFFICE able earnings in 2015, and the discharge of the Board of The members of the Board of Directors, the Chairman Directors for the 2015 business year. The meeting also of the Board and the members of the Compensation approved the compensation of the Board of Directors Committee (which shall at least be 3) are all elected in- and the Executive Management (see pp. 170 f., 173 of dividually by the Shareholders’ General Meeting for a the Compensation Report) and – in a consultative term of one year. Re-election is permitted until the age vote – the Compensation Report. It also approved an in- of 70. crease of the contingent share capital to CHF 44 000 and an increase in the number of mandates that members If the position of Chairman of the Board or a position in of the Executive Committee may have in listed compa- the Compensation Committee falls vacant, the Board nies outside the Straumann group to two, both with the of Directors appoints a replacement from among its corresponding amendment of the Articles of Association. own members for the remaining term of office.

The Chairman, Members of the Board, and Members of At the AGM in April 2016, Gilbert Achermann, Dr h.c. the Compensation Committee were all re-elected. Thomas Straumann, Dr Sebastian Burckhardt, Roland Neovius Schlager & Partner was appointed as the Hess, Ulrich Looser, Dr Beat Lüthi and Stefan Meister independent voting representative and Ernst & Young were all re-elected to the Board for a further one-year AG as auditors. term. Gilbert Achermann was elected as Chairman of the Board; Stefan Meister, Beat Lüthi and Ulrich Looser The minutes of the meeting (including the voting re- were re-elected to the Compensation Committee. The sults) are published in the Investors section of the com- Board appointed Dr h.c. Thomas Straumann as its Vice pany's website (www.straumann.com > Investors > Chairman and Roland Hess, Sebastian Burckhardt and Corporate Governance > Annual General Meeting). Ulrich Looser as members of the Audit Committee.

On 23 May 2016, Stefan Meister stepped down from the Board because of a family illness. He had served on the Board for six years and was released from his re- sponsibilities both as a Board Member and as Chairman of the Compensation Committee. In accordance with Article 3.2.6 of the Articles of Association, Ulrich Looser was appointed Chairman of the Compensation Committee and Dr h.c. Thomas Straumann as the third member of the Committee alongside Dr Beat Lüthi until the 2017 AGM.

Thus, from May 2016 to the publication of this report, the Board comprised:

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GILBERT ACHERMANN DR H.C. THOMAS STRAUMANN Swiss (born 1964) Swiss (born 1963) Chairman of the Board since 2010 Vice Chairman of the Board Board Member since 2009 Board Member since 1990

In addition to his role as Chairman of Straumann, Gilbert Thomas Straumann’s skills in precision engineering were Achermann's activities in 2016 included serving on the complemented by his studies at the Basel Management Board of Directors of the private bank Julius Baer Group School and the Management and Commercial School and as an Executive-in-Residence at the IMD Business of Baselland. In 1990, he was responsible for restruc- School in Lausanne. He is also a Business Angel of sever- turing Institut Straumann AG and was both CEO and al start-up companies. Chairman of the Board of Directors until 1994. He con- tinued as Chairman of the Board until 2002. In 2004, he In previous years, he served as Chairman and Co-CEO of was awarded an honorary doctorate by the University the Vitra / Vitrashop Group, a family-owned furniture of Basel, Switzerland. and retail company, Chairman of the Siegfried Group, a listed pharma service company, and Vice Chairman of Further examples of Dr Straumann’s success as an entre- the Moser Group, a privately-owned luxury watchmak- preneur and businessman are the orthopedic / medical ing company. From 2002 to 2010, he was CEO of device company Medartis AG – of which he is the found- Straumann, which he joined as CFO in 1998. er, joint owner and Chairman, the Grand Hotel Les Tros Rois, Basel – of which he is the owner and Chairman, and Gilbert Achermann started his professional life at UBS in CSI-Basel AG – the equestrian event company, over which Investment Banking in 1988, working in Switzerland, New he presides as Chairman. He also has a diverse portfolio York, London and Frankfurt. He holds an Executive MBA of interests, including not-for-proft activities. from IMD and a bachelor’s degree from the University of St. Gallen. Thomas Straumann is the principal shareholder of Straumann Holding AG and is the longest-serving mem- Gilbert Achermann represents continuity, stability and ber of the Board. He complements the Board with his credibility among the various stakeholders. The Board understanding of the dental and medical device indus- benefts from his extensive knowledge of the dental in- tries through personal management experience and var- dustry, the extensive experience and insight gained from ious shareholdings. directorships in other industries.

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DR SEBASTIAN BURCKHARDT ROLAND HESS Swiss (born 1954) Swiss (born 1951) Member of the Audit Committee Chairman of the Audit Committee Secretary of the Board Board Member since 2010 Board Member since 2002

Sebastian Burckhardt began his studies in the felds of From 2008 until 2012, Roland Hess served as senior ad- economics and law and obtained his doctorate law de- visor to the Executive Committee of the Board of gree at the University of Basel. He is a lawyer admitted Schindler Holding AG, Ebikon, and held positions on sev- to the Bar of Switzerland and a civil law notary in Basel. eral Boards of Directors for companies within the He was admitted to the New York Bar following stud- Schindler Group. He joined Schindler in 1984 and rose ies at New York University School of Law. He is a part- through positions of increasing responsibility in control- ner at Vischer AG, a law frm in Basel. ling, fnance and regional management to become President of the Elevator and Escalator Division. From Straumann’s Board of Directors benefts from Dr 1971 to 1984, he worked for Nestlé, initially in account- Burckhardt’s expertise as an independent lawyer. He is ing, then as an international auditor, and fnally as Chief a specialist in corporate and commercial law and in Financial Officer of a Group company. mergers, acquisitions, joint ventures, licensing, distri- bution and technology agreements. His knowledge ex- His career includes several years in North and Latin tends well beyond legal matters and includes many America, in addition to assignments in Europe. He holds years’ experience on corporate boards. a degree in business administration from Lucerne Business School and studied at Harvard Business School near Boston.

