Governance

The role of the administrative, management and supervisory bodies

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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 comprises five executive members: the CEO, the CFO (Chief Financial Officer), and three Business Division Heads, to whom the CEO has delegated certain management responsibilities. The CEO and EB have issued regulations governing the assignment of authorities and responsibilities, which apply throughout the Group.

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

In Switzerland, the PEKO/COPE represents the common interests of employees at functional levels 1 to 10 (i.e. employees who are not in top management functions) vis-à-vis the top management of Alpiq Holding AG. Members of the PEKO/COPE are freely elected by all employees at functional levels 1 to 10 in Switzerland, and all such employees are eligible to stand for election. As for employee representation in other countries, Alpiq complies with local laws and regulations.

The members of the management and supervisory bodies are fully qualified for the tasks entrusted to them. Further information on the experience of the BoD and the 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 2025, the female representation was 20% in the EB and 14% in the BoD. Each of the three shareholder groups of Alpiq (each representing 33.3% of the share capital) has the right to propose two board members for election by 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, oversee, and steer major decisions in terms of their strategic (including sustainability), economic, and financial impact on the company. While the NRSC is amongst other responsible for strategy and sustainability, including ESG target setting for the EB, the ARC is responsible for ESG risks. Specific extraordinary meetings are regularly convened to enable preliminary discussions with management. The BoD may request 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 expertise. Its 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 ESG risks), compliance, and corporate governance.

The NRSC is tasked with supporting the BoD in discharging its supervisory duty with regard to succession planning for the EB, determining and reviewing remuneration policies and guidelines as well as performance targets, and preparing proposals on the remuneration of the BoD and the EB for the Annual General Meeting (AGM). It also determines all other terms and conditions of employment for members of the BoD and approves contractual terms and conditions of employment for the CEO (as proposed by the Chairman of the BoD) and for EB members (as proposed by the CEO). In addition, the NRSC pre-discusses the Group Strategy prior to BoD approval, monitors its implementation, and determines sustainability targets, including the implementation of suitable reporting.

In summary, economic, environmental and social issues, as well as sustainability-related decisions, are taken by the committees appointed by the BoD based on proposals from the EB. In addition, these matters are further supported by the BoD committees, in particular the NRSC. While clear governance structures and procedures are in place for sustainability matters, they are not yet aligned with the identified Impacts, Risks and Opportunities (IRO).

ESG risks constitute a distinct risk category within Alpiq’s risk taxonomy and are integrated into the company-wide enterprise risk management (ERM) framework. These risks are assessed using the same process and governance as other ERM risks, ensuring consistency and comparability across the Group’s overall risk landscape. ESG risks are identified, assessed, and monitored in close coordination with the respective risk owners and are reviewed annually. All material ESG risks are regularly presented to the EB and the ARC. This process ensures that emerging sustainability-related risks are identified, evaluated, and managed consistently within the overall governance framework. ESG risk management follows a continuous improvement process aimed at strengthening the integration of IRO management across Alpiq, thereby supporting Alpiq’s commitment to enhanced oversight and strategic responses to sustainability-related risks and opportunities.

There is no dedicated member of the EB or the BoD solely responsible for sustainability; responsibility is shared in recognition of the diverse sustainability expertise contributed by different members.

Data collection for the Sustainability Report is ensured by the Sustainability Committee, which comprises representatives from Sustainability, Legal, IT, Risk Management, and Communications and is responsible for sustainability projects across the company. The Report is edited under the leadership 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.

Sustainability matters addressed by the undertaking’s administrative, management, and supervisory bodies

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On behalf of the EB, the Risk Management Committee (RMC) oversees the governance and control of risks across Alpiq. Group Risk Management supports the RMC in overseeing and developing the Alpiq Group’s risk management framework. The EB is regularly informed of ongoing discussions through an online platform and at each EB meeting, which take place fortnightly. As part of Integrated Assurance, Enterprise Risk Management assesses risks related to going concern in a broader context, allowing the EB to identify emerging concerns and adapt its strategy accordingly. An overview of the current risk situation is provided to both the ARC and the EB whenever required, and at least twice a year.

For each business opportunity, potential benefits and associated risks are assessed by the relevant functions—including Risk Management, Tax, Sustainability, and Legal & Compliance—and a KYC check is conducted as standard, ensuring informed, responsible, and compliant decision-making before any formal approval is granted. Strategic opportunities are tracked by the EB in the context of the corporate strategy, with discussions on potential opportunities and next steps taking place weekly.

For each business decision requiring approval, the Regulation of Authority determines the appropriate level of authorisation. Regardless of whether a decision is taken by a Division Head, the EB, or the BoD, a comprehensive business case must be presented, including a full assessment of relevant risks covering financial, tax, legal compliance, sustainability, and reputational risks. Prior review and endorsement by the relevant experts in Finance, Tax, Legal & Compliance, and Sustainability are mandatory before submission for approval.

Integration of sustainability-related performance in incentive schemes

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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, part of the remuneration of the EB is linked to annual Short-Term Incentives and Long-Term Incentives (LTI), covering three-year-turns. Since 2024, a sustainability target is a constant element of the LTI.

For 2024-2026 the target entails “Successfully set up our sustainability organisation according to CSRD roadmap for 2024, incl. KPIs, targets etc.”.

For 2025-2027 the target consists of two elements: 1) “Sustainability Reporting Target Operating Model (TOM) is fully implemented, covering the dimensions governance, processes, controls, technologies / systems, data management and people” and 2) “KPI Dashboard, allowing effective monitoring and steering”.

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.

Risk management and internal controls over sustainability reporting

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Oversight of the Sustainability Report involves both the ARC and the NRSC. The ARC focuses on the adequacy of risk management and controls, while the NRSC ensures compliance with ESG standards prior to approval of the report. Periodic updates are provided to management and supervisory bodies to ensure transparency and accountability.