Governance

Bühler’s Articles of Incorporation provide for a certain restriction of the permitted external activities of the Members of the Board of Directors. Members of the Board of Directors may not hold more than four additional mandates in listed companies, eight additional mandates against remuneration in unlisted companies, and eight unpaid additional mandates. Not included in these limitations are mandates in companies affiliated with Bühler, corporate mandates of Bühler, and mandates in associations, foundations, employee welfare foundations, charitable organizations, and other comparable structures. However, no Board Member shall hold more than 20 such additional mandates. Mandates refers to mandates in the supreme governing body of a legal entity registered in the commercial register in Switzerland or elsewhere. Members of the Executive Board are limited to two mandates at public companies or other legal entities against remuneration and four unpaid mandates.

Bühler’s Articles of Incorporation provide for the annual election by the General Assembly of all Board Members, its Chairman, and the Members of its Nomination and Compensation Committee. Term of office shall be one year, starting with the General Assembly at which each individual member is elected and ending with the following General Assembly. The Members of the Audit Committee are annually elected by the Board of Directors. Board Members will generally not be re-elected once they pass their 70th birthday or have been on the Board for 12 years.

For the year of first election to the Board of Directors, please refer to the individual curriculum vitae of each Board Member. At the General Assembly, the Board of Directors gives account to the shareholders on the attendance of Board and Committee meetings by each individual Board Member.    

The Audit Committee shall monitor the integrity of the financial statements of the Company, including its Annual Report. It promotes effective communication between the management, internal and external audits. The Audit Committee regularly reviews the functionality and effectiveness of the internal control system. It supports the Board of Directors in corporate governance issues. 

The Nomination and Compensation Committee is responsible for evaluating the balance of skills, knowledge, experience, and diversity of the Board, periodically reviewing the Board’s structure, and identifying as well as managing the process of potential candidates to be appointed as Directors. Furthermore, the Nomination and Compensation Committee determines and agrees with the Board of Directors on the policy for the compensation of the Members of the Board of Directors and of the Executive Board. It approves the design of and determines targets for any performance-related compensation schemes operated by the Company and approves the total annual payments made under such schemes. Within the parameters of the agreed policy the Nomination and Compensation Committee determines the total individual compensation package for each Member of the Board of Directors as well as of the Executive Board and prepares the remuneration report. 

Board meetings are held as often as matters require or upon the request of a Board Member, but at least four times per year. The agenda of the meeting shall be announced when it is convened, and pertinent information, if needed, shall be sent 10 days before the meeting to each Board Member. On unannounced items the Board can only decide if all Members of the Board are in attendance. Decisions may also be taken by circulation, provided that none of the Board Members request a formal meeting. Meetings of the Board Committees are convened separately from the Board meetings and scheduled as often as business requires. The Board of Directors receives verbal updates after each meeting of its Committees by their Chairman.

The Board of Directors is responsible for the ultimate direction, strategic supervision, and control of the management of the Company, and for other matters which are, by law, under its responsibility. Such inalienable duties include, essentially, (i) the ultimate management of the Company, (ii) the determination of its organization, (iii) the structuring of its accounting system and of the financial controlling, (iv) financial planning, (v) the appointment, removal, and ultimate supervision of persons entrusted with the management and representation of the Company, (vi) the preparation of the business report as well as the General Assembly and the implementation of its resolutions.

The Executive Board is responsible for all areas of strategic and operational management of the Company that are not reserved to the Board of Directors. The Executive Board is chaired by the Chief Executive Officer. 

The Advisory Board of the Urs Bühler Innovation Fund supports and advises the Board of Directors in innovation and identifies and executes first moves into future-oriented growth opportunities. 

The external auditors are appointed at the General Assembly and present the outcome of the audit to the Audit Committee.

Effective corporate governance is a precondition for Bühler to ensure a long-term and sustainable increase of its corporate value. Bühler bases this both on the Swiss Code of Best Practice for Corporate Governance and the OECD Principles of Corporate Governance. Corporate governance at Bühler is organized with the interests of its stakeholders in mind, including customers, employees, suppliers, and public communities. It also comprises compliance with environmental and social standards as well as an uncompromising commitment to financial integrity. As an international Swiss company, strict observation of local laws on a global scale and systematic and continuous monitoring of compliance in all markets are indispensable for Bühler. This is the only way to prevent operating risks and an impairment of reputation that might be caused by violation of compliance rules.

The Code of Conduct is part of the so-called Bühler Essentials. It serves all employees as a beacon, showing them how to live the Group’s core corporate principles (Trust, Ownership, and Passion) in their day-to-day jobs. It states what is expected of employees and business partners, defines the standards governing compliance with laws and regulations, and includes the fundamentals of communications, employee rights, health and safety, and financial integrity. 

Bühler regularly reviews its own principles of corporate governance to ensure that they are up to date. Its Code of Conduct also includes binding standards for its business partners. The Code of Conduct is continuously adjusted to the changing environment. Furthermore, a Supplier Code of Conduct for business partners exists and its roll-out is ongoing as part of the onboarding process.

The so-called ABC (Anti Bribery & Corruption) rules against bribery and corruption unmistakably state that no violations will be tolerated. They concern, in particular, collaboration with agents. Furthermore, it is mandatory for all employees with access to the learning platform to undergo the state-of-the-art online training program (Web Based Training, WBT) and to pass a final test. Employees without access take part in an offline classroom training. Participation in the training takes place upon entry into the company and the training must be repeated every three to five years.

Bühler further decentralized the organizational structure of its compliance function. In six Bühler regions regional compliance officers act as the first contact, except for compliance cases involving special risks, which are handled directly by the Compliance Board. This decentralization has greatly streamlined and accelerated the related processes. This is also because linguistic barriers have been eliminated, and the regional compliance officers are familiar with local regulations and conditions.

