Group Structure and Shareholders Op Bo Ca I A C S Co nformation Policy nformation hareholders’ Participation Rights uditors hange of Control and Defense Measures Defense and of Control hange pital Structure pital ard of Directors ard mpensation, Shareholdings and Loans and Shareholdings mpensation, erations Council
GOVERNANCE CORPORATE
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103 102 102 102 101 90 99 92 91 88 2019 INTEGRATED ANNUAL REPORT OUR VALUE TO SOCIETY CORPORATE GOVERNANCE This Corporate Governance Report informs shareholders, prospective investors and the public at large on SGS policies in matters of corporate governance, such as the structure of the Group, shareholders’ rights, composition roles and duties of the Board of Directors and its Committees and Management, and internal controls and audits. This report has been prepared in compliance with the Swiss Exchange (SIX) Directive on Information Relating to Corporate Governance of 20 June 2019 and with the Swiss Code of Best Practice for Corporate Governance. The SGS Corporate Governance framework aims to achieve an efficient allocation of resources and clear mechanisms for setting strategies and targets, in order to maximize and protect shareholder value. SGS strives to attain this goal by defining clear and efficient decision-making processes, fostering a climate of performance and accountability among managers and employees alike and aligning employees’ remuneration with the long-term interests of shareholders.
1. GROUP STRUCTURE 3.6. Definition of areas 6. SHAREHOLDERS’ of responsibility 97 AND SHAREHOLDERS 90 3.7. Information and control PARTICIPATION RIGHTS 102 1.1. Group structure 90 instruments vis-à-vis 6.1. Voting rights and the management 98 1.1.1. Operational group representation restrictions 102 structure 90 6.1.2. Rules on instructions 1.1.2. Listed companies 4. OPERATIONS COUNCIL 99 to the independent in the Group 91 proxy and electronic 4.1. Members of the participation in the Annual 1.1.3. Non-listed companies Operations Council 99 Shareholders Meeting 102 in the Group 91 4.2. Other activities and 6.2. Statutory quorums 102 1.2. Significant shareholders 91 vested interests 101 6.3. Convocation of General 1.3. Cross-shareholdings 91 4.3. Changes in the Meetings of Shareholders 102 Operations Council 101 6.4. Inclusion of items on CORPORATE GOVERNANCE CORPORATE 2. CAPITAL STRUCTURE 91 4.4. Limits on external mandates 101 the Agenda 102 GOVERNANCE CORPORATE 4.5. Management contracts 101 6.5. Registration in 2.1. Issued share capital 91 the share register 102 2.2. Authorized and conditional 89 share capital 91 5. COMPENSATION, 2.3. Changes in capital 92 SHAREHOLDINGS 7. CHANGE OF 2.4. Shares and AND LOANS 101 CONTROL AND participation certificates 92 DEFENSE MEASURES 102 2.5. Dividend-right certificates 92 5.1. Content and method of determining the compensation 7.1. Duty to make an offer 102 2.6. Limitations on transferability and the shareholding programs 101 and admissibility of 7.2. Clauses on change of control 102 5.2. Rules on approbation by
nominee registrations 92 OUR VALUE TO SOCIETY the Annual Shareholders 2.7. Convertible bonds and Meeting of executive pay 101 warrants/options 92 8. AUDITORS 102 5.2.1. Rules on performance- related pay and 8.1. Duration of the mandate 3. BOARD OF allocation of equity- and term of office of the DIRECTORS 92 linked instruments 101 Lead Auditor 102 5.2.2. Rules on loans, credit 8.2. Audit fees 102 3.1. Members of the facilities and post- 8.3. Additional fees 102 Board of Directors 92 employment benefits 101 8.4. Information instruments 3.2. Other activities 95 5.2.3. Rules on vote on pay 101 pertaining to the external audit 102 3.3. Limits on external mandates 95 3.4. Elections and terms of office 95 9. INFORMATION 2019 INTEGRATED ANNUAL REPORT 2019 INTEGRATED ANNUAL REPORT OUR VALUE TO SOCIETY 3.5. Internal organizational structure 95 POLICY 103 3.5.1. Allocation of tasks within the Board of Directors 95 3.5.2. Members list, tasks and area of responsibility for each Committee of the Board of Directors 96 3.5.3. Working methods of the Board and its Committees 97 1. GROUP STRUCTURE which provides independent inspection, The operations of the Group are divided verification, testing, certification and into seven regions, each led by a Chief AND SHAREHOLDERS quality assurance services. Operating Officer who is responsible 1.1. GROUP STRUCTURE The shares of SGS SA are listed on for the SGS businesses in that region and for the local implementation of 1.1.1. OPERATIONAL GROUP STRUCTURE the SIX Swiss Exchange and are traded on SIX Europe (Swiss Security Number: Group policies and strategies. SGS SA, registered in Geneva (CH), 249745; ISIN: CH0002497458). On At 31 December 2019, geographic also referred to as the “Company”, 31 December 2019, market capitalization operations were organized as follows: controls directly or indirectly all entities was approximately CHF 20 057 million worldwide belonging to the SGS Group, (2018: CHF 16 871 million). CORPORATE GOVERNANCE CORPORATE
90 OUR VALUE TO SOCIETY
AMERICAS EUROPE, AFRICA, MIDDLE EAST ASIA PACIFIC • North America • Western Europe and Africa • North East Asia • South and Central America • North and Central Europe • South East Asia Pacific • Eastern Europe and Middle East 2019 INTEGRATED ANNUAL REPORT The Group is also structured into nine • Agriculture, Food and Life Each line of business is led by an lines of business. Each business line is • Minerals Executive Vice President. Chief responsible for the global development Operating Officers and Executive • Oil, Gas and Chemicals of Group activities within its own sphere Vice Presidents are members of of specialization and the execution of • Consumer and Retail the Operations Council, the Group’s strategies with the support of the • Certification and most senior management body. Chief Operating Officers. Business Enhancement At 31 December 2019, the business • Industrial 1. On 1 January 2020, all Transportation lines are organized as follows: • Environmental, Health and Safety activities were allocated and integrated across multiple business lines to generate • Transportation1 operational synergies and reinvigorate their growth profiles. • Governments and Institutions
< BACK TO CONTENTS 1.1.2. LISTED COMPANIES IN THE GROUP the registered office or principal place acquisitions and disposals made by the None of the companies under the direct of business. The disclosure of legal SGS Group during 2019 are provided or indirect control of SGS SA have entities is limited to entities whose in note 3 of the consolidated financial listed shares or other securities on contribution to the Group revenues statements included in the section SGS any stock exchange. in 2019 represent at least 1% of the Group Results on pages 144–145 of this consolidated revenues, but includes, in Annual Report. 1.1.3. NON-LISTED COMPANIES addition, the main operating legal entity IN THE GROUP in every country where the Group has 1.2. SIGNIFICANT SHAREHOLDERS The material legal entities consolidated permanent operations, even when such To the knowledge of the Company the within the Group are listed on pages legal entities represent less than 1% shareholders owning more than 3% 197–200 of the Annual Report, of the Group consolidated revenues. of its share capital as at 31 December with details of the share capital, This definition of materiality excludes 2019, or as the date of their last the percentage of shares controlled dormant companies, pure sub-holding notification as per Article 20 of the directly or indirectly by SGS SA and companies or entities used solely for Swiss Stock Exchange Act were: the detention of assets. Details of
(% of detention) 2019 2018
Groupe Bruxelles Lambert (acting through Serena SARL and URDAC)1 16.73% 16.60% Mr. August von Finck and members of his family (acting in concert)2 15.66% 15.52% BlackRock, Inc. 4.00% 4.00% MFS Investment Management 3.81% 3.02%
1. The ultimate beneficial owners of the Groupe Bruxelles Lambert are Stichting Administratekantoor Frère-Bourgeois, Paul Desmarais Junior and André Desmarais. 2. The Company was informed on 4 February 2020, that the von Finck family has disposed of a large portion of their holding, resulting in their participation falling below the threshold of 3% of the share capital and voting rights. CORPORATE GOVERNANCE CORPORATE GOVERNANCE CORPORATE