He has a long and distinguished track record in larger companies in more mature industries, combined with in-depth regional and functional experience. In addi- tion, he complements the Board with expertise in compliance, risk management and standardized glob- al procedures.

Roland Hess has decided not to stand for re-election at the 2017 AGM.

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ULRICH LOOSER DR BEAT LÜTHI Swiss (born 1957) Swiss (born 1962) Chairman of the Compensation Committee, Member of the Compensation Committee Member of the Audit Committee Board Member since 2010 Board Member since 2010

Ulrich Looser is a partner of BLR & Partners AG. From Beat Lüthi is CEO and co-owner of CTC Analytics AG, 2001 to 2009, he was with Accenture Ltd, where he be- Zwingen, a globally active medium-sized Swiss compa- came Chairman of its Swiss affiliate (2005) and Managing ny in the feld of chromatography automation. After ob- Director of the Products Business in Austria, Switzerland taining his PhD in Engineering from the Swiss Federal and Germany. Earlier, he spent six years as a partner at Institute of Technology (ETH), Zurich, he began his ca- McKinsey & Company Ltd. Ulrich Looser graduated reer with Zellweger Uster AG, a leading manufacturer in physics at the Swiss Federal Institute of Technol- of quality control equipment in textile production. ogy (ETH), Zurich, and in economics at the University of St. Gallen. In 1990, he moved to Mettler-Toledo International Inc and rose to the position of General Manager of the Swiss His expertise in strategy, project and human capital affiliate. In 1994, he completed an executive program management is of great value to the Straumann Board. at INSEAD and subsequently joined the Feintool Group He also adds in-depth consultancy and business devel- in 1998. During his four-year tenure as CEO, the compa- opment experience. ny went public and doubled in size. In 2003, he returned to Mettler-Toledo as CEO of the Laboratory Division. At the end of 2007, he joined CTC Analytics to lead and fur- ther develop the company as an entrepreneur.

Beat Lüthi combines entrepreneurship and corporate experience in different industries, which make him a valuable contributor to strategic and operational mat- ters. His scientifc background together with his expe- rience as acting CEO, Chairman and Board member in various industrial businesses are of further beneft to the Straumann Board.

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STRAUMANN BOARD OF DIRECTORS – MATERIAL MEMBERSHIPS IN OTHER BOARDS

Member Commercial enterprise Charity / other Location Function

Gilbert Achermann IMD – International Institute for CH Executive-in-Resi- Management Development dence (2016 – 2017) Julius Bär Gruppe AG / Bank Julius Bär & CH Board member Co. AG Handelskammer beider Basel CH Board member International Team CH Board member for Implantology (ITI) Thomas Straumann Centervision AG CH Chairman CSI-BHE AG CH Chairman Grand Hotel Les Trois Rois CH Board member Medartis Holding AG & CH Chairman Medartis group companies FDR Foundation for Dental CH Board member Research and Education International Bone CH Board member Research Association Sebastian Burckhardt Amsler Tex AG CH Board member Applied Chemicals International AG & CH Board member ACI Group companies Dolder AG CH Chairman Le Grand Bellevue SA CH Board member Grether AG CH Board member Immobiliengesellschaft zum Rheinfels AG CH Chairman persona service AG & CH Board member persona service GmbH Schweiz Qgel SA CH Board member Fondation Bénina CH Member, Board of trustees Gehörlosen- und Sprachheilschule CH Vice Chairman, Riehen / GSR Wieland Stiftung / Board of trustees Stiftung Autismuszentrum Misrock-Stiftung CH Member of the Board of trustees

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Member Commercial enterprise Charity/other Location Function

Roland Hess Societé Civile Immobilière Solivie F Board member Ulrich Looser Bachofen Holding AG CH Chairman BLR & Partners AG & CH Chairman BLR group companies Econis AG CH Chairman Kardex AG CH Board member LEM Holding SA CH Board member Spross Entsorgungs Holding AG CH Board member Economiesuisse CH Board member Schweizerische Studienstiftung CH Board member Swiss-American Chamber of Com- CH Panel member merce: ‘Doing Business in the US’ Swiss National Fund CH Board member University Hospital Balgrist, Zürich CH Board member University of Zürich CH Board member Beat Lüthi APACO AG CH Board member CTC Analytics AG CH CEO & Board member INFICON Holding AG CH Chairman Swiss-American Chamber of Com- CH Panel member merce: ‘Doing Business in the US’ Industrieverband Laufen- CH Board member Thierstein-Dorneck-Birseck Stiftung Behindertenwerk CH Board member St. Jakob

