The Board of Directors of Swisscom Ltd currently comprises nine members, none of whom holds or has held an executive role within the Swisscom Group in any of the three business years prior to the period under review. The Board members have no significant commercial links with Swisscom Ltd or the Swisscom Group. The Swiss Confederation, represented on the Board by Hans Werder, is the majority shareholder. Customer and supplier relationships exist between the Swiss Confederation and Swisscom. Details of these are given in Note 37 to the consolidated financial statements.
Members of the Board of Directors at 31 December 2014 are as follows:
Name | Year of birth | Function | Taking office at the Annual General Meeting | Appointed until Annual General Meeting | ||||
|---|---|---|---|---|---|---|---|---|
| Hansueli Loosli 1, 2, 3, 4, 5 | 1955 | Chairman | 2009 | 2015 | ||||
| Frank Esser 1 | 1958 | Member | 2014 | 2015 | ||||
| Barbara Frei 7 | 1970 | Member | 2012 | 2015 | ||||
| Hugo Gerber 2 | 1955 | Member, representative of the employees | 2006 | 2015 | ||||
| Michel Gobet 1 | 1954 | Member, representative of the employees | 2003 | 2015 | ||||
| Torsten G. Kreindl 3, 6 | 1963 | Member | 2003 | 2015 | ||||
| Catherine Mühlemann 1 | 1966 | Member | 2006 | 2015 | ||||
| Theophil Schlatter 3, 8 | 1951 | Deputy Chairman | 2011 | 2015 | ||||
| Hans Werder 2, 3, 9 | 1946 | Member, representative of the Confederation | 2011 | 2015 | ||||
1 Member of the Finance Committee. | ||||||||
2 Member of the Audit Committee. | ||||||||
3 Member of the Remuneration Committee (Hansueli Loosli without voting rights). | ||||||||
4 Since 21 April 2009 Member of the Board of Directors, since 1 September 2011 Chairman. | ||||||||
5 Chairman of Nomination Committee (ad hoc). | ||||||||
6 Chairman of Finance Committee. | ||||||||
7 Chairwoman of Remuneration Committee. | ||||||||
8 Chairman of Audit Committee. | ||||||||
9 Designated by the Swiss Confederation. | ||||||||
Details on the qualifications and career of each member of the Board of Directors are provided below. This section also discloses the mandates of each Board member outside the Group as well as other significant activities such as permanent functions in important interest groups.
Pursuant to the Articles of Incorporation, the Board members may perform no more than three additional mandates in listed companies and no more than ten additional mandates in non-listed companies, with a total of no more than ten such additional mandates being permitted. These numerical restrictions shall not apply to mandates performed by a Board member by order of Swisscom or to mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations. The number of these mandates is, however, limited to seven or ten. Prior to accepting new mandates outside the Swisscom Group, the Board members are obligated to consult the Chairman of the Board of Directors. Details on the regulation of external mandates, in particular the definition of the term “mandate” and information on other mandates that do not fall under the aforementioned numerical restrictions for listed and non-listed companies, are set out in the Articles of Incorporation (Article 8.3 of the Articles of Incorporation), which can be accessed on the Swisscom website under “Basic principles”.
No member of the Board of Directors exceeds the set limits for mandates.
Hansueli Loosli
Swiss citizen
Education: Commercial apprenticeship; Swiss Certified Expert in Financial Accounting and Controlling
Career history: 1982–1985 Mövenpick Produktions AG, Adliswil, Controller and Deputy Director; 1985–1992 Waro AG, Volketswil, latterly as Managing Director; 1992–1996 Coop Switzerland, Wangen, Director of Non-Food Product Procurement; 1992–1997 Coop Zurich, Zurich, Managing Director; 1997–2000 Coop Switzerland, Basel, Chairman of the Executive Committee and Coop Group Executive Committee; January 2001–August 2011 Coop Genossenschaft, Basel, Chairman of the Executive Committee
Mandates in listed companies: Chairman of the Board of Directors, Bell AG, Basel
Mandates in non-listed companies: Chairman of the Board of Directors, Coop-Gruppe Genossenschaft, Basel; Chairman of the Board of Directors, Transgourmet Holding AG, Basel; Chairman of the Board of Directors, Coop Mineraloel AG, Allschwil; member of the Advisory Board, Deichmann SE, Essen; member of the Board of Directors, Heinrich Benz AG, Weiach
Mandates by order of Swisscom: Member of the Board of Directors and Executive Committee of economiesuisse
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
Frank Esser
German citizen
Education: PhD in business administration, Dr. rer. pol.
