Organization Regulations of UBS AG
Valid as of 1 January 2009
Table of Contents
1
Abbreviations and Defined Terms
Abbreviations and Defined Terms
All references to functions in these organization regulations apply to both male and female persons. The following defined terms are used herein:
AC | Audit Committee | |
AC chairman | Chairman of the AC | |
Accounting standards | Accounting standards as used by UBS and the UBS Group from time to time | |
AC member(s) | Member(s) of the AC | |
Affiliated person | Person who directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with UBS | |
Agenda | Agenda with matters to be dealt with at a meeting of either the Board, a committee or the GEB | |
AGM(s) | Annual general meeting(s) of the shareholders | |
AML | Anti money laundering | |
Annex(es) | Annex(es) to these ORs | |
AoA | Articles of Association of UBS | |
Board | Board of Directors of UBS | |
Board member(s) | Member(s) of the Board | |
Board meeting(s) | Meeting(s) of the Board | |
Board resolutions | Resolutions of the Board | |
Business | Business as conducted by the UBS Group from time to time | |
Business conduct code | Code of business conduct and ethics of the UBS Group | |
Business division(s) | Highest organizational unit of the business, consisting of (i) Global Wealth Management & Business Banking, (ii) the Investment Bank and (iii) Global Asset Management | |
Business regulations | (i) Regulations issued by the business divisions or the Corporate Center and approved by the GEB as well as, if any, (ii) regulations issued directly by the GEB organizing the business within the authorities and responsibilities either allocated to the GEB or, subject to mandatory provisions of Swiss law, not allocated by the AoA, these ORs and its annexes to any other person or body | |
Chairman (or Board Chairman) | The Board member who is elected by the Board to be Chairman | |
Chairperson | Chairman, Vice Chairman or any other Board member presiding over a Board meeting | |
Circular resolution(s) | Resolution(s) in writing, made pursuant to the rules set out in section 7.5 | |
CO | Swiss Code of Obligations | |
Committee(s) | Committee(s) of the Board as set out in section 2.1 (see also AC, SC, RC, GNC, HRCC, CRC) | |
Committee chairman/ Committee chairmen | Chairman/chairmen of a committee/committees | |
Committees charter | Annex C of the ORs which set out the objectives, composition and responsibilities of the committee(s) | |
Committee(s) member(s) | Member of a committee/members of committees | |
Committee meeting(s) | Meeting of a committee/meetings of committees | |
Company Secretary | Secretary of the Board, elected by the Board pursuant to section 13.1 | |
Conflict of interest | Any personal interest, or the interest of a closely related person or company, that a Board member might have in a particular matter and which does or might be regarded to conflict with the interests of the UBS Group | |
Corporate body/ Corporate bodies | The Board and bodies of UBS exercising delegated Board functions, such as all Board committees, the GEB, the Group IA or other bodies mentioned in these ORs | |
Corporate Center | Organizational unit where all staff working for (i) any of the EC members or (ii) for selected shared services, if any, is employed | |
CRC | Corporate Responsibility Committee | |
Deputy | The Vice Chairman who is elected by the Board to act as deputy of the Chairman in his absence | |
Divisional CEOs | Divisional CEOs are the leaders of the respective business divisions and their responsibilities and authorities are set out in sections 22.4 and 22.5 and in the respective business regulations; they are GEB members | |
EC | Executive Committee | |
EC member(s) | Member(s) of the EC | |
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EC meeting(s) | Meeting(s) of the EC | |
EGM(s) | Extraordinary general meeting(s) of the shareholders | |
Executive/executives | One or all of the following: the Group CEO, any GEB member, head Group IA and Company Secretary | |
Executive compensationprograms | The compensation program for executives, approved annually by the HRCC, including all compensation plan awards granted thereunder | |
External auditors | External auditors of UBS | |
Financial statements | Quarterly and annual financial statements including among others the disclosure under “Management’s Discussion & Analysis” and the 6K Report to the Securities and Exchange Commission and any formal announcements relating to the UBS Group’s performance | |
GEB | Group Executive Board | |
GEB member(s) | Member(s) of the GEB | |
GEB meeting(s) | Meeting(s) of the GEB | |
GNC | Governance and Nominating Committee | |
Group CEO | Group Chief Executive Officer | |
Group CFO | Group Chief Financial Officer | |
Group CRO | Group Chief Risk Officer | |
Group GC | Group General Counsel | |
Group IA | Group Internal Audit | |
Head Group IA | Head of Group IA | |
HR | Human Resources | |
HRCC | Human Resources and Compensation Committee | |
IFRS | International Finance Reporting System, enacted by the international accounting standard board, as they may be amended or replaced from time to time | |
Minutes | Minutes of a Board meeting as further defined in section 6.9 or minutes of a committee meeting or of a GEB or EC meeting which have to fulfil the same requirements as minutes of a Board meeting | |
ORs | Organization Regulations of UBS including the annexes, which are an integral part of these | |
RC | Risk Committee | |
RC chairman | Chairman of the RC | |
RC members | Members of the RC | |
Regional CEOs | Regional CEOs assume Group-wide regional responsibility as set out in sections 22.2, 22.3 and 22.5 and in the terms of reference; they are GEB members | |
SC | Strategy Committee | |
SFBC | Swiss Federal Banking Commission | |
Shareholders | Shareholders of UBS | |
SID | Senior Independent Director elected in this capacity by the Board | |
Stakeholders | Persons, groups, or organizations who have a direct or indirect stake in UBS or the UBS Group and may, as a result, affect or be affected by UBS’s or the UBS Group’s actions, objectives, and policies | |
Subsidiary/subsidiaries | Entities which are controlled by UBS and are consolidated for the purpose of UBS’s Group accounts | |
Treasury | The treasury function of UBS which is responsible for the efficient management of UBS’s financial resources, including balance sheet and capital management, interest rate and currency management, liquidity and funding management | |
