Governance
GRI 2-9: Governance structure and composition
The governance principles and detailed set-up are defined in the Articles of Association and the Organisational Regulations. The highest governance body is the Board of Directors, consisting of seven non-executive members. The profiles and the other significant mandates of the members of the Board of Directors are published in the Annual Report 2023. The Board of Directors nominates the members of the Nomination, Remuneration and Strategy Committee (NRSC – Sustainability is included in Strategy) and the Audit and Risk Committee (ARC), including their Chairs. Further rules are laid out in detail in the Organisational Regulations.
GRI 2-10: Nomination and selection of the highest governance body
The members of the Board of Directors are elected annually by the shareholders at the ordinary Annual General Meeting, which takes place within six months after the end of the previous year. The candidates for the Board of Directors are proposed by the three shareholder groups, which each represent one third of the total share capital. The shareholders are responsible for ensuring gender diversity and the balanced set of skills required for the task as member of the Board of Directors. The members of the Board of Directors are elected for one year, until the next ordinary Annual General Meeting.
GRI 2-11: Chair of the highest governance body
The Board of Directors constitutes itself and elects the Chair and the Deputy Chair of the Board of Directors from among its members.
GRI 2-12: Role of the highest governance body in overseeing the management of impacts
In accordance with the Organisational Regulations, the Board of Directors, upon proposal by the CEO, decides on the corporate policies, the group strategy and long-term objectives, medium-term development programs, business policies and financial and risk policies. With a view to contributing to sustainability and security of supply, Alpiqʼs business decisions, such as investments, divestments or contracts are closely monitored with respect to legal and financial risks, financial impact, compliance and environmental impact. In accordance with the authority regulation, decisions are taken at division, Executive Board or Board of Directors level.
The NRSC and the ARC have to prepare, control and steer major management decisions regarding their impact on the company in terms of strategic, economic, financial and sustainability impact. Specific extraordinary meetings are commonly set up to allow pre-discussions with management.
The Board of Directors can request the Group Internal Audit at any time to investigate or conduct a detailed audit on any subject matter.
GRI 2-13: Delegation of responsibility for managing impacts
The Board of Directors 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 leads the Executive Board, which consists of the CEO, the Chief Financial Officer (CFO) and three business division heads. All members of the Executive Board are nominated by the Board of Directors. The CEO, together with the Executive Board, takes all management decisions required to ensure the continued existence and development of the company. After the end of each reporting period, the CEO and the Executive Board provide written quarterly reports on the current business performance, deviation from the budget, significant business incidents and transactions that affect business performance, risk exposure, health and safety aspects, as well as major development projects.
GRI 2-14: Role of the highest governance body in sustainability reporting
The Sustainability Report is compiled and edited under the lead of the Executive Board in alignment with the Nomination, Remuneration and Strategy Committee (NRSC), which can be involved during the editing phase. Once finalised, the Executive Board submits the Sustainability Report to the Board of Directors for final approval.
Statement
“The Board of Directors recognises its responsibility with regard to a sustainable Alpiq and is aware that sustainability is an integral part of the strategic management task. Together with the NRSC, it ensures that strategic decisions are made taking into account environmental and social as well as economic factors. The NRSC proposes the Alpiq ESG standard to the Board of Directors as well as the ESG targets and monitors their achievement. In its recommendation to the Board of Directors to approve the Sustainability Report, the NRSC attaches considerable importance to transparency regarding the status of sustainable development at Alpiq.”
Ronald Trächsel
Board Director and Chairman of the NRSC
GRI 2-15: Conflicts of interest
The Organisational Regulations and Code of Conduct both set out the correct conduct in case of conflicts of interest. These rules are applicable to all employees and to the governance body. In addition, all new employees receive training on the rules set out in the Code of Conduct. In accordance with Alpiqʼs Code of Conduct, all employees and members of the Board of Directors are responsible for declaring potential conflicts of interest. During the decision-making process in the Board of Directors and the Executive Boards, all potentially conflicted members are recused from the respective agenda items, including access to the information, the relevant part of the discussion as well as the related decisions.
GRI 2-16: Communication of critical concerns
While the energy supply situation stabilised throughout the year 2023, other risks, in particular related to cyberattacks and security/resilience issues, increased significantly. Throughout 2023, the Board of Directors was informed on a monthly and in some cases weekly basis about the critical issues related to market development, counterparties, liquidity situation and cybersecurity in full transparency. The shareholder representatives were informed with the same frequency, with the exception of competition sensitive information on counterparties.
GRI 2-17: Collective knowledge of the highest governance body
The NRSC and the Executive Board jointly included sustainability in the corporate strategy and elaborated the priority targets as well as the reporting requirements to be implemented. Following this alignment of the Executive Board, Board of Directors and shareholders, the goals for sustainable development will be further implemented in all areas of the company. Comprehensive reporting in compliance with the EU Corporate Social Reporting Directive (CSRD), which will be established in the coming months and years, will ensure comprehensive transparency regarding this development. This process will be accompanied internally by information and training sessions in meetings or by means of the companyʼs electronic learning platform.
In the current geopolitical and economic context, the learning focus has been on sustainability, compliance, cybersecurity, physical security and resilience. These learning sessions are mandatory for all employees and the members of the Board of Directors.
GRI 2-18: Evaluation of the performance of the highest governance body
In accordance with the Swiss Code of Best Practice for Corporate Governance, the Board of Directors conducts an annual self-evaluation and jointly discusses measures and initiatives to be implemented. In 2023, the performance of the Board of Directors was evaluated by the Chairman of the Board of Directors, individually, focusing on the performance during the year 2023, the skill set required as well as the outlook for the year 2024. In addition, the Board of Directors evaluated itself during the last meeting of the Board of Directors in December 2023.
GRI 2-19: Remuneration policies
Members of the Board of Directors receive a fixed compensation plus lump-sum expenses and statutory pension benefits. These components are not performance related. The amount of the fixed compensation depends on the office held as Chair or member and on memberships on board committees. Apart from the legally required social security contributions, members of the Board of Directors do not receive any other pension benefits, except for pension contributions if they are insured with the “PKE Vorsorgestiftung Energie”. See also Annual Report 2023 “Corporate Governance, Remuneration”.
GRI 2-20: Process to determine remuneration
To ensure that the remuneration of members of the Executive Board and the Board of Directors conforms to standard market practice, Alpiq regularly engages independent external consultancy firms to evaluate overall remuneration packages relative to the market environment.
GRI 2-21: Annual total compensation ratio
Alpiqʼs compensation philosophy is aimed at promoting and reinforcing the quality and commitment of employees. Alpiq is generally committed to paying its employees fair and appropriate compensation. This compensation should meet minimum statutory standards and generally exceeds them in each country in which Alpiq is active.
To strengthen group-wide governance and ensure the consistent application of Alpiqʼs compensation philosophy, a review of current systems, processes and practices was initiated in 2023. Alpiq is taking action to ensure full compliance with the EU Pay Transparency Directive and its transposition into the national legislation of the member states.
There was no general wage round at Alpiq in 2023. Adjustments were made in all countries due to inflation, and there were isolated structural adjustments. The highest-paid individual did not receive a pay adjustment in 2023.