5. Governance

The Board of Directors determines the strategic objectives and the general resources for achieving these, and decides on major business transactions. For details about the internal organisation of the Board of Directors and its committees, see Business Report > Corporate Governance > Board of Directors > Internal organisational structure.

The operating management structure of Geberit is broken down into six Group Executive Areas:

• CEO Division
• Sales Europe
• Sales International
• Marketing & Brands
• Products & Operations
• Finance

The assignment of clearly distinguished responsibilities minimises the number of interfaces. For more details about the organisational structure, see Business Report > Management structure.

The Board of Directors determines the strategy. This includes the corporate strategy, see Business Report > Business and financial review > Strategy and goals > Strategy and the Sustainability strategy. To the extent legally permissible and in accordance with the Organisational Regulations, the Board of Directors has assigned the operational management and the implementation of the strategy to the Chief Executive Officer. Within the operational management structure, responsibility for specific economic, environmental and social issues is delegated further, see Business Report > Management structure.

At every meeting, the members of the Group Executive Board inform the Board of Directors of current business developments and major business transactions of the Group or Group companies. Between meetings, the Board of Directors is comprehensively informed in writing about current business developments and the company’s financial situation on a monthly basis.

The Board of Directors determines the strategic objectives and the general resources for achieving these, and decides on major business transactions. Within the operational management structure, responsibility is determined for specific economic, environmental and social issues, see GRI 102-18. The responsible individuals report either directly to the CEO (including Corporate Human Resources, Corporate Communications and Investor Relations, Strategic Planning), or to other members of the Group Executive Board.

The way in which the topic of sustainability is approached has been further developed regularly within the company. For over 25 years, Geberit has had an Environment and Sustainability department, which has been reporting directly to the CEO for more than 15 years. Since 2020, this department has also been responsible for Group-wide process management as well as ISO certification. Among other things, it coordinates the further development of the sustainability strategy and related activities, although the responsibility for planning and implementation lies within the individual areas themselves.

For the participatory rights of the shareholders, see Business Report > Corporate Governance > Participatory rights of the shareholders.

There is no employee representative on the Board of Directors. The employee representatives of the European sites meet regularly with a member of the Group Executive Board and the Head Corporate Human Resources. Selected concerns can be addressed to the Board of Directors through this channel.

At the end of 2020, the Board of Directors was composed of six non-executive, independent members. In April 2020, Werner Karlen became the latest person to join the Board of Directors. The composition of the Board of Directors should reflect strategic requirements, the company’s targets, geographical presence and corporate culture. The Board of Directors should be diverse in every respect, i.e. in terms of gender, nationality, geographical/regional experience and business experience. With two women on the Board of Directors, the proportion of females is more than 30%. Albert M. Baehny is Chairman of the Board of Directors. All of the committees formed by the Board of Directors are comprised exclusively of independent members. For further details, see Business Report > Corporate Governance > Board of Directors.

Christian Buhl is Chief Executive Officer (CEO) and Chairman of the Board of Directors is Albert M. Baehny. For further details, see Business Report > Corporate Governance > Board of Directors.

With regard to the election and terms of office of members of the Board of Directors, see Business Report > Corporate Governance > Board of Directors > Elections and terms of office.

Detailed information on all members of the Board of Directors, including their memberships in other organisations, can be found in Business Report > Corporate Governance > Board of Directors.

The Articles of Incorporation and Organisational Regulations of the Board of Directors stipulate how conflicts of interest of members of the Board of Directors are avoided. The members of the Board of Directors are obliged to refrain from involvement in the handling of matters affecting either their personal interests or those of a company with which they have an affiliation. This obligation to refrain from involvement has no influence on the requirements for a quorum when passing resolutions. Business dealings between the company and governing bodies or related parties are subject to the principle of conclusion at conditions as with independent third parties.

Geberit’s long-standing success is based on the fact that the Board of Directors and the Group Executive Board pursue a long-term perspective. The Board of Directors and Group Executive Board have defined and adopted key mission statements and principles such as the Geberit Compass and the Geberit Code of Conduct, see GRI 102-16. The Board of Directors determines the corporate strategy. The sustainability strategy is examined and approved by the Board of Directors and the Group Executive Board, see GRI 102-29.

