Governance

Alpiq’s highest governance body is the Board of Directors (BoD), which consists of seven non-executive members. The BoD has delegated operational mana­gement of the company to the CEO, in alignment with the respective laws, the Articles of Association and the Organisational Regulations. The CEO chairs the Executive Board (EB), which has five executive members, namely the CEO, the CFO (Chief Financial Officer) and three business Division Heads, to whom the CEO has delegated some of her management respon­sibilities. The CEO and EB have issued regulations governing the assignment of authorities and responsibilities. These regulations apply throughout the Group.

In addition to the BoD and EB, the Audit and Risk Committee (ARC) and the Nomination, Remuneration and Strategy Committee (NRSC), each of which consists of three members of the BoD, are part of Alpiq’s administrative, management and supervisory bodies.

In Switzerland, the PEKO/COPE represents the common interests of employees at functional levels 1 to 10 (meaning employees who are not in top management functions) to the top management of Alpiq Holding AG. The members of the PEKO/COPE are freely elected by all employees of functional levels 1 to 10 in Switzerland. All employees of functional levels 1 to 10 in Switzerland may present themselves for election. As for employee representation in other countries, Alpiq complies with the local laws and regulations.

The members of the management and supervisory bodies are fully qualified for the tasks they are in charge of. Further information on the experience level of the BoD and EB is available in the chapters Board of Directors and Executive Board in the Corporate Governance section of this Annual Report.

At the end of 2024, the female to male ratio in the EB was 20% vs 80% re­spectively, with a ratio of 14% (female) to 86% (male) in the BoD. The three shareholder groups of Alpiq (each of which represents 33.3% of the share capital) have the right to make a proposal for two board members each. Election remains with the General Assembly.

The BoD nominates the members of the NRSC and the ARC, including their Chairs. Further rules are laid out in detail in the Organisational Regulations. The NRSC and the ARC prepare, control and steer major decisions in terms of their strategic (including sustainability), economic, and financial impact on the company. While the NRSC is responsible for strategy and sustainability and hence ESG targets (including sustainability impact and opportunity management), the ARC is responsible for ESG risks. Specific extraordinary meetings are regularly set up to allow pre-discussions with management. The BoD can request the Group Internal Audit to investigate or conduct a detailed audit on any subject matter at any time.

The ARC consists exclusively of non-executive members of the BoD, most of whom have finance and accounting experience. The ARC’s role is to support the BoD in assessing the performance of the external auditors, monitoring and assessing the internal auditors, the internal control system, financial accounting, risk management (including the management of ESG risks), compliance and corporate governance.

The NRSC is tasked with supporting the BoD in discharging its supervisory duty regarding succession planning (EB), determining and reviewing remuneration policy and guidelines as well as performance targets (including ESG targets), preparing proposals on the remuneration of the BoD and the EB on behalf of the Annual General Meeting (AGM), determining all other terms and conditions of employment of the members of the BoD and approving the other contract terms and conditions of employment for the CEO (as proposed by the Chairman of the BoD) and for the EB (as proposed by the CEO). In addition, the NRSC is in charge of pre-discussing the Group Strategy, prior to approval by the BoD, and moni­toring implementation of the strategy, as well as determining sustainability targets, including implementation of suitable reporting.

In summary, economic, environmental and social issues as well as decisions regarding sustainability are taken by the committees appointed by the BoD, upon the proposal of the EB. In addition to this, they are dealt with by the committees supporting the BoD, in particular the NRSC. Clear governance and procedures are defined to deal with sustainability matters, but they are not yet aligned with the identified Impacts, Risks and Opportunities (IRO).

ESG risks are currently being integrated into the company-wide enterprise risk management (ERM). This means that ESG risks will be treated the same as any other enterprise risks and the same risk management processes will apply, including the regular monitoring and development of actions by the ARC, EB and BoD. The further integration of impact, risk, and opportunity management into already existing management processes will be defined and developed in 2025.

As the CSRD implementation is still ongoing, targets pertaining to Alpiq’s material topics are currently under development. The setting of targets requires input from internal metric owners in the divisions. Their input is pre-discussed in the Sustainability Committee, a central coordination body for the sustainability matrix organisation, and targets are proposed based on these discussions. The Lead Group Sustainability presents the suggested targets in the EB, NRSC and BoD for approval.

The Lead Group Sustainability also conducts regular trainings for the EB and BoD on the topic of sustainability. The Lead Group Sustainability is highly familiar with Alpiq’s material topics and therefore relates the coaching to the relevant topics. There is no dedicated person in the EB and BoD responsible for sustainability; in each case the responsibility is shared in recognition of the fact that different members may bring different sustainability skills.

The Sustainability Report is compiled and edited under the lead of the EB in alignment with the Lead Group Sustainability and the NRSC, which may be involved during the editing phase. Once finalised, the EB submits the Sustainability Report to the BoD for approval.

At an operational level, Group Risk Management is mandated by the EB to monitor all market, credit and liquidity risks on an ongoing basis. Frequent Risk Management Committee meetings are conducted to assess the company’s current risk situation and decide on the operational measures to be taken. The EB is permanently informed of ongoing discussions via an online platform and in every EB meeting (on a fortnightly basis). As part of Group Risk Management, Enterprise Risk Management assesses risks for the going concern in a broader context. The ARC and BoD are informed twice per year of the current risk situation, or at any time as required by the current evolution of the business.

For each business opportunity, the potential and related risks are assessed by the relevant entities, such as Risk Management, Tax, Sustainability, Legal & Compliance, and a Know-Your-Customer (KYC) check is performed as standard and prior to any formal decision taken. Strategic opportunities are tracked by the EB in the context of the corporate strategy. Discussions on potential oppor­tunities and the way forward take place on a weekly basis.

Specific policies, actions, metrics and targets needed to address material IROs are currently under development.

For each business decision to be taken, the Regulation of Authority determines the level of required approval. In any case, whether the decision is taken by the Division Head, the EB or the BoD, a fully-fledged business plan and an assessment of all related risks and opportunities has to be available, including financial, tax, legal & compliance, sustainability and reputational risks and opportunities. For business cases to be approved by the relevant bodies, the prior consent and recommendation of the corresponding experts in Finance, Tax, Legal & Compliance, and Sustainability is required.

Sustainability considerations serve as a basis for the company’s strategic plan, the execution of which is a factor considered in the incentive schemes for the EB. As of 2024, the remuneration of the EB is linked to Long-Term Incentives (LTI), which include ESG criteria. The sustainability target “Successfully set up our sustainability organisation according to CSRD roadmap for 2024, incl. KPIs, targets etc.” is part of the EB’s targets for 2024. As sustainability is considered in the setup of the strategic plan and the execution of this plan has an impact on the BoD’s performance assessment, the assessment of the BoD’s performance is also indirectly linked to sustainability targets.

The terms of incentive schemes are approved and/or updated in the EB and NRSC, and, if required, by the BoD.

Further information on LTI and remuneration at Alpiq can be found in the chapter Remuneration in the Corporate Governance section of this Annual Report.

Alpiq is currently developing a framework for risk management in sustainability reporting, to be finalised in 2025. This is to ensure that the risk assessments and controls are in line with the prioritised risks and that the results are integrated into internal processes.

Oversight of the Sustainability Report will involve both the ARC and the NRSC. The ARC will focus on the adequacy of risk management and controls, while the NRSC will ensure compliance with ESG standards before approving the report. Periodic updates will be provided to management and supervisory bodies to ensure transparency and accountability.