Committees of the Board of Directors
The Chairman of the Board of Directors and the Board of Directors are assisted in their work by three permanent committees: the Audit Committee, the Compensation & Nomination Committee and the Sustainability Committee. The Board of Directors may decide at any time – by a majority decision – to set up further or dissolve existing committees (except for the Compensation & Nomination Committee). Until that time, all other tasks of the Board of Directors will be performed by the whole Board of Directors. The committees meet on the invitation by their chairman as often as business requires, usually immediately before or after an ordinary meeting of the Board of Directors. The practices of the Committees are governed by the respective Committee Charters, which are available on the website of Chocoladefabriken Lindt & Sprüngli AG. Otherwise, the rules applicable to the Board of Directors apply mutatis mutandis to the meetings of the Committees.
- Audit Committee Charter
- Compensation and Nomination Committee Charter
- Sustainability Committee Charter
Audit Committee
The Audit Committee consists of at least three independent members of the Board of Directors, whereby the Chairman of the Board of Directors may not be the chairman of the Audit Committee. Of the members of the Audit Committee, at least two must possess substantial expertise and experience in finance and accounting (financial literacy). The others must be familiar with the matters of accounting and audit. The members of the Audit Committee are appointed by the Board of Directors. As of December 31, 2022, the members of the committee were: Dr Thomas Rinderknecht (Chairman), Antonio Bulgheroni, and Dkfm Elisabeth Gürtler. The members of the Audit Committee possess sufficient experience and professional knowledge in the areas of finance and risk management to enable them to perform their tasks effectively.
The Audit Committee supports the Board of Directors in its duties, particularly with respect to the main areas of audit, completeness and accuracy of the financial statements, assessment and monitoring of audit findings, compliance with statutory requirements regarding the qualification of the external auditors and the individual auditors (including their independence), the performance of the external auditors and the risk management of the Group. In addition, the Audit Committee assesses the quality of the financial reporting and the effectiveness of the internal control systems, and ensures ongoing communication with the external auditors. It also scrutinizes the Group’s risk management principles and the appropriateness of risks taken, particularly in the areas of investments, currencies, raw material procurement, and liquidity.
The Audit Committee reviews the annual financial statements of the company and the consolidated financial statements of the Group for the attention of the Board of Directors and makes a proposal to the Board of Directors regarding their approval and submission for approval to the General Meeting. The Audit Committee reviews and discusses any fraud or fraudulent activities (including potential fraud or fraudulent activities), whether or not material, that involve members of the Board of Directors, members of the Group Management or other employees who have a significant role in the Group’s internal controls. Further, the Audit Committee ensures that the Board of Directors is fully informed in the areas the Audit Committee oversees. Additionally, the Audit Committee, with respect to the sustainability report, or, once integrated in the Annual Report, with respect to sustainability reporting, assess the accuracy, completeness and compliance of sustainability related financial disclosures and the non-financial disclosures, which are subject to audit or assurance, and provides recommendations with regard to the approval to the Sustainability Committee. Similarly, the Audit Committee assesses the accuracy, completeness and compliance of the financial aspects of the Compensation Report that are subject to audit, and provides recommendations with regard to the approval to the Compensation & Nomination Committee. The Audit Committee undertakes preparatory tasks and makes recommendations to the Board of Directors for important decisions in the areas discussed above, such as approval of risk management principles, adoption of the annual financial statements or proposals for the appointment of the statutory auditor. It discusses the CFO’s reporting on the risks taken, on risk-limiting measures, and on the justifiability of the risks taken and reviews the regular risk reports. The Audit Committee itself has, except for the enactment and amendments of the Group Approval Policy, no decision-making powers. It may, however, decide independently to entrust the auditor with special assignments and approve the fee budget for audit tasks submitted by the external auditor. The Audit Committee itself does not perform any direct professional auditing.
A detailed description of the Audit Committee’s duties is included in the Audit Committee Charter, which is available on the website of Chocoladefabriken Lindt & Sprüngli AG.
The committee meets as often as business requires, but at least four times a year. In the reporting year, four regularly scheduled meetings were held, whereby all members attended these meetings. The meetings generally lasted around one hour each, with members of Group Management in regular attendance. The auditor attended one meeting of the Audit Committee. The auditor’s direct access to the Audit Committee is guaranteed at all times. No external consultants took part in meetings of the Audit Committee. All minutes of the Audit Committee are made available to all members of the Board of Directors. The chairman of the Audit Committee also reports to the Board of Directors after each meeting of the Audit Committee in the form of a brief summary of the Audit Committee’s activities and findings.