UBS | UBS AG | |
UBS Group | UBS and its subsidiaries | |
USD | Dollars of the United States | |
Vice Chairman/ | The Board member who is, or the Board members who are, elected by the Board to be a | |
Vice Chairmen | Vice Chairman/the Vice Chairmen | |
List of Annexes
Annex A | Organizational Chart of UBS AG
Annex B | Responsibilities and Authorities
Annex C | Charter for the Committees of the Board of Directors of UBS AG
Annex D | Role Profiles and Role Expectations
5
Introduction
8
2.2 | The organizational chart of UBS is shown inAnnex A.The responsibilities and authorities of the corporate bodies and executives are set out inAnnex B. Annex Csets out the objectives, composition, responsibilities and authorities of the committees andAnnex D describes the role profiles of Board and committee members. | Responsibilities ofCorporate Bodies,Board Members andother Executives | ||||||
2.3 | UBS fulfils strategic, financial and management functions not only for itself, but also with respect to the UBS Group. Notwithstanding this, the legal independence of all subsidiaries and the provisions of applicable local laws, rules and regulations relating to them must be observed to the extent legally required. | UBS Group | ||||||
2.4 | The business is organized in business divisions and / or other structures as the Group CEO and under the Group CEO’s leadership the GEB and the EC consider appropriate for the effective management of the business. This organization must be detailed in the business regulations. Each subsidiary is allocated to a single business division or the Corporate Center and has its own regulations which must be in line with the ORs and be admissible under applicable local laws, rules and regulations. | Organization of theBusiness |
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Board of Directors
12
5.3 | The Board’s ultimate responsibility for strategy and financial success includes in particular: | Strategy and | ||||||
(i) | determining the business strategy taking into account the information, proposals and alternatives presented by the GEB; | Financial Success | ||||||
(ii) | setting the risk profile and the risk capacities of the UBS Group; | |||||||
(iii) | setting financial objectives and approving, via the budget and financial planning process, the necessary means to achieve these objectives, including approving a capital allocation framework; | |||||||
(iv) | deciding on the UBS Group entering into substantial new business areas or exiting from an existing business area, in each case insofar as not covered by the current approved strategic framework; | |||||||
(v) | deciding on major acquisitions, mergers, disposals or capital expenditure; and | |||||||
(vi) | approving all matters and business decisions where such decisions exceed the authority delegated by the Board to the committees, the GEB or the Group CEO. | |||||||
5.4 | With respect to the ultimate responsibility for finance, the Board has in particular the following duties: | Finance | ||||||
(i) | lay down principles for accounting, financial and risk control and approve significant changes to them; | |||||||
(ii) | review and approve annually the financial business plan; | |||||||
(iii) | review and approve the annual and quarterly financial statements of UBS; | |||||||
(iv) | review and approve the annual report of UBS prior to its submission to the AGM; and | |||||||
(v) | review and approve results announcements and announcements giving guidance as to financial performance. | |||||||
5.5 | With respect to the organization of the business, the Board is in particular responsible for: | Organization | ||||||
(i) | approving and regularly reviewing the governance principles and the management structures as set out in the ORs; | |||||||
(ii) | approving the framework of the internal control system; | |||||||
(iii) | issuing regulations for the Group IA; | |||||||
(iv) | approving and regularly reviewing internal regulations (including these ORs) with respect to: | |||||||
(a) | financial, legal and regulatory matters (including risk, investment and compliance policies); | |||||||
(b) | personnel matters; and | |||||||
(c) | communication and investor relations matters; | |||||||
(v) | appointing and removing the Group CEO, the Group CFO, the Group CRO, the Group GC and the head Group IA, reviewing performance and planning succession; and | |||||||
(vi) | approving the compensation policy of UBS Group. | |||||||
5.6 | The Board supervises the management in particular with regard to: | Supervision | ||||||
(i) | The latter’s performance in meeting agreed goals and objectives; and | |||||||
(ii) | the compliance with applicable laws, rules and regulations. | |||||||
5.7 | The Board has a duty to convene AGMs and EGMs and to decide on proposals to be made to the shareholders as well as a duty, insofar as consistent with applicable law, to implement resolutions adopted by the shareholders. | Meetings of theShareholders | ||||||
5.8 | In case of financial difficulties or insufficient equity, the Board must undertake all steps required by Swiss banking law and by article 725 CO. | Loss of Equity | ||||||
5.9 | The Board takes the legally required decisions in connection with increasing or reducing the share capital of UBS. | Share Capital |
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Board of Directors
14
15
Board of Directors
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17
18
Management
20
21
Management
22
23
Management
24
Group Internal Audit
26
Special Provisions
28
29
UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
www.ubs.com
Organization Regulations of UBS AG
Annex A | Organizational Chart of UBS AG
Annex B | Responsibilities and Authorities
Annex C | Charter for the Committees of the Board of Directors of UBS AG
Annex D | Role Profiles and Role Expectations
Valid as of 1 January 2009
Organizational Chart of UBS AG
UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
www.ubs.com
Organization Regulations of UBS AG
Annex A | Organizational Chart of UBS AG
Annex B | Responsibilities and Authorities
Annex C | Charter for the Committees of the Board of Directors of UBS AG
Annex D | Role Profiles and Role Expectations
Valid as of 1 January 2009
Table of Contents
1
Abbreviations and Explanations
Abbreviations and Definitions
All references to amounts are in million CHF unless specified otherwise.