90 As at December 31, 2019, the SGS In 2019, 1 683 treasury shares were sold The shareholders have conditionally 91 Group held 0.18% of the share capital to cover the equity compensation plans approved an increase of share capital of the company (2018: 1.09%). and no shares were purchased . by an amount of CHF 1 100 000 divided During 2019, the Company has On February 4, 2019, the Group initiated into 1 100 000 registered shares with a published regularly on the electronic a share buyback program which ended par value of CHF 1 each. This conditional platform of the Disclosure Office of the on 19 December 2019. SGS SA did not share capital increase is intended to obtain the shares necessary to meet the SIX Swiss Exchange Ltd. all disclosure repurchase shares during the buyback Company’s obligations with respect to notifications received from shareholders program, neither on the ordinary employee share option plans and option of transactions subject to the disclosure trading line, nor on the second trading or conversion rights of convertible bonds OUR VALUE TO SOCIETY obligations of Article 20 SESTA. line for cancellation. OUR VALUE TO SOCIETY or similar equity-linked instruments 1.3. CROSS-SHAREHOLDINGS 2.2. AUTHORIZED AND CONDITIONAL that the Board is authorized to issue. SHARE CAPITAL If increased by the maximum amount of Neither SGS SA nor its direct and the conditional share capital, the existing The Board of Directors has the authority indirect subsidiaries have any cross- share capital of 7 565 732 shares would to increase the share capital of the shareholding in any other entity, increase by approximately 14.5% to Company by a maximum of 500 000 whether publicly traded or privately held. 8 665 732 shares. The conditional capital registered shares with a par value of is not limited in time. CHF 1 each, corresponding to a maximum increase of CHF 500 000 The right to subscribe to such conditional in share capital. If increased by the capital is reserved to beneficiaries of maximum amount of the authorized employee share option plans and holders 2. CAPITAL STRUCTURE share capital, the existing share capital of convertible bonds or similar debt 2.1. ISSUED SHARE CAPITAL of 7 565 732 shares would grow by instruments and therefore excludes
2019 INTEGRATED ANNUAL REPORT shareholders’ preferential rights of 2019 INTEGRATED ANNUAL REPORT The share capital of SGS SA is 7 565 732 approximately 6.6% to 8 065 732 shares. subscription. The Board is authorized to as of 31 December 2019 and comprises The Board is authorized to issue the new shares at the market conditions prevailing determine the timing and conditions of 7 565 732 fully paid-in registered shares at the time of issue. In the event that the such issues, provided that they reflect of a par value of CHF 1. On 31 December new shares are issued for the purpose prevailing market conditions. 2019, SGS SA held 13 342 treasury of an acquisition, the Board is authorized The term of exercise of the options shares (2018: 83 025). The shares to waive the shareholders’ preferential or conversion rights may not exceed related to the share buyback program right of subscription or to allocate ten years from the date of issuance are directly held by SGS SA, the shares such subscription rights to third parties. of the equity-linked instruments. to cover the equity compensation plan The authority delegated by the are held by a subsidiary company. shareholders to the Board of Directors to increase the share capital is valid until 22 March 2021.
< BACK TO CONTENTS 2.3. CHANGES IN CAPITAL previously granted to members of the Corporate Governance reports of prior The share capital of the Company was Operations Council, to senior managers years, including pages 79-81 of the 2018 reduced twice in the last years, once in and selected key employees have been Integrated Annual Report. 2017 and once in 2019 to cancel shares discontinued by the Company in 2015 The members of the Board of Directors purchased by application of share buy- and the last outstanding options under at 31 December 2019 were as follows: this legacy stock option plan will expire, back programs initiated by the Company: if not exercised, in 2020. At the Company’s Annual General Meeting in 2019, the Shareholders Details of all options outstanding are PETER KALANTZIS (1945) provided in note 28 of the consolidated approved a reduction of the share Swiss/Greek capital, by cancellation of 68 000 shares financial statements of the Group which were purchased as part of (Annual Report pages 170–172). FUNCTION IN SGS a share buyback program completed in December 2018. Consequently, Member: the share capital of the Company • Chairman of the Board of Directors was reduced from CHF 7 633 732 to 7 565 732 in 2019. 3. BOARD OF DIRECTORS INITIAL APPOINTMENT TO THE BOARD Previously, in 2017, the share capital The Board of Directors is the highest March 2009 was reduced from CHF 7 822 436 to governing body within the Group. It is the CHF 7 633 732 by cancellation of 188 704 ultimate decision-making authority except PROFESSIONAL BACKGROUND shares purchased by the Company. for those decisions reserved by law to Peter Kalantzis holds a Ph.D. in No other changes in the share capital of the General Meeting of Shareholders. Economics and Political Sciences from the Company were made in the course the University of Basel and engaged in of the last three years. 3.1. MEMBERS OF THE BOARD research as a member of the Institute OF DIRECTORS for Applied Economics Research at the 2.4. SHARES AND This section presents the Members of PARTICIPATION CERTIFICATES University of Basel between 1969 and the Board of Directors of the Company 1971. Prior to 2000, Peter Kalantzis All shares, other than treasury shares with their functions in the Group, their was responsible for Alusuisse-Lonza held by SGS SA, have equal rights to the professional backgrounds and all their Group’s corporate development and dividends declared by the Company and material positions held outside the actively involved in the de-merger and CORPORATE GOVERNANCE CORPORATE have equal voting rights. The Company Group in governing and supervisory stock market launch of Lonza, as well has not issued any participation boards, management positions and as the merger process of Alusuisse and certificates (bons de participation/ consultancy functions, official tenures Alcan. Dr. Kalantzis served as head of the Partizipationsscheine). and political commitments, both in Chemicals Division of Alusuisse-Lonza 92 Switzerland and abroad. Group from 1991 until 1996. In 1991, 2.5. DIVIDEND-RIGHT CERTIFICATES By delegation of the Board, the Dr. Kalantzis was appointed Executive The Company has not issued any Nomination and Remuneration Vice President and Member of the dividend-right certificates. Committee has set out criteria for Executive Committee of the Alusuisse- the selection of new Directors and Lonza Group. Dr. Kalantzis has worked 2.6. LIMITATIONS ON has conducted a search which has as an independent consultant since 2000. TRANSFERABILITY AND ADMISSIBILITY resulted in changes to the composition OF NOMINEE REGISTRATIONS of the Board of Directors in 2019. OTHER ACTIVITIES AND FUNCTIONS SGS SA does not limit the transferability The aim of this exercise is to ensure Clair AG, Cham (CH), Chairman of of its shares. The registration of shares that the Board is continuously in a OUR VALUE TO SOCIETY the Board since 2004 held by nominees is not permitted by position to provide leadership, strategic the Company’s Articles of Association, oversight and guidance and contribute Degussa Sonne/Mond Goldhandel AG, except by special resolution of the to setting ambitious targets for the Cham (CH), Chairman of the Board Board of Directors. By decision of the Group and meeting long-term value since 2012 Board, the Company’s shares can be creation objectives. Consolidated Lamda Holdings Ltd., registered in the name of a nominee The competencies sought by the Luxembourg (LU), Member of the Board acting in a fiduciary capacity for an Group for its Board of Directors since 2002 undisclosed principal, provided however include, experience of senior executive Paneuropean Oil and Industrial Holdings that shares registered in the names leadership in international businesses, SA, Luxembourg (LU), Member of the of nominees or fiduciaries may not strategic planning, finance, technology Board since 2001 exercise voting rights above a limit of and innovation. When selecting *Von Roll Holding AG, Breitenbach 5% of the aggregate share capital of candidates for the Board of Directors, (CH), Chairman of the Board since 2010, the Company. This rule was made public the Company pays due regard to Member of the Board since 2007 on 23 March 2005. The Company has a experience, professional qualifications, 2019 INTEGRATED ANNUAL REPORT Hardstone Services SA, Geneva (CH), single class of shares and no preferential areas of expertize, age, gender, national Chairman of the Board since 2014, background and leadership style, rights, statutory or otherwise, have been Member since 2009 granted to any shareholder. so that at all times, the Board and its Committees have the required skills. Gnosis Foundation, Vaduz (FL), President of the Foundation Board since 2008 2.7. CONVERTIBLE BONDS AND At the Annual Shareholders Meeting WARRANTS/OPTIONS of March 2019, Luitpold von Finck, John S. Latsis Public Benefit No convertible bonds have been issued Calvin Grieder and Kory Sorenson were Foundation, Vaduz (FL), President of by the Company or by any entity under appointed to the Board of Directors. the Executive Board since 2015 its direct or indirect control. In 2019, August von Finck and Christopher Kirk no options or similar instruments have did not stand for re-election. Biographical been issued by the Company or by any of information on former members of the the Group’s subsidiaries. Options plans Board of Directors is available in the