Career history: 1988–2000 Mannesmann Deutschland, latterly from 1996 as a member of the Executive Board, Mannesmann Eurokom; 2000-2005 Société Française Radiotéléphonie (SFR), Chief Operating Officer (COO), from 2002 CEO; 2005–2012 Vivendi Group, member of the Group Executive Board
Mandates in listed companies: Member of the Board of Directors, AVG Technologies N.V., Amsterdam; member of the Supervisory Board, Rentabiliweb Group S.A.S., Brussels; member of the Board of Directors, InterXion Holding N.V., Amsterdam, since June 2014
Mandates in non-listed companies: –
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
Barbara Frei
Swiss citizen
Education: Degree in mechanical engineering, ETH; doctorate (Dr. sc. techn.), ETH; Master of Business Administration, IMD Lausanne
Career history: Since 1998 various managerial positions in the ABB Group, in particular 2008–2010 ABB s.r.o., Prague, Country Manager; 2010–2013 ABB S.p.A., Sesto San Giovanni, Country Manager and Regional Manager Mediterranean; since November 2013 Drives and Control Unit, Managing Director
Mandates in listed companies: –
Mandates in non-listed companies: Member of the Board of Directors, ABB Beijing Drive Systems Co. Ltd., Beijing
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
Hugo Gerber
Swiss citizen
Education: Diploma in postal services; IMAKA management programme; diploma in personnel and organisational development, Solothurn University of Applied Sciences, Northwestern Switzerland
Career history: 1986–1990 Swiss Association of Christian Postal Workers (ChPTT), Central Secretary; 1991–1999 Association of the unions of the Christian transport and government personnel (VGCV), General Secretary; 2000–2003 Transfair Union, General Secretary; 2003–2008 Transfair Union, Chairman; since 2009 independent consultant; July to December 2014 Federal Administrative Court, St. Gallen, Deputy Head of Human Resources on an ad interim basis
Mandates in listed companies: –
Mandates in non-listed companies: Member of the Board of Directors, POSCOM Ferien Holding AG, Berne
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: Member of the Board of Trustees, RUAG Pension Fund, Berne
Other significant activities: Member of the Board of Directors, Worklink AG, Berne
Michel Gobet
Swiss citizen
Education: Degree in history
Career history: PTT Union, General Secretary and Deputy General Secretary; since 1999 syndicom Trade Union, Central Secretary
Mandates in listed companies: –
Mandates in non-listed companies:Member of the Board of Directors, Swiss Post Ltd, Berne; member of the Board of Directors, GDZ AG, Zurich; member of the Board of Directors, Swiss Travel Fund (Reka) Cooperative, Berne
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: Member of the World Executive Committee, the European Executive Committee and the European ICTS Steering Committee, UNI Global Union, Nyon
Torsten G. Kreindl
Austrian citizen
Education: Doctorate in industrial engineering (Dr. techn.)
Career history: Chemie Holding AG; W. L. Gore & Associates Inc.; Booz Allen & Hamilton, member of the Management Board, Germany; 1996–1999 Deutsche Telekom AG CEO, Broadband Cable Business, and CEO, MSG Media Services; 1999–2005 Copan Inc., Partner; since 2005, Grazia Group Equity GmbH, Stuttgart, Germany, Partner
Mandates in listed companies: Independent Director of Hays plc, London
Mandates in non-listed companies: Member of the Supervisory Board, Pictet Digital Communications/Pictet Fund Management, Geneva; member of the Board of Directors, Starboard Storage Systems Inc., Boulder, Colorado, USA
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
Catherine Mühlemann
Swiss citizen
Education: Lic. phil I; Swiss Certified PR Consultant
Career history:1994–1997 Swiss Television DRS, Head of Media Research; 1997–1999 SF1 and SF2, programme researcher; 1999–2001 TV3, programme director; 2001–2003 MTV Central, Managing Director; 2003–2005 MTV Central & Emerging Markets, Managing Director; 2005–2008 MTV Central & Emerging Markets and Viva Media AG (Viacom), Managing Director; since 2008 Andmann Media Holding GmbH, Baar, partner, until December 2012 owner
Mandates in listed companies: –
Mandates in non-listed companies: Member of the Supervisory Board, Messe Berlin GmbH, until June 2014; member of the Board of Directors of Switzerland Tourism; member of the Supervisory Board, Tele Columbus AG, Berlin, since September 2014
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
Theophil Schlatter
Swiss citizen
Education: Degree in business administration (lic. oec. HSG); Swiss Certified Public Accountant
Career history: 1979–1985 STG Coopers & Lybrand, public accountant; 1985–1991 Holcim Management und Beratung AG, controller; 1991–1995 Sihl Papier AG, CFO and member of the Executive Committee; 1995–1997 Holcim (Switzerland) Ltd, Head of Finance/Administration and member of the Executive Committee; 1997–March 2011 Holcim Ltd., CFO and member of the Group Executive Board
Mandates in listed companies: –
Mandates in non-listed companies: Chairman of the Board of Directors, PEKAM AG, Mägenwil; member of the Board of Directors, Schweizerische Cement-Industrie-Aktiengesellschaft, Rapperswil-Jona
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
Hans Werder
Swiss citizen
Education: Dr. rer. soc.; lic. iur.
