Internal
Exhibit 1.02
Organization
Regulations
of
UBS AG
Valid as of 1 March 2024
2
Contents
Abbreviations and definitions
3
Introduction
1 Basis and purpose
5
2 Organization of UBS AG
5
Board of Directors
3 Membership
7
4 Constitution
7
5 Responsibilities and authorities
7
6 Meetings
8
7 Resolutions
9
8 Information rights
10
9 Self-assessment
10
10 Chairman
10
11 Vice Chairmen
11
12 Company Secretary
11
13 Board Committees
11
Executive Board
14 Delegation
12
15 Executive Board
12
16 President of the Executive Board
13
17 Chief Financial Officer
14
18 Chief Operations and Technology Officer
14
19 Chief Risk Officer
15
20 General Counsel
15
21 Chief Compliance and Governance Officer
15
22 Head Human Resources & Corporate Services
15
23 Integration Officer
15
24 Regional Presidents
16
25 Divisional Presidents
16
26 Committees
16
Internal Audit
27 Scope, responsibilities, authorities and reporting
17
28 IA Executive UBS AG
17
Special provisions
29 Authority to sign
18
30 Form of signature
18
31 Conduct of Board and EB members
18
32 Entry into force, amendments
19
Annexes
A Organizational chart of UBS AG
21
B Charter of the Committees of the Board
22
C Key Approval Authorities (kept internally)
3
Abbreviations and definitions
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
AC
Audit Committee
AGM
Annual General Meeting of the shareholders of UBS AG
ALCO
Asset and Liability Committee
AoA
Articles of Association of UBS AG
BD(s)
Business division(s), organizational units of the business as set out in the UBS Group AG Organization
Regulations
Board/BoD
Board of Directors of UBS AG; non-executive Board members who do not perform management func-
tions within UBS AG
Business Regulations
Regulations issued by the Executive Board
CCGO
Chief Compliance and Governance Officer of UBS AG
CFO
Chief Financial Officer of UBS AG
Chairman
Chairman of the Board
Chairpersons
Board members who chair the Committees
CO
Swiss Code of Obligations
Committees
Committees of the Board as set out in section 2.1
Committees’ charter
Charter of the Committees of the Board setting out the objectives, composition, authorities and re-
sponsibilities of the permanent Committees
Company Secretary
Company Secretary of the Board
CompCo
Compensation Committee
Corporate Bodies
The Board and bodies of UBS AG exercising delegated Board functions, such as the Committees,
the EB, committees established by the EB, IA of UBS AG or other bodies mentioned herein
COTO
Chief Operations and Technology Officer of UBS AG
CRO
Chief Risk Officer of UBS AG
Divisional
President/DP
Divisional Presidents are the heads of the respective BDs, as set out in the UBS Group AG Organization
Regulations
EGM
Extraordinary General Meeting of the shareholders of UBS AG
Executive Board / EB
Executive Board of UBS AG
EB Committees
Committees of the EB as set out in section 26
Financial statements
Quarterly and annual financial statements of UBS AG
FINMA
Swiss Financial Market Supervisory Authority
FRC
Finance and Risk Committee
Functional Head / FH
CFO, COTO, CRO, GC, CCGO, Head HR&CS and IO
GC
General Counsel of UBS AG
GF
Group Functions, which comprises the functions as set out in the UBS Group AG Organization Regula-
tions
Group CEO
Group Chief Executive Officer
Group IA
Internal Audit of the Group
Head HR&CS
Head Human Resources & Corporate Services of UBS AG
HR
Human Resources
IA
Internal Audit of UBS AG under the oversight of the IA Executive UBS AG
IA Executive UBS AG
IA Executive of UBS AG
ICAAP
Internal Capital Adequacy Assessment Process
IO
Integration Officer of UBS AG
ORs
Organization Regulations of UBS AG including annexes
4
Other UBS Entities
Entities of the Group which are neither Significant Group Entities nor Significant Regional Entities
PRA
Prudential Regulation Authority (Bank of England)
President of the EB
President of the Executive Board of UBS AG
RC
Risk Committee
Regional President /
RP
Regional Presidents as set out in the UBS Group AG Organization Regulations and in the RP terms of
reference
Risk Authorities
Internal document setting out the high-level delegated authorities for risk management and control
for UBS AG
Shareholders
Shareholders of UBS AG
Significant Branches
Branches of subsidiaries of the Group subject to enhanced standards of corporate governance as des-
ignated by the Group CEO
Significant Group Enti-
ties / SGEs
Significant subsidiaries of the Group subject to enhanced standards of corporate governance as desig-
nated by the UBS Group AG Governance and Nominating Committee
Significant Regional
Entities / SREs
Subsidiaries of the Group subject to enhanced standards of corporate governance as designated by
the Group CEO
SOX
Sarbanes–Oxley Act
Stakeholders
Persons, groups or organizations that have a direct or indirect stake in UBS AG and may, as a result,
affect or be affected by UBS AG’s actions, objectives and policies
UBS/Group
UBS Group AG and its subsidiaries; the UBS group of companies
UBS AG Entities
All subsidiaries (excluding Special Purpose Entities) which are either wholly or majority, directly or indi-
rectly owned or otherwise controlled by UBS AG and which are intended to be held indefinitely
UBS Group AG
UBS Group AG; the listed parent company of the Group
Vice Chairman
The Vice Chairman of the Board as set out in section 11
5
Introduction
1
Basis and purpose
1.1
Basis
These ORs are enacted by the Board of UBS AG pursuant to article 716b of the CO and
articles 24 and 26 of the AoA.