A | Approval | |
I | Information | |
P | Proposal | |
X | Proposal and approval authority (= initiative and execution) attributed | |
AGM | Annual general meeting of shareholders | |
AoA | Articles of Association | |
AC | Audit Committee | |
BD | Business division(s) | |
BD function head(s) | Business division function head(s) have functional directive and functional authority within the respective BD, as specified in the respective business regulations | |
BoD | Board of Directors | |
CC | Corporate Center | |
CC COO | Chief Operating Officer of the Corporate Center | |
Chairman | Chairman of the Board of Directors | |
D | Director | |
Divisional CEO(s) | Divisional CEOs are the leaders of the respective BD and their responsibilities and authorities are set out in sections 22.4 and 22.5 ORs and in the respective business regulations; they are GEB members | |
EC | Executive Committee | |
EC member(s) | Member(s) of the EC | |
ED | Executive director | |
Executives | GEB members, head Group IA and Company Secretary | |
GEB | Group Executive Board | |
GNC | Governance and Nominating Committee | |
Group CA | Group Controlling & Accounting | |
Group CEO | Group Chief Executive Officer | |
Group CFO | Group Chief Financial Officer | |
Group CRO | Group Chief Risk Officer | |
Group function head(s) | Group function head(s) have functional directive and functional authority throughout UBS Group, as specified in the business regulations for the CC | |
Group GC | Group General Counsel | |
Group IA | Group Internal Audit | |
Group HR | Group Human Resources | |
GT | Group Treasurer | |
GWM & BB | Global Wealth Management & Business Banking | |
Head Group IA | Head of Group IA | |
HRCC | Human Resources and Compensation Committee | |
LSC | Legal Structure Committee | |
MD | Managing director (or equivalent) | |
ORs | Organization regulations | |
RC | Risk Committee | |
Regional CEO(s) | Regional CEOs assume Group-wide regional responsibility as set out in sections 22.2, 22.3 and 22.5 ORs and in the terms of reference; they are GEB members | |
SC | Strategy Committee | |
SFBC | Swiss Federal Banking Commission | |
SPE | Special purpose entity | |
Subsidiaries | Entities which are controlled by UBS and are consolidated for the purpose of UBS’s Group accounts | |
UBS AG | UBS | |
UBS Group | UBS and its subsidiaries | |
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Responsibilities and Authorities
6
Chairman/ | ||||||||||||||||||||||
BoD | Group | |||||||||||||||||||||
BoD | Committees | CEO | EC | GEB | BDs | Remarks | ||||||||||||||||
3.1.5.4 | Other executives (excluding those mentioned in 3.1.5.3) | I | X: HRCC*/Chairman** | P* | *For performance assessment, proposal and assessment authority with the Group CEO only **For head Group IA and Company Secretary, in consultation with the respective committee(s) of the BoD | |||||||||||||||||
3.2 | Compensation plans, policies & governance | |||||||||||||||||||||
3.2.1 | UBS Group compensation & benefits principles | A | P: HRCC | P | ||||||||||||||||||
3.2.2 | UBS Group compensation & benefits governance framework | A* | P (to Group HR) | *Approval of second-level policies (ancillary policies and documents relating to the management of specific components of compensation) can be delegated to Group HR | ||||||||||||||||||
3.2.3 | Compensation & benefits policy, plan rules & compensation programs (new, material amendments or terminations) | |||||||||||||||||||||
3.2.3.1 | Independent BoD members | A: non-independent BoD | P*: Chairman | * The HRCC advises the Chairman accordingly | ||||||||||||||||||
3.2.3.2 | Non-independent BoD members | X: HRCC | ||||||||||||||||||||
3.2.3.3 | Executives | A: HRCC | P | |||||||||||||||||||
3.2.3.4 | All other employees | I: HRCC** | A* | P (to Group HR) | *Can be delegated to Group HR **If determined to be sufficiently material | |||||||||||||||||
3.2.4 | Establishment of new equity plans with significant use of UBS shares or related instruments | A | P: HRCC | P | Materiality determined by Group HR in consideration of financial, reputational or strategic impact. With respect to the use of UBS equity see also section 6 | |||||||||||||||||
3.2.5 | Establishment of new compensation plans with a material financial, reputational or strategic impact | A | P: HRCC | P | Materiality determined by Group HR in consideration of financial, reputational or strategic impact | |||||||||||||||||
3.2.6 | Other compensation plans, policies and programs not covered in 3.2 above | X* | X* | *In accordance with guidelines & policies of Group HR. Materiality determined by Group HR | ||||||||||||||||||
3.3 | Benefits and retirement plans | |||||||||||||||||||||
3.3.1 | Establishment or change of benefits/retirement plans with a material financial, reputational or strategic impact | A: HRCC | P | Materiality determined by Group CFO in consultation with Group HR in consideration of financial, reputational or strategic impact and/or employee representatives | ||||||||||||||||||
3.3.2 | Determination of funding guidelines for retirement benefits and funding decisions for plans with material asset levels | A: EC/ P: Group CFO | ||||||||||||||||||||
3.3.3 | Material increase in the annual cash funding for retirement plans | A | P | Materiality determined by Group CFO in consultation with Group HR | ||||||||||||||||||
3.3.4 | Appointment of employer representatives for the Foundation Board of the Swiss Pension Fund | I: HRCC | P | A | ||||||||||||||||||
3.3.5 | Appointment of company representatives to pension boards/trusts, countries outside Switzerland with material pension plans | A | P | |||||||||||||||||||
3.3.6 | Other benefits and retirement plans not covered in 3.3.1 to 3.3.5 | X* | X* | *In accordance with guidelines & policies of Group HR. Materiality determined by Group HR | ||||||||||||||||||
3.4 | Total compensation & benefits | |||||||||||||||||||||
3.4.1 | Total compensation & benefits for: | |||||||||||||||||||||
3.4.1.1 | Chairman of the BoD | X: HRCC | ||||||||||||||||||||
3.4.1.2 | Non-independent BoD members | X: HRCC | ||||||||||||||||||||
3.4.1.3 | Independent BoD members | A | P: Chairman/HRCC | |||||||||||||||||||
3.4.1.4 | Group CEO | P: Chairman A: HRCC | ||||||||||||||||||||