* Listed company. < BACK TO CONTENTS PAUL DESMARAIS, JR (1954) *Pargesa Holding SA, Geneva (CH), From 2000 onwards, Mr. von Finck Canadian Board Member since 1992, focused his activities on the Mövenpick Chairman of the Board since 2013 Group in Switzerland and its diversified international operations, and became FUNCTION IN SGS *LafargeHolcim Ltd, Zurich (CH), Member of the Board since 2015 the owner of the company in 2005. Member: Member of the Advisory Council • Board of Directors OTHER ACTIVITIES AND FUNCTIONS the European Institute of Business Administration (INSEAD) Mövenpick Holding Ltd, Baar (CH) INITIAL APPOINTMENT TO THE BOARD and its major subsidiaries, Trustee of the Brookings Institution and July 2013 Chairman of the Board of Directors a Co-Chair of the Brookings International Advisory Council (USA) Clair Ltd, Cham (CH), Member of the Board PROFESSIONAL BACKGROUND Past Chairman and a Member of the Custodia Holding, Munich (DE), Chairman and Co-Chief Executive Business Council of Canada (CAN) Member of the Board Officer, *Power Corporation of Canada. Paul Desmarais, Jr. has a Bachelor of Commerce Degree from McGill AUGUST FRANÇOIS VON FINCK (1968) IAN GALLIENNE (1971) University, Montréal and an MBA from Swiss French-Belgian the Institut Européen d’Administration des Affaires (INSEAD), France. FUNCTION IN SGS FUNCTION IN SGS He has received honorary doctorates Member: Member: from various Canadian universities. • Board of Directors • Board of Directors He joined Power Corporation of Canada in 1981 and assumed the position • Audit Committee • Nomination and Remuneration Committee of Vice President the following year. • Nomination and In 1984, he led the creation of Power Remuneration Committee Financial Corporation to consolidate INITIAL APPOINTMENT TO THE BOARD Power’s major financial holdings, as well INITIAL APPOINTMENT TO THE BOARD July 2013 as Pargesa Holding SA, under a single CORPORATE GOVERNANCE CORPORATE May 2002 GOVERNANCE CORPORATE corporate entity. Mr. Desmarais served PROFESSIONAL BACKGROUND as Vice President of Power Financial CEO of *Groupe Bruxelles Lambert from 1984 to 1986, as President and PROFESSIONAL BACKGROUND since 2012, Ian Gallienne has an MBA 93 Chief Operating Officer from 1986 to August François von Finck holds a from INSEAD in Fontainebleau. From 1989, as Executive Vice Chairman from Master of Business Administration from 1998 to 2005, he was a Director at the 1989 to 1990, as Executive Chairman Georgetown University, Washington. D.C. private equity funds Rhône Capital LLC from 1990 to 2005, as Chairman of in New York and London. In 2005, he the Executive Committee from 2006 OTHER ACTIVITIES AND FUNCTIONS founded the private equity fund Ergon to 2008 and as Executive Co-Chairman *Custodia Holding SE, Munich (DE), Capital Partners in Brussels and was since 2008. He was named Chairman Member of the Board since 2018 its Managing Director until 2012. and Co-CEO with Power Corporation *Staatl. Mineralbrunnen AG, Bad He has been a Board Member of in 1996. After Power Financial and the Brückenau (DE), Member of the Board *Groupe Bruxelles Lambert since 2009.
OUR VALUE TO SOCIETY Frère Group of Belgium took control of OUR VALUE TO SOCIETY since 2001 Pargesa in 1990, Mr. Desmarais moved OTHER ACTIVITIES AND FUNCTIONS to Europe from 1990 to 1994, to develop Bank von Roll, Zürich (CH), Vice the partnership with the Frère Group and President of the Board since 2009 *adidas (D), Member of the to restructure the Pargesa group. *Von Roll Holding AG, Breitenbach (CH), Supervisory Board From 1982 to 1990, he was a member Member of the Board since 2010 *Imerys, Paris (F), Member of the of the Management Committee of Board, Chairman of the Strategic Pargesa, in 1991, Executive Vice Committee, Member of the Chairman and then Executive Chairman LUITPOLD VON FINCK (1971) Compensation Committee, Member of the Appointments Committee of the Committee; in 2003, he was German and Swiss appointed Co-Chief Executive Officer *Pernod Ricard SA, Paris (F), Member and in 2013 named Chairman of the FUNCTION IN SGS of the Board, Member of the Strategic Board. He is a Director of many Power Committee and Member of the Member: Group companies in North America. Remuneration Committee 2019 INTEGRATED ANNUAL REPORT 2019 INTEGRATED ANNUAL REPORT • Board of Directors Frère-Bourgeois SA (BE), Member OTHER ACTIVITIES AND FUNCTIONS of the Board INITIAL APPOINTMENT TO THE BOARD *Groupe Bruxelles Lambert, Brussels Compagnie Nationale à Portefeuille SA (BE), Chairman of the Board of Directors March 2019 (BE), Member of the Board *Great-West Lifeco Inc., Winnipeg Société Civile du Château Cheval Blanc (CAN), Member of the Board (including PROFESSIONAL BACKGROUND (France), Member of the Board those of its major subsidiaries) Luitpold von Finck’s educational Marnix French ParentCo (groupe Webhelp), *IGM Financial Inc., Winnipeg (CAN), background is in the banking sector. Paris (France) Member of the Board (including those He was successfully involved in of its major subsidiaries) various parts of the von Finck family business, including real estate and mid-sized industrial companies.
* Listed company. < BACK TO CONTENTS CALVIN GRIEDER (1955) OTHER ACTIVITIES AND FUNCTIONS SHELBY R. DU PASQUIER (1960) Swiss Schoellerbank AG, Vienna (AT), Swiss Member of the Board since 1999 FUNCTION IN SGS Stölzle Oberglas, Koeflach (AT), FUNCTION IN SGS Member: Member of the Board since 1989 Member: • Board of Directors Honorary General Consul of Austria • Board of Directors to the Land of Baden-Württemberg • Audit Committee • Professional Conduct Committee • Nomination and • Nomination and Remuneration Remuneration Committee GÉRARD LAMARCHE (1961) Committee Belgian INITIAL APPOINTMENT TO THE BOARD INITIAL APPOINTMENT TO THE BOARD
March 2019 FUNCTION IN SGS March 2006 Member: PROFESSIONAL BACKGROUND PROFESSIONAL BACKGROUND • Board of Directors Calvin Grieder holds an Engineering Attorney at Law, Partner, Lenz & Staehelin Master of Science from the ETH Zurich Chairman: Law firm, Geneva. and has completed an Advanced • Audit Committee Shelby R. du Pasquier holds degrees from Management Program (AMP) at Geneva University Business School and Harvard University. INITIAL APPOINTMENT TO THE BOARD School of Law as well as from Columbia In 1980, Mr. Grieder started his career July 2013 University School of Law (LLM). He was as Marketing Manager at Georg Fischer admitted to the Geneva Bar in 1984 and in Switzerland and continued in various PROFESSIONAL BACKGROUND to the New York Bar in 1989. He became executive positions at Swiss and a Partner of Lenz and Staehelin in 1994. German companies. These included Chairman of Multifin SA (BE), since 2019 Swiss Industrial Company (SIG) and Gérard Lamarche is a graduate in OTHER ACTIVITIES AND FUNCTIONS Swisscom Telecom, where he served Economic Sciences from the University as Head of the Mobile and Internet of Louvain-la-Neuve (Belgium) and the *Swiss National Bank, Member of business and Member of the INSEAD Business School (Advanced the Board since 2012 GOVERNANCE CORPORATE Executive Board. He was CEO of Bühler, Management Program for Suez Group Stonehage Fleming Family & Partners an international engineering group, Executives). He also trained at the (Jersey) Limited, Member of the Board from 2001 to 2016. Wharton International Forum in 1998-99 since 2012 94 (Global Leadership Series). Pictet and Cie Group SCA, Chairman OTHER ACTIVITIES AND FUNCTIONS He began his career with Deloitte of the Supervisory Board since 2013 *Givaudan SA, Vernier (CH), Haskins and Sells in Belgium in Chairman of the Board 1983 and was appointed as an M&A Bühler Group AG, Uzwil (CH), consultant in the Netherlands in 1987. KORY SORENSON (1968) Chairman of the Board In 1988, he joined Société Générale British de Belgique as Investment Manager. AWK Group AG, Zurich (CH), He was promoted to Controller in 1989 Chairman of the Board FUNCTION IN SGS
before becoming an Advisor to the OUR VALUE TO SOCIETY Avenir Suisse, Zurich-Oerlikon (CH), Strategy and Planning Department from Member: Member of the Board of Trustees 1992 to 1995. • Board of Directors He joined Compagnie Financière de • Audit Committee Suez as Special Advisor to the Chairman CORNELIUS GRUPP (1947) and Secretary to the Suez Executive PROFESSIONAL BACKGROUND Austrian Committee (1995-1997); he was Kory Sorenson has a DESS in Corporate later appointed Senior Vice President Finance from the Institut d’Etudes FUNCTION IN SGS in charge of Planning, Control and Politiques de Paris and a master’s Member: Accounting. In 2000, Gérard Lamarche degree in Applied Economics from • Board of Directors joined NALCO (the US subsidiary of the the Universite de Paris – Dauphine. Suez Group and world leader in industrial • Professional Conduct Committee She also holds a bachelor’s degree in water treatment) as General Managing Econometrics and Political Science from Director. He was appointed CFO of
the American University in Washington, 2019 INTEGRATED ANNUAL REPORT INITIAL APPOINTMENT TO THE BOARD the Suez Group in 2003. D.C., a certificate in Governance from March 2011 He was the Co-CEO of Groupe Bruxelles Harvard Executive Education and a Lambert from 2012 to 2019. certificate in Leadership and Governance PROFESSIONAL BACKGROUND from INSEAD. Dr. Grupp holds a Doctorate in Law and OTHER ACTIVITIES AND FUNCTIONS She began her career in finance in 1992 a Master in Business Administration. *Umicore, Brussels (B), in the Treasury Department of Total He is the Owner and General Manager of Member of the Board in Paris before moving to banking in Tubex Holding GmbH, Stuttgart, Germany, *Groupe Bruxelles Lambert (B), 1995 and investment banking in 1997. a company active in the packaging Member of the Board She was Managing Director, Head of industry and of CAG Holding GmbH, Insurance Capital Markets of Barclays Lilienfeld, Austria, which is active in the Capital, and held senior positions in field of aluminum, glass and biomass.