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Board of Directors

GILBERT ACHERMANN CHAIRMAN Swiss, 1964 Board member since 2009

DR H.C. THOMAS STRAUMANN VICE CHAIRMAN Swiss, 1963 Board member since 1990

AUDIT COMMITTEE COMPENSATION COMMITTEE

DR SEBASTIAN BURCKHARDT Swiss, 1954 Board member since 2002

ROLAND HESS Swiss, 1951 Board member since 2010 Chair

ULRICH LOOSER Swiss, 1957 Board member since 2010 Chair

DR BEAT LÜTHI Swiss, 1962 Board member since 2010

Member

Straumann Group– 2016 –Annual 2016 Annual Report Report Corporate governance Corporate governance 141

TIME (DAYS) SPENT BY DIRECTORS AT BOARD/COMMITTEE MEETINGS AND ON COMPANY RELATED MATTERS

2016 MEETINGS G. Achermann T. Straumann S. Burckhardt R. Hess U. Looser B. Lüthi S. Meister

Board1 7 6 7 7 7 6 2 Audit Committee 5 n / a 5 5 5 4 n / a Compensation Committee 6 5 n / a n / a 6 6 2 Other2 67 21 12 12 12 12 n / a TOTAL DAYS 2016 85 32 24 24 30 28 4

1 incl. 1 telephone conference 2 Meeting preparation, travel

OTHER ACTIVITIES AND VESTED INTEREST Mandates in several legal entities under common con- None of the Directors had any signifcant business con- trol or under the same economic authority shall be nections with Straumann Holding AG or any of its sub- deemed as one mandate. sidiaries in 2016. OPERATING PRINCIPLES OF THE BOARD Unless stated in their CVs or in the table “Material OF DIRECTORS Memberships” (p. 138 f.), none of the Directors: The Board of Directors meets for one-day meetings at – Performed any activities in governing or supervisory least four times a year and as often as business requires. bodies of signifcant foreign or domestic organiza- In 2016, the full Board held seven meetings including tions, institutions or foundations under private or one telephone conference, while the Audit Committee public law met fve times and the Compensation Committee six – Held any permanent management or consultancy times (see the table above for details). position for signifcant domestic or foreign interest groups The CEO and CFO generally participate in Board meet- – Held any official function or political post. ings and are occasionally supported by other EMB mem- bers. Dr Andreas Meier, General Counsel of the Group, PERMITTED MANDATES OUTSIDE STRAUMANN is responsible for the minutes. (PURSUENT TO ART. 12 OAEC) Art. 4.4 of Straumann’s Articles of Association states that The Board of Directors consults external experts on spe- no member of the Board of Directors may perform more cifc topics where necessary. than 15 additional mandates (i.e. mandates in the high- est-level governing body of a legal entity required to be The Board of Directors is responsible for the strategic registered in the Commercial Register or in a correspond- management of the company, the supervision of the ing foreign register) in commercial enterprises, of which EMB and the fnancial control. It reviews the company’s no more than fve may be in listed companies. objectives and identifes opportunities and risks. In ad- The following are exempt from the foregoing dition, it decides on the appointment and/or dismissal restrictions: of members of the EMB. – Mandates in enterprises that are controlled by the Company The Board of Directors also provides a mentoring ser- – Mandates in enterprises that are performed at the vice to the Executive Management. This aims to provide instruction of the Company executives with an experienced sparring partner/coach – Mandates in associations, organizations and legal and a sounding board for testing ideas and seeking qual- entities with a public or charitable purpose, and in ifed independent opinions. foundations, trusts, and employee pension funds; no member of the Board of Directors may perform more than ten such mandates.

Straumann Group – 2016 Annual Report 142 Corporate governance

The Board of Directors has the following specifc tasks AUDIT COMMITTEE and duties: Members: Roland Hess (Chair), Sebastian Burckhardt and – To approve the Group’s vision, behaviours and strategy Ulrich Looser – To determine the principal organization and process- The Committee’s main tasks are to: es of the Group – Assess the management of fnancial and other risks – To approve the Group’s strategic plan, fnancial medi- and the compliance with risk-related procedures and um-term plan and annual budget other relevant standards – To approve the semi-annual fnancial statements – Oversee the performance of the external auditors, – To approve the annual report, the Compensation Re- assess the fees paid, and assure their independence port and the annual fnancial statements and submit – Oversee the activities of the internal audit function these to the AGM – Review and discuss the fnancial statements with the – To prepare and approve the agenda of the AGM and CFO and with the external auditors and approve the to implement its resolutions quarterly statements for the frst and third quarter of – To appoint and dismiss the CEO and the members of each fnancial year the EMB – Review and assess processes and assumptions used – To decide on the proposal of the Compensation Com- for the fnancial planning and forecast cycles mittee regarding the compensation payable to Board – Review the funding, investing and management of members, the CEO and the EMB liquid assets and propose proft distribution to the – To supervise the EMB and approve Board of Directors. important transactions. COMPENSATION COMMITTEE The Board of Directors has a quorum if a majority of Members: Stefan Meister (Chair) until May 2016, Ulrich members is present. This does not apply to resolutions Looser (Chair as of May 2016), Dr Beat Lüthi, Dr. h.c. that require public notarization, which do not require a Thomas Straumann as of May 2016. quorum. Valid resolutions require a majority of the votes cast. In the event of a tie, the chairman of the meeting The Committee’s main tasks are to: has the decisive vote. – Prepare the compensation report and submit it to the Board of Directors for approval and submission COMMITTEES OF THE BOARD OF DIRECTORS to the AGM The Board of Directors has an Audit Committee and a – Review the compensation principles for any compensa- Compensation Committee, each consisting of no fewer tion paid to the Board of Directors, the CEO and the EMB than three Board members with relevant background and submit them to the Board of Directors for approval and experience. – Prepare proposals concerning the compensation of the Board of Directors, the CEO and the EMB and sub- The members of the Compensation Committee are elect- mit them to the Board of Directors for approval and ed by the General Meeting for a term of one year. In the submission to the AGM event of a vacancy in the Compensation Committee, the – Establish the targets and target amounts of the Board of Directors appoints the replacement from among short- and long-term performance-based compensa- its own members for the remaining term of office. The tion components and determine the amount payable members of the Audit Committee are appointed by the under the scheme Board of Directors. Both Committees constitute them- – Discuss the CEO’s proposals for appointments to the selves and appoint their chairman from among their EMB with the CEO and submit them to the Board of members. Directors for approval – Assess candidates for the CEO role and submit a pro- The Board of Directors may establish further commit- posal to the Board of Directors for approval tees or appoint individual members for specifc tasks. – Prepare agreements concerning payments to a new CEO or EMB member according to Article 4.3 in the Articles of Association and submit them to the Board of Directors for approval

