ELECTION AND TERM OF OFFICE FOR THE MEMBERS OF THE BOARD OF DIRECTORS
The members of the Board of Directors of Hilti Corporation are elected by the Annual General Meeting for three years. As a rule, directors serve up to four terms, but no longer than until the end of the business year in which they reach the age of 70.
ALLOCATION OF RESPONSIBILITIES AND DUTIES OF THE BOARD OF DIRECTORS
In addition to its legally defined duties, the Board of Directors specifically takes decisions on the basic strategic direction of the Group, its long-term and annual strategic planning, important business decisions, as well as the succession planning of the Board of Directors itself and the succession planning and the appointment of the Executive Board.
The Audit Committee assists the Board of Directors in fulfilling its supervisory responsibilities with respect to the accounting and financial reporting practices of Hilti Corporation and its subsidiaries, compliance with legal and regulatory requirements, the internal and external audit processes as well as with its oversight of the risk management. The overall responsibility for the tasks delegated to the Audit Committee remains with the Board of Directors.
The internal audit department, Corporate Audit, supports the Board of Directors by monitoring the internal control status within Group companies. To achieve this, Corporate Audit conducts audits focused on controls within major transaction cycles as well as on processes for management of selected corporate risks. Corporate Audit’s objective is to provide transparency over the Group’s control environment and enable security to be provided over the Group’s resources.
The Group maintains an enterprise-wide risk management process which involves a complete risk inventory with different risk owners assigned to manage all known strategic, financial and occurrence-oriented risks of the Group. The risk owners are responsible for their respective risks to evaluate, implement, review and monitor compliance with the corresponding risk mitigation measures. For financial and occurrence-oriented risks, the Corporate Risk Manager is responsible for the risk reporting process and to ensure the reported content and identified measures regarding the identified risks are plausible. Corporate Audit undertakes reviews of selected risks as part of their internal control reviews in Group companies (see above) and in corporate functions managed by the respective risk owners. For strategic risks, Corporate Developments runs annual Strategy Review Workshops with the Executive Board. The risk management reporting is regularly reviewed by the Audit Committee, on behalf of the Board of Directors.
COMPENSATION TO THE BOARD OF DIRECTORS AND CORPORATE MANAGEMENT
Members of the Board of Directors are paid a fixed annual compensation plus a lump sum for expenses. The Chairman receives an additional variable component. There is no additional compensation for the performance of an Audit Committee function by a Director. Former members of the Board of Directors do not receive any remuneration.
The members of Corporate Management (the Executive Management Team and the Executive Board) receive an annual base salary and a variable compensation linked to performance. Members of the Executive Board receive a retirement allowance in addition to their statutory pension fund entitlement.
Former members of the Executive Management Team do not receive any additional compensation other than their statutory pension fund entitlement. Total compensation is detailed in the Group financial statements.
SHAREHOLDERS’ PARTICIPATION RIGHTS
Details of share and participation capital are given in the consolidated financial statements of the Group. Resolutions of shareholder meetings are generally decided by an absolute majority of represented votes. A majority of at least three quarters of represented votes is necessary to change the articles of incorporation, or for resolutions concerning changes to share and participation capital, subscription rights, expansion or restriction of business scope as well as mergers, transformation or liquidation of the company.
The examinations of the Group’s consolidated financial statements and the financial statements of Hilti Corporation are conducted by PricewaterhouseCoopers Ltd., St. Gallen.
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