* Listed company. < BACK TO CONTENTS the capital markets and the financial 5. The director must not be affiliated exchange. Mandates assumed at the institutions divisions of Credit Suisse, with a significant customer or request of a controlling entity do not Lehman Brothers and Morgan Stanley. supplier of the company. count towards the maxima defined in 6. The director must have no personal the Articles of Association. OTHER ACTIVITIES AND FUNCTIONS services contract(s) with the In addition, the Articles of Association *SCOR SE, Paris (FR), Member of the company or a member of the limit to ten, the permissible participations Board and Chair of the Audit Committee, company’s senior management. in boards of associations and other non- member of the boards of SCOR’s 7. The director must not be affiliated profit organizations. All Board members US subsidiaries: SCOR Reinsurance with a not-for-profit entity that have confirmed that they comply with Company, SCOR Global Life Americas receives significant contributions these rules. Reinsurance Company and SCOR Global from the company. Life USA Reinsurance Company 3.4. ELECTIONS AND TERMS OF OFFICE 8. The director must not have been The Articles of Association of SGS SA *Phoenix Group Holdings PLC, London a partner or employee of the provide that each Member of the Board (UK), Member of the Board and Chair company’s external auditor during of Directors, and among them the of the Remuneration Committee the past three years. Chairman of the Board of Directors and *Pernod Ricard SA, Paris (FR), 9. The director must not have any other the Members of the Nomination and Member of the Board and Chair of conflict of interest that the board Remuneration Committee, is elected the Remuneration Committee determines to mean they cannot be each year by the shareholders for a Bank Gutmann, Vienna (AU), privately considered independent. period ending at the next Annual General owned, Member of the Supervisory Board Meeting. Each Member of the Board Chateau Mondot, Bordeaux (FR), Based on this review, the Board has is individually elected. There is no limit Member of the Supervisory Board concluded that all the Directors meet to the number of terms a Director may the above mentioned criteria, are serve. The initial date of appointment independent from management and of each Board Member is indicated free of any relationships that could on page 92, section 3.1. The Directors bring a wide range of materially interfere with the exercise experience and skills to the Board. of their independent judgement. 3.5. INTERNAL ORGANIZATIONAL They participate fully in decisions on key STRUCTURE
CORPORATE GOVERNANCE CORPORATE The remuneration of the Members of GOVERNANCE CORPORATE issues facing the Group. Their combined The duties of the Board of Directors the Board of Directors is detailed in the expertize in the areas of finance, and its Committees are defined in the Remuneration Report. The Chairman of commercial law and strategy, and their Company’s Articles of Association and the Board, jointly with members of the 94 respective positions of leadership in in its internal regulations, which are 95 Board of Directors, reviews periodically various industrial sectors are important reviewed periodically. They set out all the performance of the Board as a contributing factors to the successful matters for which a decision by the Board whole, of its Committees and of each governance of an organization of the size of Directors is required. In addition to of its individual members. of the SGS Group. the decisions required by Swiss company The Board undertakes a periodic review On the basis of this periodic assessment, law, the Board of Directors approves of the Directors’ interests in which changes to the composition of the Board the Group’s strategies and key business all potential or perceived conflicts of membership are regularly proposed to policies, investments, acquisitions, interests and issues relevant to their the Company’s Annual General Meeting disposals and commitments in excess of Shareholders. of delegated limits. OUR VALUE TO SOCIETY independence are considered. OUR VALUE TO SOCIETY The Board considers the following This periodic performance evaluation is designed to ensure that the Board 3.5.1. ALLOCATION OF TASKS WITHIN criteria to assess the independence THE BOARD OF DIRECTORS of its members: is always in a position to provide an effective oversight and leadership role The Chairman of the Board is elected 1. The director must not have been to the Group. by the Annual Meeting of Shareholders. employed by the company in an He or she plans and chairs the Board executive capacity within the last 3.2. OTHER ACTIVITIES meetings, defines the agenda of the five years; Other activities and vested interests of meetings and conducts the deliberations 2. No family member of the director is the members of the Board of Directors of the Board of Directors. All members employed or was employed during are indicated on page 92, section 3.1. of the Board of Directors participate in the past three years by the Group deliberations of the Board and participate in any management capacity; 3.3. LIMITS ON EXTERNAL MANDATES equally in its decisions. 3. Neither the director or a family In compliance with the Ordinance against Within the limits permitted by law or 2019 INTEGRATED ANNUAL REPORT member has received any payments Excessive Compensation at Listed by the Articles of Association, the Board 2019 INTEGRATED ANNUAL REPORT from the Group other than Board Joint-Stock Companies (OaEC), the of Directors can decide to delegate remuneration approved by the Annual Company’s Articles of Association limit certain of its tasks to standing or General Meeting of Shareholders the number of mandates permissible ad-hoc committees. With the exception 4. The director is not acting (and must to Board members. These rules limit of the members of the Nomination not be affiliated with a company that the number of mandates that board and Remuneration Committee, who is acting in material manner as) an members can accept to no more than ten are elected by the shareholders, the adviser or consultant to the company board memberships in entities outside members of other Committees are or a member of the company’s the Group, out of which a maximum of appointed by the Board. senior management. five memberships in board of companies whose shares are traded on a stock
< BACK TO CONTENTS 3.5.2. MEMBERS LIST, TASKS AND AREA OF RESPONSIBILITY FOR EACH COMMITTEE OF THE BOARD OF DIRECTORS The following chart describes the Committees and their membership as at December 31, 2019:
NOMINATION AND PROFESSIONAL REMUNERATION AUDIT CONDUCT COMMITTEE
August Francois von Finck Member Member Ian Gallienne Member Calvin Grieder Member Member Member Cornelius Grupp Member Gérard Lamarche Chair Shelby du Pasquier Chair Chair Kory Sorenson Member
Mr. Kalantzis, Chairman of the plans or other plans for the allocation PROFESSIONAL CONDUCT COMMITTEE Board, attends the meetings of the of shares, issued from time to time by The Professional Conduct Committee Committees, with a consultative vote. the Company. The Committee reviews assists the Board of Directors and Each Committee acts within terms and approves the contractual terms of Management in establishing policies of reference established by the Board the employment of the Chief Executive relating to professional conduct and of Directors and set out in the internal Officer and the other members of oversees their implementation. The regulations of the Company. The the Management. The Committee Group’s professional conduct policies minutes of their meetings are available validates the appointment of members are embodied in the Code of Integrity, to all Directors. of the Operations Council and makes which sets out the principles governing recommendation to the Board regarding business conduct, which are applied NOMINATION AND the nomination of the CEO. It also across the whole SGS Group. These REMUNERATION COMMITTEE assists the Board in selecting new
principles reflect the Business Principles GOVERNANCE CORPORATE Members of the Nomination and members of the Board of Directors. for Countering Bribery issued by Remuneration Committee are elected Transparency International and Social AUDIT COMMITTEE individually by the Annual Meeting Accountability International, and 96 of Shareholders, with the chairman The Audit Committee supports the incorporate the rules adopted by the of the Committee designated among Board of Directors in discharging TIC Council, the professional association them by the Board of Directors. The its duties in relation to financial for the inspection industry. Committee acts in part in an advisory reporting and internal controls. Such In addition to the Board Members, capacity to the Board, and in part as duties include consideration of the the Professional Conduct Committee a decision-making body on matters appropriateness of accounting policies, comprises the Chief Executive that the Board has delegated to the the adequacy of internal controls, risk Committee. The Committee advises management and regulatory compliance. officer, the General Counsel and the Board of Directors on matters It is also responsible for the supervision Chief Compliance Officer (General Counsel). The head of Internal Audit regarding the remuneration of the of the internal and external auditors OUR VALUE TO SOCIETY Members of the Board of Directors and of the Group, each of which provides attends all meetings of the Professional Management, and on general policies regular reports to the Committee Conduct Committee. relating to remuneration applicable to on findings arising from their work. the Group. The Committee defines the The Committee reports regularly to conditions of share-based remuneration the Board of Directors on its findings.