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– Review the composition of the Board of Directors and opment of the Group to the Chief Executive Officer (CEO) make proposals in the context of a regular renewal, and the other members of the Executive Management taking into consideration the representation of major Board (EMB). For details on the specifc responsibilities shareholders, balanced skills, experience and diversity. see the operational structure on page 144.

ASSIGNMENT OF RESPONSIBILITIES TO THE The Board of Directors has not delegated any manage- EXECUTIVE MANAGEMENT BOARD ment tasks to companies or persons outside the Group. The Board of Directors has delegated responsibility for the operational management and sustainable devel-

FUTURE NOMINATIONS To identify potential successors for Stefan Meister and Roland Hess, the Board conducted a structured search in 2016 and will propose the following candidates for election by the shareholders at the next AGM on 7 April 2017:

MONIQUE BOURQUIN REGULA WALLIMANN Swiss (born 1966) Swiss (born 1967)

Monique Bourquin has a strong track record in general Regula Wallimann is an expert in multinational group management, fnance, marketing and distribution gained auditing, fnancial advisory and corporate governance, from her career in consulting and the consumer-goods having been with KPMG since 1993. As a Global Lead industry. Having worked with PWC, Rivella and Partner since 2003, she has been responsible for sev- Mövenpick, she joined Unilever in 2002. After four years eral global companies and has led audit teams spe- as a Country Manager, she became CFO for the GAS re- cializing in tax, IT, treasury, compliance, litigation, en- gion from 2012 to 2016. She also held board mandates vironmental matters, pensions, international account- in Promarca (the Swiss branded goods association) and ing and reporting, covering the US, China, LATAM and two Unilever pension funds. other regions.

She has served on the Board of Directors of Emmi, the She was a member of the strategic partners committee leading Swiss dairy group, since 2013 and is a member of KPMG Switzerland from 2012 to 2014. As of April 2017, of their Market and Audit Committees. She is also on Regula Wallimann will start a new career as an indepen- the Board of the Swiss marketing association GfM. She dent fnancial expert and board member. will broaden her career as a board member in 2017. A graduate of HSG, University of St. Gallen, Switzerland, Monique Bourquin graduated from the University of Regula Wallimann has studied at INSEAD and is a Certifed St. Gallen and lectures in the Executive MAS program of Public Accountant both in the US and Switzerland. the Swiss Federal Institute of Technology (ETH) in Zurich.

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Executive Management Board

CHIEF EXECUTIVE OFFICER

Marco Gadola Swiss (born 1963) EMB member since 2013

DISTRIBUTOR & EMERGING MARKETS EMEA CHIEF FINANCIAL OFFICER

Wolfgang Becker Dr Peter Hackel German (born 1966) Swiss (born 1969) EMB member since 2013 EMB member since 2014

SALES EUROPE CUSTOMER SOLUTIONS & EDUCATION

Jens Dexheimer Frank Hemm German (born 1966) Swiss (born 1970) EMB member since 2016 EMB member since 2012

SALES NORTH AMERICA RESEARCH, DEVELOPMENT & OPERATIONS

Guillaume Daniellot Dr Gerhard Bauer French (born 1970) German (born 1956) EMB member since 2013 EMB member since 2013

SALES LATIN AMERICA / CEO OF NEODENT INSTRADENT MANAGEMENT & STRATEGIC ALLIANCES Matthias Schupp German (born 1964) Petra Rumpf EMB member since 2016 German (born 1967) EMB member since 2015

SALES ASIA / PACIFIC

Dr Alexander Ochsner Swiss (born 1964) EMB member since 2012

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MARCO GADOLA DR PETER HACKEL Swiss (born 1963) Swiss (born 1969) Chief Executive Officer Chief Financial Officer

Marco Gadola has a strong executive track record in a Peter Hackel rejoined Straumann in 2014, after three broad range of global businesses. He rejoined Straumann years at Oerlikon Industrial Group, where he was CFO in 2013 as CEO, having previously served as Chief of the global segment Oerlikon Drive Systems. He frst Financial Officer and Executive Vice President Operations joined Straumann in 2004 in a project management from 2006 to 2008, when he left to pursue a career de- and business development role and rose to become velopment opportunity at Panalpina, a world leader in Head of Group Controlling and member of the Corporate supply chain management. Having started as Panalpina’s Management Group. Prior to Straumann, he spent three Chief Financial Officer, he became Regional CEO Asia / years at Geistlich Biomaterials, as Director of Marketing & Pacifc in 2012, with overall responsibility for the re- Sales Orthopaedics, and two years at McKinsey & Com- gional business. pany as a consultant.

