CORPORATE GOVERNANCE
Bystronic attaches great importance to good corporate governance and consequently to providing shareholders with detailed information. In this section, the chairpersons of the committees report on their activities in 2021. It is followed by the Corporate Governance Report in accordance with the Swiss Stock Exchange Directive on Information Relating to Corporate Governance as well as the Compensation Report.
Report of the Human Resources Committee
“We are realigning our HR tools towards Bystronic.”
Chairman of the Human Resources Committee
Alignment towards Bystronicʼs business success
Following the General Meeting on April 21, 2021, which approved the renaming of Conzzeta to Bystronic on the one hand and the personnel changes on the Human Resources Committee on the other, the main task of the Human Resources Committee was to finalize the design of the organization, to support the development of the human resources tools, to adapt the compensation to the new business conditions, and to lay the groundwork for the succession on the Board of Directors.
The Human Resources Committee convened six times during the course of 2021. Following the departure of Philip Mosimann (Chairman until the 2021 AGM), it is composed of Urs Riedener (new Chairman), Heinz O. Baumgartner (new member), and Robert F. Spoerry. As a general rule, the Chairman of the Board of Directors, the CEO, and the Group CHRO also participate in the committee’s meetings in an advisory capacity, albeit not when it comes to the determination of their own compensation.
At the beginning of the year, the focus was still on concluding the tasks arising from the transformation. The parting of the former members of the Executive Committee of Conzzeta was handled in an equitable manner by means of additional compensation for their additional workload and a retention plan, thus ensuring that the important work within the previous structure, in particular in connection with the Mammut transaction, was brought to a successful conclusion.
After the Annual General Meeting, the focus increasingly turned to matters relating to Bystronic AG. The committee reviewed the existing HR tools and KPIs, and defined the direction for the future development. The most important areas of focus for Bystronic AG until 2025 are:
i) Culture & leadership: focus on the subtopics performance and learning culture, leadership development, diversity and inclusion, and employer branding.
ii) Talent management & performance management: focus on subtopics such as attractiveness, talent development and retention, fostering learning and development opportunities, succession planning, and engagement.
iii) Efficiency & effectiveness: addressing reward and compensation issues, standardization, data analytics, learning management, and the optimization of HR systems.
The recruitment of the first level of the operational organization was concluded. The compensation principles for the current financial year were updated to more accurately reflect Bystronic’s situation. It increasingly became possible to return to face-to-face training and further education courses, and the talents are being systematically evaluated. In addition, the succession planning for the top management level was initiated.
For Bystronic Laser AG, the legally required equality of pay was ascertained, confirmed, and certified. For the 2022 financial year, initial compensation elements, in particular the STI (Short-Term Incentive), have been linked more closely to Bystronic’s business success. In future, in addition to the four components sales, EBIT, operating free cash flow, and individual target achievement, the achievement of ESG targets will also have a 10% weighting. The regular review and development of our compensation system will be conducted in the light of our ongoing dialog with different stakeholders and in consideration of our business strategy, the best practices, and the market trends.
In the exercise of its regular duties, the succession planning at BoD level was concluded with the proposal for election of Inge Delobelle. She will further strengthen and expand the expertise of the Board of Directors, in particular with regard to international management experience and the service business. In addition, at the beginning of the year, the performance targets for the Executive Committee were defined, and the performance review was carried out at the end of the year. The compensation of the Executive Committee and the Board of Directors was defined and submitted to the relevant bodies.
The compensation budgets for the Board of Directors and the Executive Committee as approved at the 2020 and 2021 Annual General Meetings were adhered to in accordance with the Articles of Association. At the 2022 Annual General Meeting, the shareholders will decide on the future compensation budgets for the Board of Directors and the Executive Committee and express their position on the 2021 Compensation Report by means of a consultative vote.
We are convinced that during the past year, we laid important foundations to attract people to Bystronic and to reward performance in a fair and sustainable manner and in line with the shareholders’ interests.
In the coming year, the alignment of the compensation will remain a topic for us. Following the adaptation of Bystronic AG’s target values to the 2022 financial year and the inclusion of ESG targets, the compensation mix and share-based performance plans will be more closely linked to the achievement of the strategic objectives.
Urs Riedener
Chairman of the Human Resources Committee
Report of the Audit Committee
“We successfully established a new, potent financial organization.”
Chairman of the Audit Committee
Realignment successfully concluded
Within the framework of the transformation from Conzzeta to Bystronic, the Audit Committee successfully supported the far-reaching changes in the financial organization of the Bystronic Group in order to adapt the structure to the new requirements of a listed company.
In 2021, the Audit Committee was again made up of Matthias Auer and Roland Abt (Chairman). Four meetings were held in the reporting year. As a general rule, the Chairman of the Board, the CEO, and the CFO also attend the meetings in an advisory capacity alongside the committee members. Where items of relevance to the external auditors were on the agenda, their representatives were also present.
The establishment of a potent financial organization was the most important task in the reporting year, which the Audit Committee monitored closely. The search for and selection of a new CFO and a number of specialist staff in the financial department was successfully completed. The new organization has already demonstrated that it is fully functional and well prepared for future challenges.
According to the rules relating to corporate governance in force at Bystronic with regard to the rotation of the external auditors, the mandate should have been put out to tender by 2020. At that time, due to the strategic realignment, the Board of Directors decided to postpone this until the transformation has been completed. Consequently, we will issue a call for tenders for the group audit mandate in 2022.
The focus on Bystronic has also made it necessary to make adjustments to our external reporting. Changes have already been implemented in the Half-Year Report. The segment reporting was modified to reflect the geographical market segments, which also correspond to the internal management structure.
The internal reporting was also restructured and adapted to the requirements of a company that offers not only machines but also end-to-end sheet metal processing solutions, including the related software. In this context, we also completely overhauled the Accounting Handbook, which reflects the specific requirements of Bystronic. The Audit Committee closely monitored this process and also provided advisory input.
The internal audit function, which is carried out by the accountancy firm Deloitte, once again performed valuable work in the reporting year. Nine internal audits were carried out, and the Audit Committee deliberated the presented reports in detail. It also discussed and approved the audit schedule for 2022. The Audit Committee regularly monitors the management’s progress in addressing the follow-up items identified during the audits.
Within the framework of the Conzzeta Group’s focus on Bystronic, the employee pension plans were also restructured. On its own, Bystronic does not have the necessary size to be able to optimally operate its own independent pension plan in the future. Consequently, all employees of Bystronic, Mammut, and FoamPartner were transferred to collective pension foundations. The pensioners will remain with the Conzzeta Pension Fund, which will continue to operate as a pure pensioners’ fund. This conversion is a complex process that will only be fully completed in 2022.
2021 was a successful year: Together with the management, the Audit Committee restructured the financial organization and the core processes, thus laying the foundations for future growth.
Roland Abt
Chairman of the
Audit Committee