NUMBER OF RESOLUTIONS APPROVED AVERAGE DURATION MEETINGS HELD IN 2019 FREQUENCY OF MEETINGS OUTSIDE MEETINGS OF MEETINGS
Board of Directors 6 times (including 1 phone conference) 1 3 hours Nomination and Remuneration Committee 2 times 90 minutes 2019 INTEGRATED ANNUAL REPORT Audit Committee 6 times (including 1 phone conference) 2 hours and 30 minutes Professional Conduct Committee 1 times 1 hour
< BACK TO CONTENTS 3.5.3. WORKING METHODS OF Management in order to assist them at least three times a year, i.e. once THE BOARD AND ITS COMMITTEES to prepare for the meetings. The Board before the publication of the annual The Board of Directors and each and each of the Committees can and half-year results, and once outside Committee convene regularly scheduled request the attendance of members these periods, to review and approve meetings with additional meetings held of the Management of the Group. The the scope of internal and external audit. as and when required, in person or Board and each of the Committees are The Professional Conduct Committee by phone conference. The Board and authorized to hire external professional and the Nomination and Remuneration the Committees may pass resolutions advisors to assist them in matters Committee at least once a year. by written consent. Each Board within their sphere of responsibility. Member has the right to request that To be adopted, resolutions need a ATTENDANCE TO BOARD AND COMMITTEE MEETINGS a meeting be held or that an item for majority vote of the members of the discussion and decision be included Board or Committee, with the Chairman The chart below summarizes the in the agenda of a meeting. Board having a casting vote. The Board and attendance by each Board Member in and Committee members receive its committees convene as often as 2019 at the meetings (including meetings supporting documentation in advance required. In principle the Board meets by phone conference) of the Board and of the meetings and are entitled to at least four times a year, i.e. once every the respective standing Committees. request further information from the quarter. The Audit Committee meets
BOARD NOMINATION AND PROFESSIONAL MEMBER MEETINGS REMUNERATION AUDIT CONDUCT COMMITTEE
Peter Kalantzis 6/6 Paul Desmarais 4/6 August François von Finck 6/6 2/2 5/6 Luitpold von Finck1 3/3 Ian Galllienne 6/6 2/2 Calvin Grieder1 3/3 1/1 5/5 1/1 Cornelius Grupp 5/6 1/1 CORPORATE GOVERNANCE CORPORATE GOVERNANCE CORPORATE Gérard Lamarche 6/6 6/6 Shelby du Pasquier 6/6 2/2 1/1 Kory Sorrenson1 3/3 5/5 96 97 August von Finck2 3/3 1/1 Christopher Kirk2 1/3
1. Directors elected for the first time in March 2019. 2. Directors not re-elected in March 2019.
3.6. DEFINITION OF AREAS • Prepares the General Meetings The Operations Council is chaired by OUR VALUE TO SOCIETY OUR VALUE TO SOCIETY OF RESPONSIBILITY of Shareholders and implements the Chief Executive Officer and consists The Board of Directors is responsible shareholders’ resolutions of those individuals entrusted with the for the ultimate direction of the Group. • Notifies the judicial authorities in the operational management of the Group’s The Board discharges all duties and event of insolvency of the Company, activities, as follows: responsibilities that are attributed as required by Swiss law • The Chief Operating Officers (COOs) to it by law. In particular, the Board: are responsible for operations in the Group’s seven regions (page 90, • Leads and oversees the conduct, In accordance with the Company’s section 1.1.) management and supervision internal regulations, operational of the Group management of the Group, a function • The Executive Vice Presidents (EVPs) • Determines the organization which the Board of Directors has are entrusted with the management of the Group delegated, is the responsibility of the and development of the Group’s nine business lines (page 90, section 1.1.) • Assesses risks facing the business Operations Council. The Operations Council has the authority and • The Senior Vice Presidents (SVPs) 2019 INTEGRATED ANNUAL REPORT and reviews risk management and 2019 INTEGRATED ANNUAL REPORT mitigation policies responsibility to decide on all issues represent the principal Group support that are not attributed to the Board of functions (Finance, Human Resources, • Appoints and removes the Group’s Directors. In the event of uncertainty IT, Communications and Investor Chief Executive Officer and other on a particular issue regarding the Relations, Corporate Development, members of management separation of responsibility between the Legal and Compliance, and Strategic • Defines the Group’s accounting and Board of Directors and the Management, Transformation) control principles the final decision is taken by the The composition, role and organization • Decides on major acquisitions, Chairman of the Board. The Chairman of the Operations Council are detailed investments and disposals is regularly informed of the activities on page 99, section 4. of the Operations Council by the Chief • Discusses and approves the Group’s Executive Officer, the Chief Financial strategy, financial statements and Officer and the General Counsel. annual budgets
< BACK TO CONTENTS 3.7. INFORMATION AND CONTROL During Board Meetings, the Board is The Committee monitors disciplinary INSTRUMENTS VIS-À-VIS updated on important issues facing actions taken and the implementation THE MANAGEMENT the Group. The Chief Executive of corrective actions. A. RESPONSIBILITY OF THE BOARD Officer, the Chief Financial Officer and the General Counsel and Chief E. OTHER The Board of Directors has ultimate Compliance Officer (hereafter “Senior In addition, the main business lines have responsibility for the system of internal Management”) attend all of the Board specialized technical governance units, controls established and maintained of Directors meetings, while other which ensure compliance with internally by the Group and for periodically Operations Council members attend set quality standards and industry reviewing its effectiveness. Internal from time to time to discuss matters best practices. Formal procedures are controls are intended to provide under their direct responsibility. The in place for both internal and external reasonable assurance against financial Board of Directors meets regularly with auditors to report their findings and misstatement and/or loss, and include the members of the Operations Council. recommendations independently to the safeguarding of assets, the During Board Meetings or Committee the Board’s Audit Committee. maintenance of proper accounting Meetings, Board members can records, the reliability of financial require any information concerning F. RISK ASSESSMENT information and compliance with the Group. The Board reviews and The Board conducts on a yearly basis relevant legislation, regulation and monitors regularly and formally previous an assessment of the risks facing the industry practice. acquisitions and large investments as Group. This process is conducted with well as the implementation of related B. GOVERNANCE FRAMEWORK the active participation and input of the Group strategies. Management. Once identified, risks are The Group has an established governance The Group has a dedicated Internal Audit assessed according to their likelihood, framework, which is designed to oversee function, reporting to the Chairman of severity and mitigation. its operations and assist the Company the Board and the Audit Committee, The Board deliberates on the adequacy in achieving its objectives. The main which assesses the effectiveness of measures in place to mitigate principles of this framework include the and appropriateness of the Group’s and manage risks and assigns definition of the role of the Board and its risk management, internal controls responsibility to designated managers Committees, an organizational structure and governance processes as well as for implementation of such measures. with documented delegated authority the reliability of internal financial and As part of this process, the ownership of from the Board to Management, and operational information, and ensures GOVERNANCE CORPORATE and accountability for identified risks are procedures for the approval of major that the standards and policies of approved by the Board. investments, acquisitions and other the Group are respected. Internal capital allocations. Audit reviews and identifies areas of The implementation of such actions is 98 The Chief Executive Officer and the potential risk associated with the key audited by Internal Audit. These findings Chief Financial Officer participate in business activities performed by a are communicated to the Board of the meetings of the Board of Directors particular office, highlights opportunities Directors so that