Career history: 1987–1996 Berne Directorate of Public Works, Transport and Energy (BVE), General Secretary; 1996–2010 Federal Department of the Environment, Transport, Energy and Communications (DETEC), General Secretary
Mandates in listed companies: –
Mandates in non-listed companies: Member of the Board of Directors, BLS AG, Berne
Mandates by order of Swisscom: –
Mandates in interest groups, charitable associations, institutions and foundations as well as employee benefit foundations: –
Other significant activities: –
With the exception of the representative of the Swiss Confederation, the Board of Directors of Swisscom Ltd is elected by shareholders at the Annual General Meeting. Under the terms of the Articles of Incorporation it may comprise between seven and nine members, and, if necessary, the number can be increased temporarily. It currently comprises nine members. The Annual General Meeting elects the members and the Chairman of the Board of Directors and the members of the Compensation Committee individually for a term of one year. The term of office runs until the conclusion of the following Annual General Meeting. It is possible to be re-elected. If the office of the Chairman is vacant or the number of members of the Compensation Committee falls below the minimum number of three members, the Board of Directors nominates a chairman from among its members or appoints the missing member(s) of the Compensation Committee to serve until the conclusion of the next Annual General Meeting. Otherwise, the Board of Directors constitutes itself. The maximum term of office for members elected by the Annual General Meeting is generally a total of twelve years. Members who reach the age of 70 retire from the Board as of the date of the next Annual General Meeting.
Under the Articles of Incorporation of Swisscom Ltd, the Swiss Confederation is entitled to appoint two representatives to the Board of Directors of Swisscom Ltd. Hans Werder is currently the sole representative. The maximum term of office or age limit for the federal representative is determined by the Federal Council. Under the terms of the Telecommunications Enterprise Act (TEA), employees must be granted appropriate representation on the Board of Directors of Swisscom Ltd. The Articles of Incorporation also stipulate that the Board of Directors must include two employee representatives. These are currently Hugo Gerber and Michel Gobet.
The Board of Directors is convened by the Chairman and meets as often as business requires. If the Chairman is unavailable, the meeting is convened by the Vice Chairman. The CEO and CFO Swisscom Ltd are regularly invited to the meetings of the Board of Directors. The Chairman sets the agenda. Any Board member may request the inclusion of further items on the agenda. Board members receive documents prior to the meeting to allow them to prepare for the items on the agenda. The Board of Directors may invite members of the Group Executive Board, senior employees of Swisscom, auditors or other internal and external experts to attend its meetings on specific issues in order to ensure appropriate reporting to members of the Board. Furthermore, the Chairman of the Board of Directors and the CEO report to each meeting of the Board of Directors on particular events, on the general course of business and major business transactions, as well as on any measures that have been implemented.
The Board of Directors has three standing committees and one ad hoc committee tasked with carrying out detailed examinations of matters of importance. The committees usually consist of three to six members. Each member of the Board of Directors also sits on at least one of the standing committees. Subject to being appointed to the Compensation Committee (without voting rights), the Chairman is a member of all standing committees; they all are chaired by other Board members, however. The latter brief the Board of Directors on the committee meetings held. All members of the Board of Directors also receive copies of all Finance and Audit Committee meeting minutes. The duties and responsibilities of the Board of Directors are defined in the Organisational Regulations, those of the standing committees in the relevant committee regulations, which can be accessed on the Swisscom website under “Basic principles”.