Compensation & Nomination Committee
The Compensation & Nomination Committee consists, subject to the election of its members by the General Meeting, of a minimum of three and of a maximum of five members of the Board of Directors, the majority of whom must be independent. Each member is elected individually by the General Meeting for a term of office of one year until the end of the next Annual General Meeting. As of December 31, 2022, the Committee members comprised: Dr Rudolf K. Sprüngli (Chairman), Antonio Bulgheroni, and Silvio Denz. If necessary, the Compensation & Nomination Committee consults external external advisors to perform its duties.
The Compensation & Nomination Committee supports the Board of Directors in its function of succession planning of the Board of Directors, regarding the appointment, dismissal and succession planning of the CEO and other members of the Group Management as well as matters relating to the compensation of the Board of Directors and the Group Management. To the extent that the own compensation is directly affected (other than the compensation of the Board of Directors in general), the relevant member of the Compensation & Nomination Committee is excluded from the discussion and voting.
The Compensation & Nomination Committee reviews the company’s compensation policies and programs for market compatibility, effectiveness and compliance with the Articles of Association, the law and best practices, and submits them or any amendments thereto to the Board of Directors for decision or, where required by law or the Articles of Association, submission to the General Meeting for approval. It reviews the Compensation Report, in collaboration with the Audit Committee with respect to financial disclosures and with the Sustainability Committee with respect to aspects of sustainability, and makes recommendations to the Board of Directors regarding the approval and submission to the General Meeting.
Furthermore, the Compensation & Nomination Committee undertakes an annual assessment of the independence of the members of the Board of Directors. Unless expressly provided for otherwise, the Compensation & Nomination Committee assists the Board of Directors with preparatory and supporting activities and issues proposals and recommendations to the Board of Directors.
A detailed description of the duties with regard to both succession planning and compensation can be found in the Compensation & Nomination Committee Charter, which is available on the Company’s website.
The Compensation & Nomination Committee meets as often as business requires, but at least three times a year. In the reporting year, three regularly scheduled meetings were held, whereby all members attended these meetings. The meetings generally lasted around one hour. All minutes of the Compensation & Nomination Committee are made available to all members of the Board of Directors. The chairman of the Compensation & Nomination Committee also reports to the Board of Directors after each meeting of the Compensation & Nomination Committee in the form of a brief summary of the Compensation & Nomination Committee’s activities and findings.
Sustainability Committee
The Sustainability Committee consists of a minimum of three members of the Board of Directors. These may be both independent and non-independent members of the Board of Directors. The members of the Sustainability Committee are appointed by the Board of Directors. As of December 31, 2022, the Committee members comprised: Dr Dieter Weisskopf (Chairman), Silvio Denz and Ernst Tanner.
The Sustainability Committee supports the Board of Directors in setting strategies, targets and internal policies to ensure compliance with applicable legal requirements and the long-term sustainability of the company in its social and environmental aspirations, and taking into consideration the economic dimension. The Sustainability Committee further supports the Board of Directors in setting the strategic direction and sustainability targets for company activities, aligning the financial interests and, business strengths of the company, and social and environmental interests.
The Sustainability Committee guides the Board of Directors with regard to setting up a governance structure and internal policies and processes to ensure compliance with applicable laws and the implementation of the social and environmental sustainability targets and strategies. The Sustainability Committee assesses the accuracy, completeness and compliance of the sustainability-report, or, once integrated in the Annual Report, the sustainability reporting, in each case with respect to sustainability related financial disclosures and the non-financial disclosures that are subject to audit or assurance based on the recommendation of the Audit Committee, and recommends the report(ing) to the Board of Directors for approval, and where applicable, for submission for approval to the Annual General Meeting. It also reviews sustainability-related aspects in the Compensation Report and makes a recommendation regarding the approval to the Compensation & Nomination Committee.
A detailed description of the duties can be found in the Sustainability Committee Charter, which is available on the Company’s website.
The Sustainability Committee met at least once per year until the year 2022. As of 2023, the Sustainability Committee will meet as often as business requires, but at least three times a year. One regularly convened meeting took place in the reporting year and lasted about two hours. The CEO, the CFO and the whole Board of Directors attended this meeting. No external consultants were present at this meeting. All minutes of the Sustainability Committee are made available to all members of the Board of Directors. The chairman of the Sustainability Committee also reports to the Board of Directors after each meeting of the Sustainability Committee in the form of a brief summary of the Sustainability Committee’s activities and findings.
In order to achieve effective sustainability governance, an additional committee has been created at the Group Management level. In this sense, the Executive Sustainability Committee is an agile body whose members act as sustainability experts on behalf of the Group Management. In addition, the Sustainability Leadership Team is a cross-functional body at Group level that meets regularly and is composed of various functions, chaired by the Head of Group Sustainability.
Annual performance evaluation
The Board of Directors and its permanent Committees undertake an annual self-evaluation of their performance. In the course of this self-evaluation, they are supported accordingly by the Compensation & Nomination Committee.