Prior to his frst term at Straumann, he spent fve years Peter Hackel offers a valuable combination of fnancial at Hero, the Swiss-based international food group, where and business expertise together with an analytical sci- he was also CFO and responsible for IT and operations. entifc background. He obtained both his Master’s de- Previously, he spent nine years at the international con- gree and PhD in Biochemistry and Molecular Biology struction tool manufacturer Hilti, where he held a num- from the Swiss Federal Institute of Technology (ETH) in ber of senior commercial / sales and fnance-related Zurich and complemented his education with studies positions in various countries. Before that, he worked in Business Administration at the University of Hagen for Sandoz International Ltd, as Audit Manager, and for in Germany. Swiss Bank Corporation, Basel, in Corporate Finance.

Mr Gadola graduated from Basel University in business administration and economics. He also completed var- ious programs at the London School of Economics and at IMD in Lausanne.

Marco Gadola is Vice Chairman of the Board of Calida Group and heads its Audit Committee. He is also a mem- ber of the Board of MCH Group, Switzerland, and heads its Audit Committee, in addition to being a panel mem- ber of the Swiss-American Chamber of Commerce.

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DR GERHARD BAUER WOLFGANG BECKER German (born 1956) German (born 1966) Head Research, Development & Operations Head Distributor and Emerging Markets EMEA

Gerhard Bauer is a seasoned executive with a broad in- Wolfgang Becker holds a number of business school di- ternational background in global operations. He has spent plomas including that of the St. Gallen Management more than 30 years in the pharmaceutical and medical Center. device industry in various leadership positions. He began his professional career at Straumann in 1986 Prior to joining Straumann in 2010, Dr Bauer held man- and held a series of managerial positions of increasing agerial positions at Nextpharma, a specialist company responsibility in the company’s German subsidiary, be- in the biotech industry, and Bausch & Lomb, a global coming Head of Human Resources in 1991, Head of leader in eye-care products. From 1992 to 2008, his ca- Marketing in 2000, and General Manager of Straumann reer at Bausch & Lomb was distinguished by increasing Germany in 2001. He served on Straumann’s Executive responsibility and in 2006, he was appointed Head of Committee as Head of Sales Europe from 2005 to 2006. Global Operations & Engineering and member of the Since then, he has been responsible for Straumann’s Executive Team. From 1984 to 1992, he worked for Ciba business in Central and Eastern Europe, and headed the Vision, a subsidiary of Novartis. He began his career in Group’s distributor business from 2007 to 2008. production at GlaxoSmithKline in 1983. Wolfgang Becker rejoined the Group’s Executive Dr Bauer received his PhD from the Institute of Management Board as Head Sales Central Europe & Pharmaceutics at the Ludwig-Maximilians-University in Distributors EMEA in 2013. Munich, where he also obtained his MSc in Pharmaceutics. He also obtained an advanced degree in Pharmaceutical Technology from the Bavarian Chamber of Pharmacists.

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GUILLAUME DANIELLOT JENS DEXHEIMER French (born 1970) German (born 1966) Head Sales North America Head Sales Europe

Having obtained a Bachelor’s degree in Physics from Jens Dexheimer is responsible for Straumann’s European the University of Dijon and a Masters in Marketing from region, which includes Austria, Benelux, France, FGE in Tours, Guillaume Daniellot completed his stud- Germany, Iberia, Italy, Scandinavia, Switzerland and the ies with a Masters in Business Administration at the UK. In his previous positions, he successfully managed ESC European School of Management in Paris. the business in Germany, the Group’s largest European market, and Iberia. In 2016, he was made responsi- His professional career began in hospital product man- ble for the entire Western Europe region and joined agement – initially at Coloplast and then at B. Braun, as the EMB. an international business unit manager. He switched to the dental industry in 2001, joining Dentsply France, He moved to Straumann in 2010 from Wella / Procter & where he became Sales & Marketing Director. Gamble, which he joined in 1996 and where he rose through various international roles of increasing respon- Mr Daniellot joined Straumann in 2007 as Managing sibility from regional Human Resources management Director of Straumann France. Two years later, he trans- to country, divisional and regional leadership. He began ferred to Group Headquarters to become Head of Global his career in consumer goods industry with Benckiser Sales Digital Dentistry. Shortly afterwards he took over in Germany. responsibility for Straumann’s Prosthetic Laboratory Business Group, including global management of sales, Mr Dexheimer obtained a degree in Economics at the marketing, product development, training and educa- State Vocational Academy in Mannheim and a Masters’ tion. In both these roles he was a member of the Degree from Mainz University. He also completed an Corporate Management Group. He joined Straumann’s Executive Development Program at Kellogg University Executive Management Board as Head Sales Western in Chicago. Europe in 2013 and took on his current role at the out- set of 2016.