The Board of Directors and the committees conduct self-assessments, usually once a year. New members are given a task-specific introduction to their new activity. The Board of Directors supports ongoing education for Board members. A one-day mandatory training course was held at the beginning of 2014. Each quarter, the members of the Board of Directors also had the opportunity to explore in-depth the upcoming challenges facing the Group and business divisions as part of so-called company experience days. In addition, various members of the Board of Directors attended selected presentations and seminars during the year. Wherever possible, the Board of Directors attends the Swisscom Group’s annual management meeting.
The following table gives an overview of the Board of Directors’ meetings, conference calls and circular resolutions taken in 2014.
| Meetings | Conference calls | Circular resolutions | ||||
|---|---|---|---|---|---|---|
| Total | 10 | 3 | 1 | |||
| Average duration (in hours) | 8:10 | 0:50 | – | |||
| Participation: | ||||||
| Hansueli Loosli, Chairman | 10 | 3 | 1 | |||
| Frank Esser 1 | 7 | 2 | 1 | |||
| Barbara Frei | 10 | 3 | 1 | |||
| Hugo Gerber | 10 | 3 | 1 | |||
| Michel Gobet | 10 | 3 | 1 | |||
| Torsten G. Kreindl | 10 | 3 | 1 | |||
| Catherine Mühlemann | 9 | 3 | 1 | |||
| Richard Roy 2 | 3 | 1 | – | |||
| Theophil Schlatter | 10 | 3 | 1 | |||
| Hans Werder | 10 | 3 | 1 | |||
1 Elected as of 7 April 2014. | ||||||
2 Resigned as of 7 April 2014. | ||||||
Torsten G. Kreindl is Chairman of the Finance Committee; the other members are Frank Esser, Michel Gobet, Hansueli Loosli and Catherine Mühlemann. The CEO, CFO and the Head of Group Strategy & Board Services usually attend meetings of the Finance Committee. Depending on the agenda, other members of the Group Executive Board, the Management Boards of the strategic Group companies or project managers are also called upon to attend the meetings. The Committee prepares materials for the attention of the Board of Directors on transaction-related matters, for example, in connection with establishing or dissolving significant Group companies, acquiring or disposing of significant shareholdings, or entering into or terminating strategic alliances. The Committee also acts in an advisory capacity on matters relating to major investments and divestments. The Finance Committee has the ultimate decision-making authority when it comes to approving rules of procedure and directives in the areas of Mergers & Acquisitions and Corporate Venturing. Details of the Committee’s activities are set out in the Finance Committee Rules of Procedure, which can be accessed on the Swisscom website under “Basic principles”.
The following table gives an overview of the Finance Committee’s meetings, conference calls and circular resolutions taken in 2014.
| Meetings | Conference calls | Circular resolutions | ||||
|---|---|---|---|---|---|---|
| Total | 3 | – | – | |||
| Average duration (in hours) | 2:50 | – | – | |||
| Participation: | ||||||
| Torsten G. Kreindl, Chairman | 3 | – | – | |||
| Frank Esser 1 | 2 | – | – | |||
| Michel Gobet | 3 | – | – | |||
| Hansueli Loosli | 3 | – | – | |||
| Catherine Mühlemann | 3 | – | – | |||
1 Elected as of 7 April 2014. | ||||||
The Audit Committee is chaired by Theophil Schlatter, who is a financial expert; other members are Hugo Gerber, Hansueli Loosli and Hans Werder, representative of the Swiss Confederation. The CEO, CFO, Head of Accounting, Head of Internal Audit and the external auditors also attend the Audit Committee meetings. Depending on the agenda, other management members are called upon to attend. The Audit Committee is also authorised to involve independent third parties such as lawyers, public accountants and tax consultants. The members of the Audit Committee neither work nor have worked for Swisscom in an executive capacity, nor do they maintain any significant commercial links with Swisscom Ltd or the Swisscom Group. Customer and supplier relationships exist between the Swiss Confederation and Swisscom. Details of these are given in Note 37 to the consolidated financial statements. The majority of members are experienced in the fields of finance and accounting.
The Audit Committee handles all financial management business (for example, accounting, financial controlling, financial planning and financing), assurance (risk management, the internal control system, compliance and the internal audit) and the external audit. It also handles matters dealt with by the Board of Directors that call for specific financial expertise (the dividend policy, for example). The Committee is therefore the Board of Directors’ most important controlling instrument and is responsible for monitoring the Group-wide assurance functions. It formulates positions on business matters which lie within the decision-making authority of the Board of Directors and has the final say on those business matters for which it has the corresponding competence. Details of the Committee’s activities are set out in the Audit Committee Rules of Procedure, which can be accessed on the Swisscom website under “Basic principles”.