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Responsibilities and Authorities
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Responsibilities and Authorities
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Responsibilities and Authorities
Chairman/ | ||||||||||||||||||||||
BoD | Group | |||||||||||||||||||||
BoD | Committees | CEO | EC | GEB | BDs | Remarks | ||||||||||||||||
9.1.1 | UBS entities: Incorporation, reactivation, UBS Group internal transfer of legal ownership (including partial transfer and UBS Group internal merger*) and dissolution of UBS entities with equity of | >1,000 | EC: 1,000/ Group CFO: 500 | Subject to LSC sign-off *Merger of a UBS entity with UBS requires formal approval by the BoDs of UBS and the relevant entity. In case of a merger, the equity of the entity or entities which will be dissolved determines the required approval level | ||||||||||||||||||
9.1.2 | Branches and rep offices: Establishment and closure of: | Subject to LSC sign-off | ||||||||||||||||||||
9.1.2.1 | Branches (including sub-branches) of the parent bank outside Switzerland | A | P | |||||||||||||||||||
9.1.2.2 | Branches (including sub-branches) of UBS entities | A | P | |||||||||||||||||||
9.1.2.3 | Representative offices or similar set-ups such as agencies or satellite offices of the parent bank or UBS entities | A | P | |||||||||||||||||||
9.1.2.4 | Branches of the parent bank in Switzerland | X: GWM & BB | ||||||||||||||||||||
9.1.3 | Election of Board members and appointment of management of UBS entities | X | X | |||||||||||||||||||
9.2 | Transactions with 3rd parties | |||||||||||||||||||||
9.2.1 | Acquisitions and divestments (share and asset deals with 3rd parties; including increase or decrease of ownership in UBS entities) | Sign-off through new business or equivalent process by relevant control functions. Subject to LSC sign-off | ||||||||||||||||||||
9.2.1.1 | Within UBS Group strategy | >500 | Group CFO: 50 | 500 | ||||||||||||||||||
9.2.1.2 | Outside UBS Group strategy | >250 | Group CFO: 25 | 250 | ||||||||||||||||||
9.3 | Funding and financial management of UBS entities | |||||||||||||||||||||
9.3.1 | Capital increase* of UBS entities** (individual or cumulative p.a. per entity) | EC: >500/ Group CFO: 500 | *Includes payments in share premium accounts, profit retention, debt forgiveness, equity-like lending and other measures with similar effect **Includes branches of the parent bank and UBS entities subject to local tax and/or regulatory capital requirements | |||||||||||||||||||
9.3.2 | Capital reduction and redemption of UBS entities | EC: >500/ Group CFO: 500 | ||||||||||||||||||||
9.3.3 | Limits for UBS Group internal engagements | X: Group CFO | See UBS Group policy “UBS Group Internal Engagements”, 1-P-000357; for definition of entities subject to limit requirements. In addition to above policy, all non-UBS entities are subject to UBS’s standard risk policies and procedures and the risk authorities, 1-C-000004 | |||||||||||||||||||
9.3.4 | Parental support for UBS entities | EC: >1,000/ Group CFO: 1,000 | See UBS Group policy “Parental Support for UBS Group Companies”, 1-P-000358 | |||||||||||||||||||
9.3.5 | Appropriation of earnings by UBS entities | X: Group CFO | ||||||||||||||||||||
9.4 | Licenses, regulation and rating | |||||||||||||||||||||
9.4.1 | Application for or purchase or return/sale of bank, broker or broker-dealer license; material extension of such existing license | A | P | Determination of what constitutes a “material extension” is in the responsibility of the relevant BD’s general counsel | ||||||||||||||||||
9.4.2 | Change of regulatory status or regulator of parent bank branch or UBS entity or branch* | A | P | *If UBS initiated | ||||||||||||||||||
9.4.3 | Rating of UBS entities by rating agencies | A: Group CFO | P | |||||||||||||||||||
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UBS AG
Peter Kurer | Sergio Marchionne | |
Chairman | Vice Chairman |
13
UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
www.ubs.com
Organization Regulations of UBS AG
Annex A | Organizational Chart of UBS AG
Annex B | Responsibilities and Authorities
Annex C | Charter for the Committees of the Board of Directors of UBS AG
Annex D | Role Profiles and Role Expectations
Valid as of 1 January 2009
Table of Contents
1
Introduction
4
Membership and Constitution
6
Responsibilities and Authorities
8
(ii) | External auditors: | |||||||
(a) | support the Board in reaching a decision on the appointment and/or removal of the external auditors and their lead audit partner through an assessment of the qualifications, expertise, effectiveness, independence and performance of the external auditors and their lead audit partner. The AGM will elect the external auditors. The AC is to assess with the Group CFO the timing and process for implementing the rotation of the lead audit partner; | |||||||
(b) | approve the engagement letter of the external auditors (including the scope of the audit) and the fees and terms for the planned audit work. The AC chairman and the Board Chairman are to formally sign the engagement letter. The AC is responsible for developing and implementing policy on the engagement of the external auditors to supply non-audit services, taking into account relevant guidance, and for reporting to the Board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken. Mandates of the external auditors for additional audit work, audit-related and non-audit work (aa) are subject to preapproval by the AC, which may delegate approval authority to one of its members and (bb) must not be approved if and to the extent that the services to be provided are prohibited by the Sarbanes-Oxley Act. All mandates approved by a AC member are brought to the attention of the AC at its next meeting. The AC may authorize the Group CFO to pre-approve clearly defined mandates, subject to final approval by the AC; | |||||||
(c) | critically analyse the reports of the external auditors on the financial and regulatory audits and discuss these with the leading external auditor; | |||||||
(d) | ascertain that shortcomings have been remedied or that recommendations of the external auditors have been implemented; | |||||||
