Executive Management Board
The CEO and, under his direction, the other EMB members are responsible for the Group’s overall business and day-to-day management. The EMB is also responsible for the implementation of strategic decisions and stakeholder management. The CEO reports to the Board regularly and whenever extraordinary circumstances so require. Each member of the EMB is appointed and discharged by the Board of Directors.
On 31 December 2017, the EMB comprised twelve members under the leadership of, and including, the CEO, Marco Gadola.
In May 2017, Patrick Loh joined Straumann as Executive Vice President Asia Pacific, taking over from Dr Alexander Ochsner, who assumed a new role in the Group as Executive Vice President Global People Management & Development. Due to its increasing strategic importance, this function has been included in the EMB. In August 2017, Mike Rynerson re-joined Straumann as Executive Vice President of the new Digital Business Unit.
OTHER ACTIVITIES AND VESTED INTEREST
Marco Gadola is Vice President of the Board of Directors of Calida Holding AG, Switzerland, and is a member of the Board of Directors of MCH Group, Switzerland. In addition, he is a panel member of the Swiss-American Chamber of Commerce.
Frank Hemm is a member of the Board of Directors and Board of Trustees of the independent academic network International Team for Implantology (ITI). Under a collaboration agreement, Straumann supports the ITI with payments (see Note 28 of the Audited Consolidated Financial Statements on p. F 54).
Patrick Loh is an independent board member of the China-based company Haier Biomedical Co. In addition, he succeeded Alexander Ochsner in 2017 as an advisor of the Essence & DM Dental Industry Investment Partnership, a private equity fund addressing the dental sector in China, which Mr. Loh chairs.
Other than these, no member of the EMB:
- Performed any activities in governing or supervisory bodies of significant foreign or domestic organizations, institutions or foundations under private or public law
- Held any permanent management or consultancy function for significant domestic or foreign interest groups
- Held any official function or political post.
PERMITTED MANDATES OUTSIDE STRAUMANN (PURSUENT TO ART. 12 OAEC)
Art. 4.4 of Straumann’s Articles of Association states that no member of the EMB may perform more than five mandates (i.e. mandates in the highest level governing body of a legal entity required to be registered in the Commercial Register or in a corresponding foreign register) in commercial enterprises, of which no more than two may be in a listed company. The following are exempt from these restrictions:
- Mandates in enterprises that control the Group or are controlled by the same
- Mandates in enterprises that are performed at the instruction of the Group
- Mandates in associations, organizations, and legal entities with a public or charitable purpose, and in foundations, trusts, and employee pension funds. No member of the Executive Management may perform more than three such mandates.
Mandates in several legal entities under common control or under the same economic authority are deemed as one mandate.
The Board of Directors and the EMB have not delegated any managerial powers to persons or companies outside the Group.
INTERNAL MANAGEMENT DEVELOPMENT
Straumann continued the Strategic Management Development System (SMD) program initiated in 2008 to develop and deploy key talent internally, in order to build a strong succession pipeline. The goal is to fill at least 50% of business-critical and key management positions with internal candidates. The scope was broadened to include Strategic Management and their direct reports as well as other business-critical roles e.g. salesforce, and the target was achieved again in 2016.
COMPENSATION, SHAREHOLDINGS AND LOANS
The compensation and equity holdings of the Board of Directors and the EMB and their related parties are disclosed in the Compensation Report on p. 144 and in the audited financial statements in Notes 3.3 and 4 on p. 201.
CHANGES OF CONTROL AND DEFENSE MEASURES
The Articles of Association of Straumann Holding AG do not contain provisions for opting out or opting up. There are no change-of-control clauses included in agreements and schemes benefiting members of the Board of Directors or the Executive Management Board or other management staff.
INFORMATION AND CONTROL MECHANISMS FOR THE BOARD OF DIRECTORS AND THE EXECUTIVE MANAGEMENT BOARD MANAGEMENT INFORMATION SYSTEM
The Group’s Management Information System encompasses management, business and financial reporting. The information is provided to the Executive Management Board once a month and to the Board of Directors as a monthly summary and in detail on a quarterly basis.
Straumann operates a state-of-the-art SAP enterprise resource planning system, which covers 90% of all business transactions of the Group’s fully consolidated entities. With the exception of the Brazilian subsidiary, Neodent, the system links all other major subsidiary companies and production sites directly with Group headquarters. This greatly reduces the potential for error or
fraud, and it enables the Executive and Senior Management to monitor local processes and related figures directly, in detail and in real time. Neodent is integrated in the Group’s reporting system but not yet in SAP.
INTERNAL CONTROL SYSTEM
The Group’s Internal Control System (ICS) is a key instrument for designing business processes, measuring progress towards financial goals and addressing potential financial issues before they occur. It also supports the design of business processes in order to achieve the desired level of control in terms of efficiency and effectiveness.
The company’s approach is to ensure that internal controls are accurate, timely, robust, and receive appropriate management attention in each respect. To achieve this, dedicated control templates are used for each business process to address major risks. The templates are continuously improved.
In addition, each entity (sales affiliate, production site or global function) has a designated, trained person or team that is ultimately accountable for the assessment undertaken and the decisions arising from it. Clear benefits of the Internal Control System include enhanced segregation of duties, increased control consciousness and higher awareness of potential risks and their consequences.
The ICS program is coordinated by the Group CFO, who meets with the external auditors on a regular basis to discuss the status of internal control issues and the status of remediation of control deficiencies. Internal controls are evaluated annually by the external auditors and by Internal Audit according to an agreed program.
The role of the Group’s Internal Audit function is to provide independent assurance to the Board of Directors that the key risks of the organization are under control and to support Management in ensuring compliance, operational efficiency and control effectiveness across the Group.
Having considered and reviewed alternative set-ups, the Audit Committee approved a proposal by the Chief Financial Officer (who is also the Chief Risk Officer) to mandate KPMG with the Internal Audit function at Straumann. With effect of July 2017, a highly experienced team at KPMG in Basel complemented by local KPMG offices with specific local language skills and expertise has been conducting the Internal Audits on behalf of the Audit Committee. This approach is cost effective and provides access to best-practice processes in other industries.
In 2017, four internal audits were performed at global and local levels according to the audit program approved by the Audit Committee of the Board of Directors.
CORPORATE RISK MANAGEMENT
The Board of Directors is responsible for the overall supervision of risk management and uses the Internal Audit function to this end. The Board has delegated the task of risk management to the Chief Risk Officer (CRO). Through its Audit Committee, the Board assesses and discusses risks on a regular basis in consultation with the CRO and/or the relevant members of senior management.