The following table gives an overview of the Audit Committee’s meetings, conference calls and circular resolutions taken in 2014.
| Meetings | Conference calls | Circular resolutions | ||||
|---|---|---|---|---|---|---|
| Total | 5 | – | – | |||
| Average duration (in hours) | 5:20 | – | – | |||
| Participation: | ||||||
| Theophil Schlatter, Chairman | 5 | – | – | |||
| Hugo Gerber | 5 | – | – | |||
| Hansueli Loosli | 5 | – | – | |||
| Richard Roy 1 | 1 | – | – | |||
| Hans Werder | 5 | – | – | |||
1 Resigned as of 7 April 2014. | ||||||
For information on the Compensation Committee, refer to the section “Remuneration Report”.
The Nomination Committee is formed on an ad hoc basis for the purpose of preparing the groundwork for electing new members to the Board of Directors and the Group Executive Board. The Committee is presided over by the Chairman and the composition is determined on a case-by-case basis. The Committee carries out its work based on a specific requirements profile defined by the Board of Directors and presents suitable candidates to the Board of Directors. The Board of Directors elects the members of the Group Executive Board or submits the proposal for presentation to the Annual General Meeting for the election and approval of members of the Board of Directors. No Nomination Committee meetings were held in the 2014 financial year.
The Telecommunications Enterprise Act (TEA) makes reference to the Swiss Code of Obligations in respect of the non-transferable and irrevocable duties of the Board of Directors of Swisscom Ltd. Pursuant to Article 716a of the Code of Obligations, the Board of Directors is responsible first and foremost for the overall management and supervision of persons entrusted with managing the company’s operations.
It decides on the appointment and removal of members of the Group Executive Board of Swisscom Ltd. The Board of Directors also determines the strategic, organisational, financial planning and accounting guidelines, taking into account the four-year targets set by the Federal Council in accordance with the provisions of the Telecommunications Enterprise Act (TEA) and the will of the Swiss Confederation in its role as principal shareholder.
The Board of Directors has delegated day-to-day business management to the CEO in accordance with the TEA, the Articles of Incorporation and the Organisational Regulations. In addition to its statutory duties, the Board of Directors decides on business transactions of major importance to the Group, such as the acquisition or disposal of companies with a financial exposure in excess of CHF 20 million, or investments or divestments with a financial exposure in excess of CHF 50 million. The division of powers between the Board of Directors and the CEO is set out in annex 2 to the Organisational Regulations (see function table in the Rules of Procedure and Accountability), which can be accessed on the Swisscom website under “Basic principles”.
The Chairman of the Board of Directors and the CEO meet once or twice a month to discuss fundamental issues concerning Swisscom Ltd and its Group companies. The CEO also reports in detail at each ordinary meeting of the Board of Directors on the general course of business, major events and any measures taken. The Board of Directors also receives a monthly report on all key performance indicators relating to the Group and all segments containing important Group companies. In addition, the Board of Directors receives quarterly detailed information on the course of business and on the financial position, results of operations, cash flows and risk position of the Group and the segments. It also receives projections for the income statement, cash flow statement and balance sheet for the current financial year. Internal financial reporting is carried out in accordance with the same accounting principles and standards as external reporting. Reporting also includes key non-financial information for controlling and steering purposes. Each member of the Board of Directors is entitled to request information on any matters relating to the Group at any time, provided this does not conflict with any abstention provisions or confidentiality obligations. The Board of Directors is informed immediately of any events of an exceptional nature.
The Board of Directors deals with the oral and written reports of the assurance functions of risk management, the financial reporting internal control system (ICS) and compliance management once a year. The Audit Committee examines the reports of the Risk Management unit, the ICS and Internal Audit on a quarterly basis. In urgent cases the Chairman of the Audit Committee is informed without delay about any significant new risks. He is also informed in a timely manner if there is a significant change in assessed compliance or ICS risks or if serious breaches in compliance (including violation of rules that are designed to ensure reliable financial reporting) are detected or currently being investigated.
The Board of Directors is responsible for establishing and monitoring the Group-wide assurance functions of risk management, the internal control system, compliance and internal audit.