(e) | monitor and discuss with the external auditors the UBS Group’s relationship with the external auditors, including the exchange of information between the external auditors and the Group IA; | |||||||
(f) | review and monitor the external auditors’ independence and objectivity and the effectiveness of the audit process; | |||||||
(g) | provide in consultation with the RC an open avenue of communication among the external auditors and the Group IA, the EC, the Group CFO and the Board; and | |||||||
(h) | mandate together with the RC co-ordination and close co-operation between the external auditors and the Group IA; | |||||||
(iii) | Internal controls: | |||||||
(a) | support the RC in preparing for the Board the decision on the appointment and/or the removal of the head Group IA through an assessment of the individual’s qualifications, expertise, effectiveness, independence and performance; | |||||||
(b) | form in close co-operation with the RC, an opinion of the adequacy, organization, efficiency and completeness of the UBS Group’s internal control system and procedures by taking notice of the reports provided by the EC, the external auditors, the Group IA and the RC minutes regarding internal control matters and by reviewing the manner and the framework in which the EC establishes and monitors the adequacy, organization, efficiency and completeness of the internal control systems and procedures; and | |||||||
(c) | enquire of the Group CEO and the Group CFO whether there exists any material weakness or significant deficiency in UBS’s systems of internal controls and procedures and/or any fraud (irrespective of materiality) that involves any executive; |
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Responsibilities and Authorities
10
11
Responsibilities and Authorities
12
13
Responsibilities and Authorities
(d) | assist the Board in its determination by reviewing and assessing management’s proposals in relation to risk profile and risk capacity and making recommendations to the Board in relation to those proposals; | |||||||
(e) | assess periodically the effectiveness of key policies and procedures adopted by the EC relating to risk management and control of significant risks; | |||||||
(f) | review and make recommendations to the Board in relation to the proposals from the EC in relation to material risk limits, together with allocations and authority levels relating to those limits. Material risk limits include those relating to portfolios, concentrations, products, sectors or other categories relevant to the strategy, risk profile and risk capacity of UBS and the UBS Group as approved by the Board; | |||||||
(g) | review and approve the characteristics for the UBS Group’s risk measurement framework (including changes thereto) used to identify, model, measure, monitor risks (including the appropriateness of systems within such framework), report risks or to establish risk approval authorities; | |||||||
(h) | monitor and oversee the risk profile of UBS and the UBS Group within the context of the Board-determined risk profile, risk capacity and limit structure; | |||||||
(i) | monitor, and at the request of the Group CEO approve as appropriate, excesses to Board-approved limits. The RC reports any such approvals to the Board at regular intervals. The Group CEO may authorize temporary excesses of limits and seek approval from the RC at its next meeting following such temporary authorization; | |||||||
(j) | review systematically high risk areas of the UBS Group and assess the effectiveness of the steps taken by the EC to manage or mitigate such risks; | |||||||
(k) | review and assess the asset and liability management framework including allocation of responsibilities, limits, capital allocation, liquidity and funding; and | |||||||
(l) | consider, in conjunction with the SC, the UBS Group’s strategy to deal with anticipated or existing high-level risks; | |||||||
(ii) | Risk reporting: | |||||||
(a) | receive and review reports relating to risks, including reports of management that assess the likelihood of such risks materializing and the adequacy and appropriateness of the internal controls to manage those risks; | |||||||
(iii) | Anti money laundering: | |||||||
(a) | review the AML process and participate, if so requested by the EC, in international working groups on topics relating to financial crimes and monitor UBS’s efforts to prevent corruption and terrorist financing; | |||||||
(iv) | Group IA: | |||||||
(a) | support the Board, in consultation with the AC, in preparing the decision on the appointment and/or the removal of the head Group IA through an assessment of the individual’s qualifications, expertise, effectiveness, independence and performance; | |||||||
(b) | review, in consultation with the AC, the scope, nature and effectiveness of the work of Group IA, including its audit program and resources; | |||||||
(c) | provide, in consultation with the AC, an open avenue of communication among the external auditors and the Group IA, the EC, the Group CFO and the Board and review the effectiveness of the reporting line and unrestricted access of the head Group IA to the RC, the AC and to the Board Chairman; and | |||||||
(d) | mandate together with the AC co-ordination and close co-operation between the external auditors and the Group IA. |
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15
Meetings and Resolutions
of the Committees
18
Reporting
20
Special Provisions
22
UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
www.ubs.com
Organization Regulations of UBS AG
Annex A | Organizational Chart of UBS AG
Annex B | Responsibilities and Authorities
Annex C | Charter for the Committees of the Board of Directors of UBS AG
Annex D | Role Profiles and Role Expectations
Valid as of 1 January 2009
Table of Contents
Introduction by the Chairman
At UBS we are proud of the values we use to conduct our business. UBS and all its employees will continue to uphold the highest levels of business ethics and personal integrity in all of their business transactions and interactions. This document outlines the role profiles for all Board members and states the expectations and standards that UBS requires from them.