progress and identified and the Audit Committee. for improvement and proposes risks can be monitored objectively and constructive control solutions to reduce independently from Management. The Group Controller and the Head of any exposures. All key observations the Internal Audit Function participate The risks identified and monitored by the are communicated to the Operations in the meetings of the Audit Committee. Board fall broadly into three categories: Council and the Chairman of the Board first, environment risk, which includes The Head of Human Resources through formal and informal reports. circumstances outside the Group’s participates in the meetings of the OUR VALUE TO SOCIETY The Audit Committee is regularly direct sphere of influence, such as Nomination and Remuneration informed about audits performed and competition and economic or political Committee, and the General Counsel important findings, as well as the landscape; second, process risks that and Chief Compliance Officer attends progress in implementing the agreed include risks linked to the operations of all meetings of the Board of Directors actions by Management. the business, the management of the and its Committees. Group and the integrity of its reputation The other members of the Operations D. GENERAL COUNSEL AND in the market place; and third, risks CHIEF COMPLIANCE OFFICER Council and other members of associated with information and decision Management only participate in the Board Furthermore, the Group has a making. For each of the risk categories and Committee meetings by invitation. Compliance Function, headed by and within these categories, for each the General Counsel and Chief significant risk identified, the Board C. INFORMATION TO THE BOARD Compliance Officer, who is a member deliberates on proposed mitigation, risk of the Professional Conduct Committee The Board of Directors is constantly avoidance or risk transfer measures and has direct access to the Chairman informed about the operational and and approves action plans designed to of the Board. The Compliance 2019 INTEGRATED ANNUAL REPORT financial results of the Group by way of control such risks. The Board receives Function supports the implementation detailed monthly management reports, regular updates on the implementation of a compliance program based on which describe the performance of of risks mitigation measures and their the SGS Code of Integrity, available in the Group and its divisions. effectiveness is tested by internal audit 30 languages. The goal of the program is During each Board meeting, the Chief which reports to the Board, respectively to ensure that the highest standards of Executive Officer and the Chief Financial the Audit Committee. integrity are applied to all of the Group’s Officer present a report to the Board activities worldwide in accordance with of Directors on the operations and international best practices. The General financial results, with an analysis of Counsel and Chief Compliance Officer deviations from prior year and from reports violations of compliance rules current financial targets. every semester to the Professional Conduct Committee.
< BACK TO CONTENTS 4. OPERATIONS COUNCIL OLIVIER MERKT (1962) FABRICE EGLOFF (1969) Swiss French The Operations Council (as defined on page 90, section 1.1.) meets on Chief Compliance Officer COO, Africa and Western Europe a regular basis, in principle at least Doctorate in Law, admitted to the bar (since February 2019) five times a year. Between meetings, in Switzerland Master of Business Administration it holds regular phone conferences Joined SGS in 2001 in International Business Affairs and may make decisions on such calls Joined SGS in 1995 or by electronic voting. PREVIOUS RESPONSIBILITIES 4.1. MEMBERS OF 2006–2008: VP, Corporate Development PREVIOUS RESPONSIBILITIES THE OPERATIONS COUNCIL 2001–2006: Senior Counsel 2009–2017: Managing Director, France Members of the Operations Council 2004–2008: Managing Director, bring to the Group years of experience Hong Kong and expertize in their respective fields. TEYMUR ABASOV (1972) They come from a wide range of Azerbaijani backgrounds that reflects the multiple LUIS FELIPE ELIAS (1959) aspects of the Group. The Group COO, Eastern Europe and Middle East Peruvian strives to promote talent internally and Degree in Electrical Engineering encourages women to assume senior COO, South and Central America leadership positions. The members of Joined SGS in 1994 Industrial Engineering Degree and MBA the Operations Council at 31 December 2019 were as follows: PREVIOUS RESPONSIBILITIES Joined SGS in 2004 2006–2007: Managing Director, Kazakhstan and Caspian Sub-Region PREVIOUS RESPONSIBILITIES FRANKIE NG (1966) 2004–2006: Managing Director, 2012–2018: Managing Director, Swiss/Chinese Azerbaijan and Georgia Ecuador and Peru 2004–2012: Deputy Managing Chief Executive Officer 2003–2004: Managing Director, Georgia Director, Peru CORPORATE GOVERNANCE CORPORATE BA in Economics and GOVERNANCE CORPORATE Electronics Engineering HELMUT CHIK (1966) Joined SGS in 1994 DERICK GOVENDER (1970) 98 Chinese 99 South African PREVIOUS RESPONSIBILITIES COO, North East Asia EVP, Minerals 2011–2015: EVP, Industrial Services Master of Business Administration Diploma in Analytical Chemistry 2005–2011: EVP, Consumer Joined SGS in 1991 Testing Services Post graduate in Business Management 2002–2004: Managing Director, PREVIOUS RESPONSIBILITIES Joined SGS in 2002 US Testing 2004–2017: COO, China and Hong Kong PREVIOUS RESPONSIBILITIES 2003: Managing Director, Hong Kong
OUR VALUE TO SOCIETY 2014–2015: Minerals Manager, Chile OUR VALUE TO SOCIETY DOMINIK DE DANIEL (1975) 2002: Vice President Softline Global, 2010–2014: VP Minerals, Africa German Consumer Testing Services 2007-2010: Regional Minerals Manager, Chief Finance Officer SGS Southern Africa OLIVIER COPPEY (1972) (since February 2019) Swiss Degree in Banking, CEFA DIRK HELLEMANS (1958) Investment Analyst EVP, Agriculture, Food and Life Belgian Joined SGS in 2019 MSc Economics COO, North and Central Europe Joined SGS in 1994 PREVIOUS WORK EXPERIENCE Degree in Chemical Engineering and 2015–2018: CFO and Chief Operating PREVIOUS RESPONSIBILITIES Master in Business Administration Officer, IWG plc. UK, the global 2009–2013: Vice President Seed Joined SGS in 1988 2019 INTEGRATED ANNUAL REPORT leader for flexible workspace 2019 INTEGRATED ANNUAL REPORT and Crop, Agricultural Services 2006–2015: CFO Adecco Group, PREVIOUS RESPONSIBILITIES 2006–2008: Vice President North Switzerland America, Agricultural Services, USA 2012–2015 : COO, Northern, Central and Southern Europe 1994–2006: Managerial positions, Agricultural Services, Switzerland/ 2004–2012: COO, Central and North India/Cameroon Western Europe 2002–2004: COO, North West Europe
< BACK TO CONTENTS JOSÉ MARÍA HERNÁNDEZ-SAMPELAYO (1961) ROGER KAMGAING (1966) PETER POSSEMIERS (1962) Spanish Swiss Australian/Belgian
SVP, Human Resources EVP, Governments and Institutions EVP, Environmental, Health and Safety Bachelor in Law Master in Commercial Law and Tax BSc Chemistry and Microbiology Master of Business Administration Master in Auditing and Consulting Joined SGS in 1983 Joined SGS in 1996 Initially joined SGS in 1996, rejoined in 2014 PREVIOUS RESPONSIBILITIES PREVIOUS RESPONSIBILITIES PREVIOUS RESPONSIBILITIES 2007–2012: Global Sales, OGC 2010–2017: Managing Director, Spain 2000–2012: Governments and 2005–2007: Managing Director, Korea 2001–2010: HR Manager, Western Europe Institutions Services, Global Head 2003–2005: OGC Business Development Business Development 1996–2010: HR Manager, Spain Manager Asia Pacific, China 1997–2000: Governments and Institutions Services, Sales Manager CHRISTOPH HEIDLER (1969) TOBY REEKS (1976) German OTHER WORK EXPERIENCE British 2012–2014: Kamgaing Associates SVP, Investor Relations Chief Information Officer (member of (Consulting) and Time (African the OC since April 2019) Business Incubator) BA in Economics Degree in Electrical Engineering and Joined SGS in 2018 Information Technologies CHARLES LY WA HOY (1966) Joined SGS in 2015 OTHER WORK EXPERIENCE French 2013–2018: Executive Director, PREVIOUS RESPONSIBILITIES Morgan Stanley EVP, Consumer and Retail 2015–2019: Chief Information Officer 2011–2013: Director, Merrill Lynch Engineer in Electronics 2005–2011: Vice President, Merrill Lynch Initially joined SGS in 1992, rejoined PREVIOUS WORK EXPERIENCE GOVERNANCE CORPORATE in 2008 2014–2015: Chief Information Officer, CompuGroup Medical MALCOLM REID (1963) PREVIOUS RESPONSIBILITIES 2011–2014: Vice President Global British 100 2016–2018: Vice President of Retail Infrastructure Services, Schindler Solutions and European Business COO, South East Asia and Pacific Informatik Development, Consumer and Retail BSc Chemistry 2007–2011: Head of Global 2013–2016: Global Head of Materials Infrastructure, HeidelbergCement Joined SGS in 1987 and Manufacturing, Industrial Services 2009–2013: Vice President of PREVIOUS RESPONSIBILITIES FRÉDÉRIC HERREN (1955) Strategic Global Accounts, 2012–2015: EVP, Consumer Consumer Testing Services Swiss Testing Services OUR VALUE TO SOCIETY 2007–2011: EVP, Systems and SVP, Digital and Innovation JEFFREY MCDONALD (1964) Services Certification Master in Economics Australian/American 2005–2007: Managing Director, Australia Initially joined SGS in 1986, rejoined in 1999 EVP, Certification and Business Enhancement ALIM SAIDOV (1964) PREVIOUS RESPONSIBILITIES Postgraduate Diploma in Education Azerbaijani/Canadian 2010–2017: COO, Africa Joined SGS in 1995 2006–2014: EVP, Governments and EVP, Oil, Gas and Chemicals Institutions Services PREVIOUS RESPONSIBILITIES PhD in Science 2003–2010: EVP, Automotive Services 2007–2015: COO, North America Joined SGS in 1993 2004–2007: EVP, Systems and