Internal business processes are designed to ensure continuous improvement and innovation. These values are closely associated with the Geberit brand. At the same time, stakeholder concerns are taken seriously, and the Group Executive Board and Board of Directors receive feedback and input for the continued development of the sustainability strategy from the external Stakeholder Panel, for example.

Every year, the Board of Directors undertakes at least one assessment of the way in which it works together. This includes an assessment of how well-informed the members of the Board of Directors are about the Group and its business performance, see Organisational Regulations of the Board of Directors.

Geberit’s long-standing success is based on the fact that the Board of Directors and the Group Executive Board pursue a long-term perspective, thus enabling the company to demonstrate its performance clearly in areas including sustainability. There is no formal procedure for assessing the performance of the Board of Directors from an integrated sustainability perspective. As part of the annual review of the sustainability strategy, findings are discussed and areas where action is needed are determined, see GRI 102-29.

Geberit’s remuneration policy states that remuneration programmes must be balanced between the reward of short-term success and long-term value creation. For information about the remuneration of the management bodies, see Business Report > Remuneration Report.

The Sustainability strategy is examined and approved by the Board of Directors and the Group Executive Board. Results and the achievement of objectives are submitted to the Board of Directors and to the Group Executive Board for verification at least once annually. This also comprises the Communication on Progress UN Global Compact and the Geberit Compliance Report, including the audit results with respect to the Code of Conduct. Key figures on occupational safety are presented quarterly to the Group Executive Board and on a regular basis to the Board of Directors.

In 2020, Geberit consulted an external Stakeholder Panel for the fifth time. Its mandate consisted of providing feedback on the materiality analysis, sustainability performance, sustainability strategy and sustainability communication as well as on opportunities and risks associated with climate change. This input is used for the strategic review and continued development of the company. The next stakeholder panel is planned for 2022.

Based on the Organisational Regulations of the Board of Directors, the Audit Committee has implemented a comprehensive system for monitoring and controlling the risks linked to the business activities. This process includes risk identification, analysis, control and reporting.

Operationally, the Group Executive Board is responsible for controlling risk management. In addition, responsible persons are designated in the company for significant individual risks. These responsible parties decide on specific actions for risk mitigation and monitor their implementation. Every other year, the Internal Audit Department issues a risk report for the attention of the Board of Directors. Significant risks are also constantly discussed in the meetings of the Board of Directors and Group Executive Board, which take place on a regular basis. In the reporting year, the risk management process was reviewed and approved by an external auditing company.

For an overview of the Geberit compliance topics, see Business Report > Business and financial review > Financial Year 2020 > Compliance.

The impacts, risks and opportunities are discussed and reviewed by the Board of Directors and the Group Executive Board annually in connection with the sustainability reporting and the sustainability strategy.

Sustainability reporting is examined and approved by the Board of Directors and Group Executive Board as part of the integrated annual report. In doing so, attention is paid that all material aspects are covered.

The Board of Directors is available at any time to address the concerns of stakeholders and shareholders.

Matters brought forward by shareholders within the context of the General Meeting are dealt with in accordance with the Articles of Incorporation. No matters were submitted directly to the Board of Directors outside the General Meeting in 2020.

Geberit publishes a detailed annual Remuneration Report, which discloses the precise points of its remuneration policy, see Business Report > Remuneration Report. Geberit has undertaken to integrate targets and measures concerning environmental protection, social responsibility and good corporate governance, also known as “Environmental, Social and Governance” (ESG) criteria, into the remuneration of the Group Executive Board from 2022.

Geberit publishes a detailed annual Remuneration Report, which discloses the precise points of remuneration paid to the Board of Directors and Group Executive Board, see Business Report > Remuneration Report.

The remuneration to the Board of Directors and Group Executive Board disclosed in the detailed remuneration report addresses the concerns of stakeholders and shareholders, see Business Report > Remuneration Report.

The ratio of the annual remuneration paid to the highest-paid employee to the average annual remuneration of all employees (excluding the highest-paid employee) was 26.1 in Switzerland, 5.6 in Germany, 3.5 in Austria and 4.8 in Italy.

The ratio of the percentage increase in annual remuneration paid to the highest-paid employee to the level of the percentage increase in annual remuneration for all employees (excluding the highest-paid employee) for 2020 cannot be reproduced as a figure. This is because the salaries of the highest-paid employees partly decreased whereas the annual remuneration paid to the rest of the workforce slightly increased.