Peter Kurer
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For Board Members
1 Role Profile and Expectations of Board Members |
1 | Role Profile and Expectations of Board Members | |||||
1.1 | Board members as a group must have the necessary qualifications and skills to perform all Board duties and must together possess financial literacy, experience in banking and risk management, international experience, including experience of international financial matters, and knowledge of the duties of directors. | Expectations for theBoard as a whole | ||||
1.2 | In particular, individuals will be considered for nomination as Board members, and Board members will be considered for appointment to a committee, on the basis of: | |||||
(i) | their judgment, character, expertise, skills and knowledge; | |||||
(ii) | their diversity of viewpoints, professional backgrounds and track records; | |||||
(iii) | their business and other experience (e.g. banking, risk and international experience) relevant to the business of UBS; | |||||
(iv) | the relevance of their expertise, skills, knowledge and experience to the work of any committee to which they are to be appointed; | |||||
(v) | the extent to which their judgment, character, expertise, knowledge and experience will interact with other Board members to build an effective and complementary board and, where relevant, with other members of a committee to build an effective and complementary committee; | |||||
(vi) | the ability and willingness to commit adequate time to Board and committee matters; and | |||||
(vii) | whether existing board memberships or other positions held by a candidate could lead to a conflict of interest. | |||||
1.3 | In order to be able to fulfil their role, a Board member is expected to: | Expectations for each | ||||
(i) | act with integrity, probity and to a high ethical standard; | Board Member | ||||
(ii) | exercise sound judgment; | |||||
(iii) | be able and willing to inquire and probe, and have the strength of character to seek and obtain full and satisfactory answers, within the collegiate environment of the Board; | |||||
(iv) | challenge constructively and contribute to the development of strategy; | |||||
(v) | scrutinize the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; | |||||
(vi) | satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible; | |||||
(vii) | devote the necessary time to discharge properly their duties. An indication of time will be set out in each Board member’s letter of appointment; | |||||
(viii) | make every effort to attend, in person or by telephone- or video-conference, all regularly scheduled Board meetings and committee meetings on which they serve; and | |||||
(ix) | comply with a code prepared to reflect provisions of applicable laws, rules and regulations on share dealing by Board members and others. | |||||
1.4 | A sufficient number of Board members must meet the profile for membership of the committees as set out inAnnex Cand thisAnnex Dto the ORs. | Qualificationsfor CommitteeMembership |
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For the Chairman of the
Board of Directors
2 Role Profile and Expectations |
2 | Role Profile and Expectations | |||||||||
2.1 | The role of the Chairman is a key one within the Board and the UBS Group. He provides coherent leadership for UBS. | In General | ||||||||
2.2 | The Chairman leads the Board. In this context his main responsibilities and authorities are the following: | Main Responsibilitiesand Authorities | ||||||||
(i) | Board composition: | |||||||||
(a) | build, together with the GNC, an effective and highly complementary Board with an appropriate balance of skills and experience; and | |||||||||
(b) | initiate changes in and plan, together with the GNC, Board succession and Board appointments; | |||||||||
(ii) | Board knowledge and experience: | |||||||||
(a) | provide guidance to other Board members about what is expected from them and to take full account of their issues and concerns; | |||||||||
(b) | consider and address, together with the GNC, the development needs of individual Board members and the Board as a whole in order to maintain the necessary depth and breadth of knowledge and experience and to enhance the effectiveness and efficiency of the Board as a team; | |||||||||
(c) | ensure, together with the GNC, that a satisfactory ongoing training and education program is established for existing Board members and committee members with regard to their respective responsibilities and organize, together with the GEB members, an annual seminar aimed at updating the full Board on the UBS Group’s strategy and providing in-depth orientation on selected business activities; and | |||||||||
(d) | ensure, together with the GNC, that new Board members are provided with a satisfactory induction programme covering, amongst other things: | |||||||||
(aa) | Board members’ duties and other regulatory issues; | |||||||||
(bb) | familiarization with the business and the business divisions; and | |||||||||
(cc) | the UBS Group’s corporate governance policies, regulations, practices and procedures; | |||||||||
(iii) | Board agenda and meetings: | |||||||||
(a) | call Board meetings and set their agenda; | |||||||||
(b) | coordinate, together with the committee chairmen, the work of all committees; | |||||||||
(c) | aim to ensure the effectiveness of the Board, with the right balance between the time the Board allocates to strategic and supervisory functions; | |||||||||
(d) | manage the Board to ensure that sufficient time is allowed for discussion of complex or contentious issues and to arrange, if necessary, informal meetings among Board members; | |||||||||
(e) | encourage active engagement by all Board members in all matters concerning the Board; and | |||||||||
(f) | ensure that Board resolutions are in form and content accurate and implemented properly; | |||||||||
(iv) | Board information and communication: | |||||||||
(a) | ensure that Board members receive accurate, timely and clear information to enable the Board to take sound decisions, monitor the management of the UBS Group effectively and provide advice to promote the success of the UBS Group; | |||||||||
(b) | ensure that the Board members receive all necessary material and information in good time before each Board meeting; and | |||||||||
(c) | promote open communication between the Board and the management; |
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(v) | Board committees: | |||||||||
(a) | ensure the operation of a clear committee structure; and | |||||||||