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FRANK HEMM DR ALEXANDER OCHSNER Swiss (born 1970) Swiss (born 1964) Head Customer Solutions & Education Head Sales APAC

Frank Hemm holds a Master’s degree in Economics from Alexander Ochsner is a seasoned executive with exten- the University of St. Gallen and a Master’s in Business sive international experience in the medical device in- Administration from Kellogg Graduate School of dustry, having spent more than a decade in senior Management in Chicago. His business career began in managerial roles at the top of the dental implant indus- management consulting with Andersen Consulting and try in regional leadership positions. McKinsey, focusing on business process re-engineering and strategic management consulting. Before moving to the dental industry, he held manageri- al positions in marketing / sales at Medtronic and Medela, He joined Straumann in 2004 and was initially responsi- where he gained experience of the medical device mar- ble for Corporate Business Development & Licensing. He ket in the Far East as Area Sales Manager & Executive was appointed Head of Sales, Western Europe in 2007 Director of the Japanese subsidiary. From 2002 to 2008, and became a member of the Corporate Management he worked for Zimmer Dental, where he was Vice President Group. A year later, he was given responsibility for the Europe & Asia / Pacifc and a member of the Divisional Asia / Pacifc Region as Head of Sales based in Singapore, Executive Team. where he established and built up Straumann’s region- al headquarters. In addition to leading the integration Alexander Ochsner joined Straumann in September and turnaround of the acquired distributors in Japan and 2012 from Nobel Biocare, where he was Senior Vice Korea, he also expanded Straumann’s presence in China. President & General Manager EMEA and member of the Executive Committee. In 2012, Mr Hemm was appointed to the Executive Management Board as Head of EMEA and LATAM, and Dr Ochsner gained his PhD at the Swiss Federal Institute he moved into his current role in 2013. of Technology (ETH) in Zurich, where he also attained an MSc in natural sciences. He has held his current po- sition since 2012.

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PETRA RUMPF MATTHIAS SCHUPP German (born 1967) German (born 1964) Head Instradent Management & Strategic Alliances Head Sales Latin America, CEO of Neodent

Petra Rumpf has a strong executive track record in the Matthias Schupp joined Straumann from Procter & dental implant industry and 20 years’ experience in Gamble in 2007 as Regional Manager, Western Europe. growth management, e-commerce, operational turn- In 2013, he was appointed Head of Sales for the LATAM around, strategy and mergers & acquisitions (M & A). region and joined the management of Neodent, of which he became CEO early in 2015. He joined Straumann’s She worked for Nobel Biocare from 2007 to 2014, where Executive Management Board at the beginning of 2016. she was Member of the Executive Committee and re- sponsible for Corporate Development and M&A, glob- Mr Schupp has a strong track record in country / region- al e-commerce, clinical training & education, and the al management in various industries. He began his ca- successful development of the distributor business. She reer in marketing and customer service with Merck also managed the successful initiation of the Foundation KGaA, the German pharmaceuticals, fne chemicals and for Oral Rehabilitation (FOR), a global foundation that diagnostics company, and rose through country man- is active in the area of science, education and humani- agement to the position of Regional Manager Latin ty. During her last three years with the company, Petra America and US. He moved to Wella in 2000 as Managing Rumpf was also responsible for AlphaBio Tec – which is Director of the business in Russia and became Managing active in more than 50 countries, guiding its successful Director Professional Care Portugal in 2004, following expansion into China and emerging markets. the acquisition of Wella by P & G.

Before joining Nobel Biocare, she spent 16 years at Having graduated at the German / Brasilian High School Capgemini Consulting, where she rose through various in Rio de Janeiro, he gained most of his training in managerial roles to become Vice President Strategy & Business Administration and Management on the job Transformation Consulting. Her work covered a spec- through managerial and professional development pro- trum of countries and industries with a focus on life sci- grams at Merck and P & G. He took on his current role at ences and high-tech. the outset of 2016.

Petra Rumpf holds an MBA from Clark University in Worcester (USA) and a BA in economics from the Trier University in Germany.