PREVIOUS RESPONSIBILITIES 2019 INTEGRATED ANNUAL REPORT Services Certification 2007–2013: EVP, Oil, Gas and Chemicals 2003: Global Project Manager, Services and Environmental Services Systems and Services Certification 2005–2007: COO, Eastern Europe and Middle East 2004: COO, North America and Managing Director, Canada
< BACK TO CONTENTS WIM VAN LOON (1966) traded on a stock exchange. Mandates 5.2. RULES ON APPROBATION BY Belgian assumed at the request of a controlling THE ANNUAL SHAREHOLDERS MEETING entity do not count towards the maxima OF EXECUTIVE PAY The Company’s Articles of Association EVP, Industrial Services (since May 2018) defined in the Articles of Association. In addition, the Articles of Association provide that the Annual Shareholders Engineering degree in Industrial Electro Meeting approves a year in advance set limits to participations in boards Mechanic and master’s degree in the maximum amount at the disposal of associations and other not-for-profit Business Management of the Board of Directors to pay a organizations to no more than ten fixed remuneration to members of Joined SGS in 1989 such memberships. the Operations Council. In the event PREVIOUS RESPONSIBILITIES 4.5. MANAGEMENT CONTRACTS of changes in composition of the Operations Council occurring after 2015–2018: Managing Director, Benelux The Company is not party to any the approval by the Annual General 2011–2015: Executive Director, management contract delegating Meeting of the fixed remuneration of the Industrial Services, Benelux management tasks to companies executive team, the Board is authorized 2003–2015: Business Manager for or individuals outside the Group. to increase up to a maximum of 25% Industrial, Minerals and Consumer the amount authorized by the Testing Services, Benelux shareholders for that purpose. The Annual Shareholders Meeting approves and authorizes the award of 4.2. OTHER ACTIVITIES AND 5. COMPENSATION, annual incentives of the Operations VESTED INTERESTS SHAREHOLDINGS Council on the basis of the actual results The following list presents all material achieved in the year prior to the Annual activities in governing and supervisory AND LOANS Shareholders Meeting. boards, management positions and 5.1. CONTENT AND METHOD OF The Annual Shareholders Meeting consultancy functions, official tenures and DETERMINING THE COMPENSATION authorizes separately any long-term political positions held by each member of AND THE SHAREHOLDING PROGRAMS incentive plans. the Operations Council outside the Group, The Group’s overriding compensation both in Switzerland and abroad. policies are defined by the Board of 5.2.1. RULES ON PERFORMANCE- RELATED PAY AND ALLOCATION
CORPORATE GOVERNANCE CORPORATE Directors. The objectives of these GOVERNANCE CORPORATE DERICK GOVENDER policies are twofold: a) to attract and OF EQUITY-LINKED INSTRUMENTS Member of IPMI (International Precious retain the best talent available in the The Company’s Articles of Association industry and b) to motivate employees define the principles of the variable 100 Metal Institute) 101 and managers to create and protect value remuneration and the allocation of FRED HERREN for shareholders by generating long-term shares or equity-linked instruments to sustainable financial achievements. the members of the Operations Council Member of the Board of Delen SA, (please refer to the Remuneration Geneva since 2018 In line with these principles, Board members are entitled to a fixed fee, Report on pages 104–129 of this Member of the Council, Geneva which takes into account their level Annual Report for a description of the Chamber of Commerce and Industry of responsibility. Members of the Company’s rules in the matter). Operations Council receive a fixed 4.3. CHANGES IN THE remuneration and are entitled to a 5.2.2. RULES ON LOANS, OPERATIONS COUNCIL CREDIT FACILITIES AND OUR VALUE TO SOCIETY performance-related annual bonus and POST-EMPLOYMENT BENEFITS OUR VALUE TO SOCIETY During 2019, Carla De Geyseleer, a Long-Term Incentive plan. CFO, Pauline Earl, COO for Western Loans granted to members of the In compliance with the requirements Europe and François Marti, COO for governing bodies of the Company may of the Ordinance against Excessive North America left the Group. Thomas not exceed one year of remuneration Compensation at Listed Joint-Stock Klukas, EVP of Transportation left and must be granted at market Companies (OaEC), the Annual General the Operations Council. Biographical conditions. Neither as at 31 December Meeting approves the compensation information on former members of 2019, nor as at 31 December 2018, payable to the Board and the was any loan or advance granted the Operations Council may be found Operations Council. The rules on the in prior years Corporate Governance by the Group to members of the vote on pay applicable in the Group are Operations Council. reports, including pages 85 to 88 of explained below. the 2018 Integrated Annual Report. The ultimate responsibility for defining 5.2.3. RULES ON VOTE ON PAY 4.4. LIMITS ON EXTERNAL MANDATES remuneration policies and deciding on The Annual General Meeting approves all matters relating to remuneration the following matters related to the 2019 INTEGRATED ANNUAL REPORT The Articles of Association of the 2019 INTEGRATED ANNUAL REPORT rests with the Board of Directors, compensation of the Board and Company, in compliance with subject to decisions that require binding Operations Council: the Ordinance against Excessive resolutions of the Annual General • It approves the fixed fees payable to Compensation at Listed Joint-Stock Meeting. The Board of Directors is the Board of Directors until the next Companies (OaEC), limit the number assisted in its work by a Nomination Annual General Meeting of mandates permissible to members and Remuneration Committee, which is of the Operations Council, to no more elected by the Annual General Meeting. • It approves in advance a prospective than four board memberships in entities maximum fixed remuneration to the outside the Group, out of which a Operations Council during the next maximum of one membership in the financial year board of companies whose shares are
< BACK TO CONTENTS • It approves the total aggregate 6.2. STATUTORY QUORUMS 8. AUDITORS amount payable to the Operations The General Meeting of Shareholders Council for the performance-related can validly deliberate regardless of 8.1. DURATION OF THE MANDATE annual bonus related to the prior year AND TERM OF OFFICE OF THE the number of shares represented at LEAD AUDITOR • It approves the maximum amount the meeting. Resolutions are adopted Following a competitive process in 2000, payable under Long-Term Incentive by the absolute majority of votes cast. Deloitte SA was appointed auditor of plans to be introduced by the Company If a second ballot is necessary, a relative the Company and the SGS Group by the majority is sufficient, unless Swiss Resolutions of such matters are binding Annual General Meeting of Shareholders company law mandates a special majority. to the Board of Directors. In addition, the upon recommendation of the Board of Annual General Meeting is invited to cast Directors. The auditors of the Company a non-binding vote on the Remuneration 6.3. CONVOCATION OF GENERAL MEETINGS OF SHAREHOLDERS are subject to re-election at the Annual Report that describes the Company’s General Meeting every year. The current remunerations policies. This allows The rules regarding the convocation of lead auditor, Matthew Sheerin, was shareholders to express a view on the General Meetings of Shareholders are appointed in 2017, after agreement by overall policies of the Group in relation in accordance with Swiss company law. the Company’s Audit Committee. The to remuneration. 