(b) | ensure that the committees receive accurate, timely and clear information to enable the fulfilment of their responsibilities; | |||||||||
(vi) | Board / Group CEO remuneration: | |||||||||
(a) | make proposals to the HRCC on the total compensation for independent Board members (other than the Chairman) and for the Group CEO; | |||||||||
(vii) | Regulatory issues: | |||||||||
(a) | keep a close contact with the UBS Group’s main regulators; | |||||||||
(viii) | Corporate governance: | |||||||||
(a) | promote, together with the GNC, the highest standards of corporate governance for UBS and the UBS Group as well as the highest standards of integrity and probity within UBS and the UBS Group; | |||||||||
(ix) | Communication outside the Board: | |||||||||
(a) | represent the Board and the UBS Group in interaction with the media; and | |||||||||
(b) | with the Group CEO, be closely involved in communication with shareholders and other stakeholders regarding the business; | |||||||||
(x) | Relationship with the GEB: | |||||||||
(a) | establish and keep a close working relationship with the Group CEO and the other GEB members, providing advice and support to them while respecting the fact that day-to-day management responsibility is delegated to the GEB under the ORs; | |||||||||
(b) | facilitate a constructive relationship between the Board and the Group CEO and other GEB members; | |||||||||
(c) | lead, together with the HRCC and the GNC, the ongoing monitoring and annual evaluation of the performance of the Group CEO; and | |||||||||
(d) | foster, in close cooperation with the HRCC, an ongoing and effective performance review of, and succession planning for, the UBS Group’s 100 most senior managers; | |||||||||
(xi) | AGMs and EGMs: | |||||||||
(a) | ensure that the Board convenes the AGMs and EGMs and that it prepares and decides on proposals to be made to the shareholders; | |||||||||
(b) | ensure that the Board implements resolutions adopted at the AGMs and EGMs insofar as permitted by law; and | |||||||||
(c) | preside over AGMs and EGMs. | |||||||||
2.3 | The Chairman is expected to | Expectations | ||||||||
(i) | be a strategic thinker, a strong, yet team-oriented leader and a good communicator (both inside and outside of the Board); | |||||||||
(ii) | have broad experience in banking and risk management and be financially literate; | |||||||||
(iii) | have an excellent professional track record and the highest reputation; and | |||||||||
(iv) | commit substantially all of his business time to the role and shall not take on other directorships or roles outside the UBS Group without the prior approval of the Board. |
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For the Vice Chairmen and the
Senior Independent Director
3 Role Profile and Expectations |
3 | Role Profile and Expectations | |||||
3.1 | The Board elects at least one Vice Chairman who must be independent. If the Board elects more than one Vice Chairman, one of the independent Vice Chairmen acts as SID and another Vice Chairman, who must not necessarily be independent, acts as deputy to the Chairman and supports the Chairman in respect of his responsibilities and authorities. | Responsibilitiesand Authorities | ||||
3.2 | All Vice Chairmen are required to: | All Vice Chairmen | ||||
(i) | provide support and advice to the Chairman; and | |||||
(ii) | undertake such specific additional duties or functions as the Board may entrust to them from time to time. | |||||
3.3 | At least one of the Vice Chairmen must be “independent” as determined in accordance with section 3.2 of the ORs. | Independence | ||||
3.4 | The Vice Chairman elected as deputy is required, in the absence of the Chairman, to: | Deputy to the | ||||
(i) | act as a deputy for the Chairman; and | Chairman | ||||
(ii) | preside at Board meetings and at AGMs and EGMs. | |||||
3.5 | The Vice Chairman elected as the SID is required to: | SID | ||||
(i) | create an appropriate information flow and communication system amongst the independent Board members; | |||||
(ii) | collect and relay to the Chairman any issues or concerns of independent Board members; | |||||
(iii) | be a member of the GNC and lead, together with the GNC, the Board in the ongoing monitoring and annual evaluation of the Chairman; | |||||
(iv) | facilitate communication where appropriate between shareholders and independent Board members; | |||||
(v) | be available to shareholders if they wish to conduct discussions with an independent Board member; | |||||
(vi) | act as a point of contact for shareholders and stakeholders with concerns which have not been resolved so far or are not appropriate to be raised through the normal channels; | |||||
(vii) | ensure, in conjunction with the Chairman and the GNC, good corporate governance and balanced leadership and control within the UBS Group, the Board and the committees; and | |||||
(viii) | handle communication on behalf of the independent Board members. | |||||
3.6 | In order to be able to fulfil the role of Vice Chairman the respective Board member(s) is/are expected to: | Specific RoleRequirements | ||||
(i) | be seen as an individual to whom Board members and shareholders can raise concerns; | |||||
(ii) | display the same competencies and behaviours expected of the Chairman; and | |||||
(iii) | commit such time to the role as may be necessary for the proper discharge of his duties. An indication of the time expected for this purpose will be set out in each Vice Chairman’s letter of appointment. |
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For the Chairmen of the Committees
4 Role Profile and Expectations |
4 | Role Profile and Expectations | |||
4.1 | The committee chairmen lead their committees and, in this context, have similar responsibilities and authorities as the Board Chairman has with regard to the leadership of the Board. Insofar as applicable, section 2.2 shall apply mutatis mutandis to the role of each committee chairman in respect of his committee. | Responsibilitiesand Authorities | ||
4.2 | Each committee chairman is expected to have good knowledge of the relevant committee’s area of responsibility together with such other experience as the Board considers desirable in the context of that committee’s work. | Relevant Knowledge | ||
4.3 | Each committee chairman must attend all AGMs and EGMs and as appropriate answer questions raised at such meeting on matters falling within his committee’s responsibilities. | Attendance at AGMsand EGMs | ||
4.4 | Each committee chairman must commit such time to the role as may be necessary for the proper discharge of his duties. An indication of the time expected for this purpose will be set out in each committee chairman’s letter of appointment. | Time Commitment |