Clear accountability and defined actions ensure that compliance-related incidents are systematically reported to the central Compliance Board. This transparency is a precondition for ensuring that the company can gain the necessary insight from such incidents and take the required measures in response. Bühler is happy to report that awareness of the benefits of a transparent compliance reporting system have become increasingly acknowledged.  

The trade compliance program addresses customs, sanctions, and export controls. Such formal regulatory conditions for international trade are further evolving and are impacted by global political and economic trends. The Russian war on Ukraine has increased relevance and workload of the Trade Compliance Team enormously, as the CEO has mandated the so-called Ukraine/Russia-Desk with full compliance checks of all activities going into the countries concerned.

Trade Compliance is supported by the Export Compliance Program and trainings for management and employees. Furthermore since 2020 it is mandatory for all new relevant employees to undergo the state-of-the-art online training program (Web Based Training, WBT) and to pass a final test. 

The Internal Audit Department reports functionally to the Board of Directors, represented by the Audit Committee and administratively to the Chief Financial Officer. Meetings between internal and external auditors take place on a regular basis. The audit plan is aligned with the strategy and key business risks. A yearly risk assessment is prepared by Group Internal Audit. It is the basis for the yearly audit plan, which is approved by the Audit Committee. The results of the audits are discussed with the management of the audited unit, and major topics are presented to the Executive Board and the Audit Committee and thereafter reported to the Board of Directors. In 2021, six worldwide audits were carried out including two cross-sectional audits involving multiple world-wide legal entities. Group Internal Audit also reviews Groupwide compliance with the Code of Conduct as part of their internal audits. Violations are reported to the Compliance Board, Audit Committee and the Executive Board. 

Risks are assessed regularly as part of the company’s integrated risk management process. This process includes risk assessments being part of the Businesses annual strategic planning cycle as well as a moderated risk workshop per Business. The results are mapped and discussed with the management. The risk management system covers all measures in a systematic and transparent approach towards risks. It aims to identify, evaluate, mitigate, or avoid risks using suitable measures. Transferable risks are insured under the global insurance program of the Group. Risks are assessed regularly as part of the company`s integrated risk management process. The results are discussed with the management. 

In 2021 we managed to successfully re-certify the group ISO 9001:2015 and ISO 14001:2015 certificates with validity until November 2023. This was the result of the random sample check at our Bühler locations Bühler AG (BUZ), Uzwil, Switzerland; Bühler GmbH, Beilngries/Döbeln (BSSE/BDOE), Germany, Bühler UK Limited, UK, Bühler Inc. (BMIN), USA, Buhler (China) Holding Co. Ltd. (BCHN), Wuxi, China; Wuxi Buhler Machinery Manufacturing Co. Ltd. (BWUX), China, Buhler (China) Machinery Manufacturing Co. Ltd. (BCMC), China, Buhler Premier Tech (Wuxi) Packing Machinery Co. Ltd. (BTEC), China and Bühler + Scherler AG (SCHS), Switzerland; all of which have successfully passed SGS audits.

Further, we re-certified the Bühler AG sites in Uzwil and Appenzell in accordance with the ISO 45001:2018 standard with validity until December 2023.

In addition to the sites Bühler AG (BUZ) in Uzwil, Switzerland, Buhler Machinery Manufacturing Co. Ltd. (BWUX) and Buhler (Changzhou) Machinery Co., Ltd. (BCHA), China, FHW Franz Haas Waffelmaschinen GmbH (BHWL), Austria and Buhler Aeroglide Corporation (BRAL), USA the locations in India, Buhler (India) Pvt. Ltd. (BBAN), Bangalore was audited according to SEDEX/SMETA-4. The aim is to use the SMETA audit (Sedex Members’ Ethical Trade Audit) procedure to ensure greater transparency and security across the entire supply chain. Issues such as employee rights (e.g. wages, benefits, working hours, etc.), business ethics, health and safety, and environmental management were in the scope of the audit scheme.

The Members of the Nomination and Compensation Committee (NCC) are elected by the General Assembly. The Board of Directors (BoD) appoints the Chairman from among the elected members. The NCC supports the BoD in the remuneration issues defined here, with responsibilities being retained by the BoD. The NCC oversees defining and periodically reviewing the Remuneration Policy. It prepares all the relevant decisions of the Board of Directors around remuneration, for the Members of the BoD, Members of the Executive Board (EB), and submits its proposals (remuneration type and annual remuneration) to the BoD. In addition, it submits proposals to the BoD defining the annual goals for success and performance-related remuneration, and then defines the circle of potential recipients of this success- and performance-related remuneration.

For the year under review, the Members of the Nomination and Compensation Committee (NCC) were Dr. Konrad Hummler (Chairman), Frank N. J. Braeken, Karin Bühler and Jeannine Bühler. Permanent invitees were Calvin Grieder, Chairman of the Board of Directors; Stefan Scheiber, CEO; Irene Mark-Eisenring, Chief HR Officer and Christof Oswald, Head of HR Region Switzerland. Four meetings were held. The NCC Chairman reported to the BoD after each meeting, and the minutes were kept and distributed in a timely manner.

Bühler is committed to performance- and market-related remuneration. Success because of sound individual performance plus the success of the organization impacts the remuneration. All employees, including the Executive Board, shall undergo a formalized annual performance appraisal process (Employee Performance Management, EPM). The Individual Performance Goals are defined and agreed upon jointly with each employee at the start of the fiscal year. The financial success of the organization, measured on the basis of EBIT, is also part of performance-related remuneration.