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EXECUTIVE MANAGEMENT BOARD PERMITTED MANDATES OUTSIDE STRAUMANN The CEO and, under his direction, the other EMB mem- (PURSUENT TO ART. 12 OAEC) bers are responsible for the Group’s overall business, af- As approved by the AGM in 2016, the maximum num- fairs and day-to-day management. The EMB is also ber of mandates in listed companies exercised by indi- responsible for implementation of strategic decisions vidual EMB members was increased from one to two, and stakeholder management. The CEO reports to the refecting the practice in more than 50% of SPI compa- Board regularly and whenever extraordinary circum- nies, according to a study published in 2015 by Ethos, stances so require. Each member of the EMB is appoint- the Swiss Foundation for Sustainable Development. ed and discharged by the Board of Directors. On 31 December 2016, the EMB comprised ten members under Art. 4.4 of Straumann’s Articles of Association thus states the leadership of, and including, the CEO, Marco Gadola. that no member of the EMB may perform more than fve mandates (i.e. mandates in the highest level gov- There were no changes to the EMB throughout 2016. On erning body of a legal entity required to be registered 1 January 2017, Straumann reorganized its subsidiaries in the Commercial Register or in a corresponding for- in Central and Western Europe into a single European eign register) in commercial enterprises, of which no region, led by Jens Dexheimer, and the other markets more than two may be in a listed company. The follow- into the ‘Distributor & Emerging Markets EMEA’ region, ing are exempt from the foregoing restrictions: led by Wolfgang Becker and including Africa, Central – Mandates in enterprises that control the Company or Asia, Eastern Europe, the Middle East and Russia. are controlled by the same – Mandates in enterprises that are performed at the OTHER ACTIVITIES AND VESTED INTEREST instruction of the Company Marco Gadola is Vice President of the Board of Directors – Mandates in associations, organizations, and legal of Calida Holding AG, Switzerland, and heads its Audit entities with a public or charitable purpose, and in Committee. He is also a member of the Board of Directors foundations, trusts, and employee pension funds. No of MCH Group, Switzerland, and heads its Audit member of the Executive Management may perform Committee. In addition, he is a panel member of the more than three such mandates. Swiss-American Chamber of Commerce. Mandates in several legal entities under common con- Marco Gadola was also a member of the Board of trol or under the same economic authority shall be Directors and Board of trustees of the independent ac- deemed as one mandate. ademic network International Team for Implantology (ITI) until early 2016, when he was succeeded by Frank MANAGEMENT CONTRACTS Hemm. Under a collaboration agreement, Straumann The Board of Directors and the EMB have not delegat- supports the ITI with payments (see Note 28 of the ed any managerial powers to persons or companies out- Audited Consolidated Financial Statements on p. F 54). side the Group.

Alexander Ochsner is an advisor of the Essence & DM INTERNAL MANAGEMENT DEVELOPMENT Dental Industry Investment Partnership, a private- Straumann continued the Strategic Management equity fund addressing the dental sector in China. Development System (SMD) program initiated in 2008 to develop and deploy key talent internally, in order to Other than these, no member of the EMB: build a strong succession pipeline. The goal is to fll at – Performed any activities in governing or supervisory least 50% of business-critical and key management po- bodies of signifcant foreign or domestic organiza- sitions with internal candidates. The scope was broad- tions, institutions or foundations under private or ened to include Strategic Management and their direct public law reports as well as other business-critical roles e.g. sales- – Held any permanent management or consultancy force, and the target was achieved again in 2016. function for signifcant domestic or foreign interest groups – Held any official function or political post.

Straumann Group – 2016 Annual Report Corporate governance Corporate governance 151

COMPENSATION, SHAREHOLDINGS The company’s approach is to ensure that internal con- AND LOANS trols are accurate, timely, robust, and receive appropri- The compensation and equity holdings as well as the ate management attention in each respect. To achieve basic principles and elements of the programs deter- this, dedicated control templates are used for each busi- mining them for the members of the Board of Directors ness process to address major risks. The templates are and the EMB and their related parties are disclosed in continuously improved. the Compensation Report on p. 170 f. and also in the au- dited fnancial statements in Note 4 on p. F 79 f. In addition, each entity (sales affiliate, production site or global function) has a designated, trained person or CHANGES OF CONTROL AND team that is ultimately accountable for the assessment DEFENSE MEASURES undertaken and the decisions arising from it. Clear The Articles of Association of Straumann Holding AG do benefts of the Internal Control System include en- not contain provisions for opting out or opting up. There hanced segregation of duties, increased control con- are no change-of-control clauses included in agreements sciousness and higher awareness of potential risks and and schemes benefting members of the Board of their consequences. Directors or the Executive Management Board or other management staff. The ICS program is coordinated by Corporate Internal Audit, which meets with the external auditors on a INFORMATION AND CONTROL MECHANISMS regular basis to discuss the status of internal control is- FOR THE BOARD OF DIRECTORS AND THE sues and the status of remediation of control defcien- EXECUTIVE MANAGEMENT BOARD cies. Internal controls are evaluated annually by the MANAGEMENT INFORMATION SYSTEM external auditors and by Internal Audit according to an The Group’s Management Information System encom- agreed program. passes management, business and fnancial reporting. The information is provided to the Executive Management INTERNAL AUDIT Board once a month and to the Board of Directors as a Corporate Internal Audit at Straumann is an indepen- monthly summary and in detail on a quarterly basis. dent and objective assurance and consulting body, re- porting directly to the CFO and to the Audit Committee Straumann operates a state-of-the-art SAP enterprise of the Board of Directors. resource planning system, which covers 90% of all busi- ness transactions of the Group's fully consolidated en- The main task of Corporate Internal Audit is to evaluate tities. With the exception of the Brazilian subsidiary, the effectiveness of the Group’s governance and risk Neodent, the system links all other major subsidiary management processes, to review and assess internal companies and production sites directly with Group controls, to monitor compliance with external and in- headquarters. This greatly reduces the potential for error ternal policies and procedures, and to ensure the eco- or fraud, and it enables the Executive and Senior nomical and efficient use of the company’s resources. Management to monitor local processes and related In this role, Corporate Internal Audit promotes the ex- fgures directly, in detail and in real time. Neodent is change of best practices within the Straumann Group, integrated in the Group’s reporting system but not yet proposes improvements, and monitors their implemen- in SAP. tation. In addition, Corporate Internal Audit pursues the development of the Group’s Internal Control System. INTERNAL CONTROL SYSTEM The Group’s Internal Control System (ICS) is a key in- In 2016, Corporate Internal Audit performed ten audits strument for designing business processes, measuring at global and local levels, according to the audit pro- progress towards fnancial goals and addressing poten- gram approved by the Audit Committee of the Board tial fnancial issues before they occur. It also sup- of Directors. ports the design of business processes in order to achieve the desired level of control in terms of efficien- cy and effectiveness.