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For certain Committee Members
5 Audit Committee |
5 | Audit Committee | |||||
5.1 | The details of the responsibilities and authorities delegated to the AC are set out inAnnex Band section 5 ofAnnex Cto the ORs. | Responsibilitiesand Authorities | ||||
5.2 | The AC members as a group must have the necessary qualifications and skills to perform all of their duties and must together possess financial literacy and experience in banking and risk management. In particular the AC members, as a group, are expected to: | Qualifications | ||||
(i) | commit such time to the role as may be necessary for the proper discharge of their duties. An indication of the time expected for this purpose will be set out in each of the AC members’ letter of appointment; | |||||
(ii) | have accounting or related financial management expertise (as such qualifications are determined by the Board) and at least one AC member must qualify as a “financial expert” in terms of the rules established pursuant to the US Sarbanes-Oxley Act of 2002; and | |||||
(iii) | be able to read and understand financial statements and to monitor and assess the activity of the Group IA and the external auditors; at least one AC member must be financially literate. | |||||
5.3 | Each AC member must be independent as set out in sections 2.3 and 2.4 ofAnnex C to the ORs. | Independence |
6 Corporate Responsibility Committee |
6 | Corporate Responsibility Committee | |||||
6.1 | The details of the responsibilities and authorities delegated to the CRC are set out inAnnex Band section 6 ofAnnex Cto the ORs. | Responsibilitiesand Authorities | ||||
6.2 | The CRC members as a group must have the necessary qualifications and skills to perform all of their duties. In particular the CRC members, as a group, are expected to: | Qualifications | ||||
(i) | commit such time to the role as may be necessary for the proper discharge of their duties. An indication of the time expected for this purpose will be set out in each of the CRC members’ letter of appointment; and | |||||
(ii) | have good knowledge of corporate responsibility and relevant political issues and such other experience as the Board considers desirable in order to enable the CRC to perform its duties. | |||||
6.3 | The majority of the CRC members must be independent as set out in section 3.2 of the ORs. | Independence |
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7 Governance and Nominating Committee |
7 | Governance and Nominating Committee | |||||
7.1 | The details of the responsibilities and authorities delegated to the GNC are set out inAnnex Band section 7 ofAnnex Cto the ORs. | Responsibilitiesand Authorities | ||||
7.2 | The GNC members as a group must have the necessary qualifications and skills to perform all of their duties. In particular the GNC members, as a group, are expected to: | Qualifications | ||||
(i) | commit such time to the role as may be necessary for the proper discharge of their duties. An indication of the time expected for this purpose will be set out in each of the GNC members’ letter of appointment; and | |||||
(ii) | have broad knowledge of relevant Swiss and international corporate governance standards and related issues and such other experience as the Board considers desirable to enable the GNC to perform its duties. | |||||
7.3 | Each GNC member shall be independent as set out in section 2.2 ofAnnex Cto the ORs. | Independence |
8 Human Resources and Compensation Committee |
8 | Human Resources and Compensation Committee | |||||
8.1 | The details of the responsibilities and authorities delegated to the HRCC are set out inAnnex Band section 8 ofAnnex Cto the ORs. | Responsibilities and Authorities | ||||
8.2 | The HRCC members as a group must have the necessary qualifications and skills to perform all of their duties. In particular the HRCC members, as a group, are expected to: | Qualifications | ||||
(i) | commit such time to the role as may be necessary for the proper discharge of their duties. An indication of the time expected for this purpose will be set out in each of the HRCC members’ letter of appointment; and | |||||
(ii) | have experience in compensation practices and in such other areas as the Board considers desirable to enable the HRCC to perform its duties. | |||||
8.3 | Each HRCC member shall be independent as set out in section 2.2 ofAnnex Cto the ORs. | Independence |
9 Risk Committee |
9 | Risk Committee | |||||
9.1 | The details of the responsibilities and authorities delegated to the RC are set out inAnnex Band section 9 ofAnnex Cto the ORs. | Responsibilitiesand Authorities | ||||
9.2 | The RC members as a group must have the necessary qualifications and skills to perform all of their duties. In particular the RC members, as a group, are expected to: | Qualifications | ||||
(i) | commit such time to the role as may be necessary for the proper discharge of their duties. An indication of the time expected for this purpose will be set out in each of the RC members’ letter of appointment; | |||||
(ii) | have experience and knowledge about banking and finance related risks and such other experience and knowledge as the Board considers desirable to enable the RC to perform its duties; and | |||||
(iii) | be able to monitor and assess the activity of the Group IA. | |||||
9.3 | Each RC member shall be independent as set out in section 2.2 ofAnnex Cto the ORs. | Independence |
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For the Secretary of the
Board of Directors
10 Role Profile and Expectations |
10 | Role Profile and Expectations | |||
10.1 | The Company Secretary acts as secretary to the Board and its committees. The details of the responsibilities and authorities delegated to the Company Secretary are set out in section 13 of the ORs. | In General | ||
10.2 | The Company Secretary must have the qualifications and skills the Board considers necessary for him to perform his duties. The Company Secretary cannot have any other employment and works on a 100% basis. | Expectations |
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Special Provision
11 Entry into Force; Amendments |
11 | Entry into Force; Amendments | |||
11.1 | These role profiles and role expectations come into effect on 1 January 2009, based on a Board resolution dated 4 December 2008. | Entry into Force | ||
11.2 | These role profiles and role expectations may be amended by the Board only with the approval of the SFBC. | Amendments |
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UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
www.ubs.com