The Board of Directors aims to safeguard the company’s enterprise value through the implementation of Group-wide risk management. A risk-aware corporate culture is designed to support the achievement of this objective. Swisscom has therefore implemented a Group-wide and central risk management system based on COSO II and ISO 31000. It maintains level-appropriate and comprehensive reporting and appropriate documentation. The objective is to identify, assess and address significant risks in good time. To this end, the central Risk Management unit collaborates closely with the Controlling department, the Strategy department, other assurance functions and line functions. Swisscom assesses its risks according to their probability of occurrence and their quantitative effects in the event of occurrence. It manages these risks on the basis of a risk strategy and evaluates the risks in terms of their impact on key performance indicators reported by Swisscom. Swisscom reviews and updates its risk profile on a quarterly basis. The Audit Committee and the Group Executive Board are informed about significant risks, their potential effects and the status of remedial measures on a quarterly basis, and the Board of Directors on an annual basis. Significant risk factors are described in the Risks section of the Management Commentary.
The internal control system (ICS) ensures the reliability of financial reporting with an appropriate degree of assurance. It acts to prevent, uncover and correct substantial errors in the consolidated financial statements, the financial statements of the Group companies and the Remuneration Report. The ICS encompasses the following internal control components: control environment, assessment of financial statement accounting risks, control activities, monitoring activities, information and communication. A central ICS team assigned to Group Business Steering and Internal Audit periodically monitors the existence and effectiveness of the ICS. Significant shortcomings in the ICS identified during the monitoring activities are reported together with the corrective measures in a status report to the Audit Committee on a quarterly basis and to the Board of Directors on an annual basis. Corrective measures to remedy shortcomings are monitored centrally. The Audit Committee assesses the performance and reliability of the ICS on the basis of the periodic reporting.
The Board of Directors has set the objective of protecting the Swisscom Group, its executive bodies and employees against legal sanctions, financial losses and reputational damage by ensuring Group-wide compliance. A corporate culture which promotes the willingness to behave in a way that complies with the relevant regulations should support the achievement of this objective. Swisscom has therefore implemented a Group-wide and central compliance system based on COSO II and IDW PS 980 (principles for the proper auditing of compliance management systems, 2011). Within the framework of the system, Group Compliance each year identifies areas of legal compliance using a risk-based approach which require monitoring by the central system. Within these areas of legal compliance, the business activities of the Group companies are reviewed in a periodic and proactive manner in order to identify risks in good time and determine the required measures. The employees affected are informed of these measures and their implementation is monitored. The suitability and effectiveness of the system is reviewed annually by Group Compliance. Within the Health business division (Curabill) of Swisscom Switzerland Ltd and in the area of billing for added-value services, an audit of the implemented measures is also performed by external auditors (financial intermediation). Group Compliance informs the Risk Management unit of identified significant risks on a quarterly basis and reports to the Audit Committee and the Board of Directors each year on its activities and risk assessments. Should there be significant changes in the risk assessment or if serious breaches are identified, the Chairman of the Audit Committee is informed in a timely manner.
Internal auditing is carried out by the Internal Audit unit. Internal Audit supports the Swisscom Ltd Board of Directors and its Audit Committee in fulfilling their statutory and regulatory supervisory and controlling obligations. Internal Audit also supports management by highlighting areas of potential for improving business processes. It documents the audit findings and monitors the implementation of measures.
Internal Audit is responsible for planning and performing audits throughout the Group in compliance with professional auditing standards. It conducts an objective evaluation and audit of the appropriateness, efficiency and effectiveness of, in particular, the governance and control systems of the operational processes as well as the assurance functions of risk management, the internal control system and compliance management in all organisational units of the Swisscom Group.
Internal Audit possesses maximum independence. Organisationally it is under the control of the Chairman of the Board of Directors and reports to the Audit Committee. At its meetings, and at least on a quarterly basis, the Audit Committee is briefed on audit findings and the status of any corrective measures implemented. In addition to ordinary reporting, Internal Audit also informs the Audit Committee of any irregularities which come to its attention.
Internal Audit liaises closely and exchanges information with the external auditors. The external auditors have unrestricted access to the audit reports and audit documents of Internal Audit. Internal Audit closely coordinates audit planning with the external auditors. The integrated strategic audit, which includes the coordinated annual plan of both the internal and external auditors, is prepared annually on the basis of a risk analysis and presented to the Audit Committee for approval. Independently of this audit, the Audit Committee can commission special audits based on information received on the whistle-blowing platform operated by Internal Audit. This reporting procedure approved by the Audit Committee ensures the anonymous and confidential receipt and handling of objections raised relating to external reporting, financial reporting and assurance function issues. The Chairman of the Board of Directors and the Chairman of the Audit Committee are informed of notifications received and a report is drawn up at least once a year for the Audit Committee.