6.4. INCLUSION OF ITEMS ON THE AGENDA Company requires the Lead Auditor to be changed at the latest after completion of The Agenda of the General Meeting of five annual audit cycles, whereas Swiss the Shareholders is issued by the Board company law imposes a maximum period of Directors. Shareholders representing of seven years. When designated in 2017 shares with a minimum par value of 6. SHAREHOLDERS’ as Lead Auditor, Matt Sheerin replaced CHF 50 000 may request the inclusion James Baird, Lead Auditor for the PARTICIPATION RIGHTS of an item on the agenda of the General financial years 2012 to 2016 inclusively. All registered shareholders receive a Meetings, provided that such a request The Audit Committee reviews annually copy of the half-year and full-year results reaches the Company at least 40 days the desirability to renew the annual upon the publication of such results by prior to the General Meeting. mandate of its external auditors before the Company. They can request a copy proposing to the Board and the Annual of the Company’s Annual Report and are 6.5. REGISTRATION IN THE SHARE REGISTER General Meeting the re-election of personally invited to attend the Annual the auditors. GOVERNANCE CORPORATE General Meeting of Shareholders. The Company does not impose any deadline for registering shares prior to 6.1. VOTING RIGHTS AND a General Meeting. However, a technical 8.2. AUDIT FEES REPRESENTATION RESTRICTIONS notice of two business days is required Total audit fees paid to Deloitte for the 102 All registered shareholders can to process the registration. audit of the Company and the Group attend the General Meetings of financial statements in 2019 amounted Shareholders and exercise their right to CHF 7.2 million (2018: CHF 6.8 million). to vote. A shareholder may also elect to grant power of attorney to 8.3. ADDITIONAL FEES an independent proxy appointed 7. CHANGE OF An aggregate amount of CHF 1 million by the Company or to any other CONTROL AND (2018: CHF 0.9 million) was paid to registered shareholder. Deloitte for other professional services, DEFENSE MEASURES unrelated to the statutory audit activity, There are no voting restrictions, OUR VALUE TO SOCIETY mainly composed of tax compliance subject to the exclusion of nominee No restriction on changes in control services, non-statutory and other shareholders representing undisclosed is included in the Company’s Articles assurance services. principals, as detailed in section 2.6. of Association. 8.4. INFORMATION INSTRUMENTS 6.1.2. RULES ON INSTRUCTIONS 7.1. DUTY TO MAKE AN OFFER TO THE INDEPENDENT PROXY AND PERTAINING TO THE EXTERNAL AUDIT ELECTRONIC PARTICIPATION IN In the absence of any specific rules in The Audit Committee is responsible THE ANNUAL SHAREHOLDERS MEETING the Company’s Articles of Association, for evaluating the external auditor on Shareholders have the opportunity to give any investor or group of investors behalf of the Board of Directors and general or specific voting instructions to acquiring more than 33.3% of the conducts assessments of the audit the independent proxy, who is elected shares and voting rights of the Company services provided to the Group during by the General Meeting of Shareholders. has the duty to make a public offer in its regular meetings. It meets with Shareholders can give specific or generic compliance with the applicable Swiss the auditor at least three times per year, takeover rules. voting instructions to the independent including private sessions without the 2019 INTEGRATED ANNUAL REPORT proxy on all matters on the agenda of presence of Management. In 2019, 7.2. CLAUSES ON CHANGE OF CONTROL the General Meeting of Shareholders. the Audit Committee met five times These instructions can be issued There are no general plans or standard with the external auditors. In addition, in written form, or by electronic agreements offering specific protection the Chairman of the Board and the transmission. The voting of resolutions to Board Members, Senior Management Chairman of the audit committees have by electronic votes is authorized by or employees of the Group in the event met privately twice the lead partner the Articles of Association, within of a change of control, subject to the outside the presence of management. the modalities defined by the Board standard rules regarding termination of Directors. of employment.
< BACK TO CONTENTS The Committee considers and approves The auditor regularly presents its findings, the proposed audit plan, conducts both during the deliberations of the Audit assessment of the performance of Committee and in written reports, to the auditor and approves audit fees on the attention of the Board of Directors the basis of the amount of work required that summarize key findings. The Group in order to perform the audit. strives to safeguard and support the The Audit Committee reviews with the independence of the auditor by avoiding Group auditors the significant financial conflicts of interests. In applying this statement risk areas arising from the audit, policy, the attribution of other consultancy including the key audit matters referred to assignments is carefully reviewed to in the statutory auditor’s report. ensure that such assignments do not endanger the auditor’s independence. When evaluating the performance of the auditors, the Audit Committee assesses the effectiveness of the audit based on Swiss Law, their understanding of the business of the Group and how matters of significant importance for the Group 9. INFORMATION POLICY internal control and financial reporting The policy of the Group is to provide are identified, reported and resolved. individual and institutional investors, The Audit Committee reviews also directly or through financial analysts, how the Group auditors interact with business journalists, investment the component audit firms in charge consultants (financial community) and of auditing the main subsidiaries of the employees with financial and business Group, and the relevance and timeliness information in a consistent, broad, timely of issuance of statutory audits and and transparent manner. management letters. The Group website has a section The Audit Committee places a great fully dedicated to investor relations, emphasis on the independence of the where all financial information and CORPORATE GOVERNANCE CORPORATE external auditors, and on the absence presentations are available. This includes GOVERNANCE CORPORATE of conflict of interests, both at the an updated version of the Articles of Group level and at the level of individual Association, current information on 102 subsidiaries. It reviews carefully the share buyback programs and minutes 103 type of other services which are of shareholders’ meetings. SGS meets provided by the auditors, in addition to regularly with institutional investors, the audit, to ensure that such ancillary holds results presentations, road shows services could not endanger the and presentations at broker-sponsored independence of the audits. Permitted country or industry conferences, and other services include assistance with attends one-on-one meetings. tax compliance matters, and limited The Group publishes consolidated assistance in due diligence or advisory half- year unaudited and yearly audited services for prospective acquisitions.
OUR VALUE TO SOCIETY results in print and online formats. OUR VALUE TO SOCIETY The audit fees are approved on the basis The Annual Report is published in of a negotiated budget agreed with the English and is available upon order Group auditors taking into account the from the Group’s website. The current complexity of the audit, the structure of list of publication dates is available the Group and its internal control systems on the Group’s website. and the responsibility of the auditors. The Group acknowledges the directives The duties of the Committee include on the independence of financial consideration of the audit plan, regular research issued by the Swiss Bankers assessment of the performance of the Association, particularly articles 26 and auditor and approval of audit fees on 29–32. In addition, the Group complies the basis of the amount of work required with rules regarding information and in order to perform the audit. reporting of the federal act on stock The Audit Committee reviews with the exchange and securities trading, and 2019 INTEGRATED ANNUAL REPORT Group auditors the significant financial the ordinance on stock exchanges and 2019 INTEGRATED ANNUAL REPORT statement risk areas arising from the audit, securities trading. including the key audit matters referred The address of the main SGS registered to in the statutory auditor’s report. office and its contact details (phone and email) can be found on page 202 of the Annual Report.
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