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CORPORATE RISK MANAGEMENT publishes additional information on signifcant events. The Board of Directors is responsible for the overall su- The CEO, CFO, the Head of Investor Relations and the pervision of risk management and uses the Internal Audit Head of Corporate Communication & Public Affairs are function to this end. The Board has delegated the task responsible for communication with investors and rep- of risk management to the Chief Risk Officer (CRO), who resentatives of the fnancial community, media and is also the CFO. Through its Audit Committee, the Board other stakeholders. assesses and discusses risks on a regular basis in consul- tation with the CRO and / or the relevant members of In addition to personal contacts, discussions, and pre- senior management (see p. 90). sentations in Europe, North America, and Asia, Straumann held four quarterly fnancial results conferences for the EXTERNAL AUDITORS media and analysts in 2016, two of which were telecon- The Shareholders’ General Meeting elects and appoints ferences. The average participation at each event was the Group’s external auditors on an annual basis. In April more than 70 attendants on-site or remote by confer- 2016, Ernst & Young AG, Basel, was re-elected as audi- ence call. The conferences were transmitted live via tor of Straumann Holding AG for a third term of one year. audio webcast and / or traditional conference call. In ad- The auditor in charge is Daniel Zaugg, Swiss Certifed dition, Straumann’s CEO and CFO attended two sector- Public Accountant, who took over the mandate in 2014. specifc and four general equity conferences.

The Board of Directors supervises the external auditors For the frst time, the company organized ‘corporate gov- through the Audit Committee, which met fve times in ernance’ meetings with the Chairman and set-up ‘car- 2016. The external auditors participated in two of these bon free’ roadshows, where participants met in a virtual meetings, to discuss the scope, the audit plan and the video conference room in order to save travel and for auditors’ conclusion of the fnancial report. Details of environmental considerations. the instruments that assist the Board in obtaining in- formation on the activities of the external auditors can Research analysts from 19 banks / national institutions be found on p. 151. cover developments at the Straumann Group and are listed on p. 179 of this report as well as on the ‘Investors’ The worldwide fees paid to the auditors were as section of the Straumann corporate website. follows: Apart from this, Straumann frequently publishes media (in CHF 1 000) 31 Dec 2016 31 Dec 2015 releases, briefng documents, and videos, which are ar- Total audit fees 815 828 chived and available from the company’s website (www. Tax consultancy 0 0 straumann.com). The company offers a media release Legal 0 0 subscription service via its website and takes care to en- Transaction services 61 135 sure that investor-relevant media releases are circulat- Other services 25 0 ed broadly and in a timely manner according to the rules Total non-audit fees 86 135 of the SIX Swiss Exchange and with due regard for the TOTAL 901 963 principles of fair disclosure. The company does not up- date its releases, reports and presentations, which means that the information they contain is only valid at the INFORMATION POLICY time of publication. Straumann advises against relying Straumann is committed to a policy of open, transpar- on past publications for current information. ent and continuous information. In accordance with the rules of the SIX Swiss Exchange, Straumann pub- ANNUAL REPORT & COMPENSATION REPORT lishes detailed sales fgures on a quarterly basis as well Straumann’s Annual Report is a key instrument for com- as annual and half-yearly reports. Detailed information municating with various stakeholder groups. It is pub- is provided at the Shareholders’ General Meeting, and lished in English (with a summary in German) in hard the minutes are published on the company’s website. copy (with the Financial Report as a separate volume) Where necessary or appropriate, the Group also and electronically on the company’s website, where it

Straumann Group – 2016 Annual Report Corporate governance Corporate governance 153

can also be downloaded. The Compensation Report is issued as part of the Annual Report and can be down- loaded from the company’s website in the Investors sec- tion under www.straumann.com > Investors > Corporate Governance > Compensation.

Printed versions of the Compensation Report and full Annual Report can be ordered from: [email protected].

MEDIA USED FOR REPORTING PURPOSES The company’s website is www.straumann.com. The company’s journal of record is the ‘Schweizerisches Handelsamtsblatt’ (SHAB – Swiss Official Gazette of Commerce). Further information requests should be ad- dressed to:

Investor Relations: [email protected] Tel. +41 61 965 16 78

Corporate Communication: [email protected] Tel. +41 61 965 11 11

CALENDAR Straumann’s calendar of planned reporting dates and in- vestor relations events in 2017 can be found on p. 178 and also published and updated on the company’s website.

In 2016, Straumann’s 2015 Annual Report received a prestigious Swiss HarbourClub / BILANZ award for value reporting (third in class), outrank- ing some of the world’s largest companies. Our Annual Report has con- sistently featured among the Top-10 in the BILANZ / HarbourClub ratings for more than a decade.

Straumann Group – 2016 Annual Report