1.2
Purpose
The purpose of these ORs is:
(i)
to implement and supplement requirements contained in applicable laws, regulations
and the AoA having regard to pertinent codes of best practice; and
(ii)
to define the functions, responsibilities and authorities of UBS AG’s Corporate Bodies
and their members.
Mandatory provisions of applicable laws, rules and regulations or rules contained in the
AoA take precedence over the ORs.
2
Organization of UBS AG
2.1
Organization in general
UBS AG and its business are organized as follows:
(i)
The Board, under the leadership of the Chairman, has the ultimate responsibility for
the direction, supervision and control of UBS AG, and performs the other duties de-
scribed herein or as prescribed by mandatory provisions of law.
The Board is responsible for deciding all matters and taking business decisions where
such decisions exceed the authority delegated by the Board to the Committees, the
EB or the President of the EB.
(ii)
As provided by mandatory law, rules and regulations, the AoA or these ORs, the ex-
ecutive management of UBS AG is delegated to the EB under the leadership of the
President of the EB. Under consideration of applicable regulatory requirements, the
President of the Executive Board of UBS Switzerland AG may not be a member of the
UBS AG EB.
(iii)
The following permanent Committees assist the Board in the performance of its re-
sponsibilities:
(a)
the Audit Committee;
(b)
the Compensation Committee; and
(c)
the Risk Committee.
(iv)
The following permanent EB Committees assist the EB in the performance of its re-
sponsibilities:
(a)
the Asset and Liability Committee; and
(b)
the Finance and Risk Committee.
2.2
Group
steering
UBS Group AG, as the listed parent company of the Group, controls directly or indirectly
all subsidiaries, including UBS AG, and leads the Group by setting a harmonized strategic
direction. UBS Group AG further sets principles and organizational structures to enable
efficient and coordinated management of the Group and control of its subsidiaries. Not-
withstanding this, the legal independence of UBS AG, including formal decision-making
by the Corporate Bodies as required under applicable constitutional documents, and the
provisions of applicable local laws, rules and regulations relating to UBS AG, must be ob-
served to the extent legally required.
6
2.3
UBS AG as a subsidiary
of UBS Group AG
UBS AG is a subsidiary of UBS Group AG. As such it may fulfill strategic, financial and
management functions not only for itself, but also with respect to the Group. In view of
this function, the Corporate Bodies of UBS AG may have to resolve on matters that per-
tain both to UBS AG and the Group. To this end, UBS AG:
(i)
develops and implements its business strategies and business plans, as well as appro-
priate risk management and internal control frameworks, in accordance with strate-
gies, targets and policies defined by the Group;
(ii)
manages its subsidiaries in accordance with the UBS entity framework. UBS AG issues
the necessary regulations, policies and instructions, ensures logistical support, main-
tains commensurate control functions and allocates the authority necessary for an
orderly and efficient conduct of the business of its subsidiaries; and
(iii)
works closely with the BDs and the GF of the Group in order to identify and benefit
from synergies and to realize earnings potential and cost savings.
2.4
Banking business of
UBS AG
The banking business and support operations of UBS AG are performed by itself and its
direct or indirect subsidiaries. Each subsidiary has its own constitutional documents, which
must be in line with applicable local laws, rules and regulations.
2.5
Transparency,
collaboration and
reporting within
the Group
Subject
to and in accordance with applicable local laws, rules and regulations, Corporate
Bodies are bound to ensure transparency and collaboration within the Group and may
have additional responsibilities and reporting lines within the Group in addition to their
reporting lines within UBS AG. Any resulting conflicts of interest shall be governed by the
provisions of the Organization Regulations (or similar constitutional documents) of the
companies concerned.
7
Board of Directors
3
Membership
3.1
Election proposal
In consultation with the Chairman, the Board proposes candidates for election by the
shareholders.
3.2
Independence of
Board members
The Board’s proposal for election ensures that one
-third of the Board members will be in-
dependent. For this purpose, independence is determined in accordance with FINMA cir-
cular 2017/1 “Corporate governance – banks.” Furthermore, there must be a sufficient
number of Board members who meet the independence criteria for the Committee
members set out in the annex “Charter of the Committees of the Board.” The Chairman
does not need to be independent.
3.3
Notification duty
Each Board member must notify the Chairman immediately if circumstances change in a
manner that may affect their independence.
3.4
Expectations of the
Board members
The Board, as a group, must have the necessary qualifications, skills and diversity to per-
form all Board duties. In particular, the Board must together possess financial literacy, ex-
perience in banking and risk management, as well as international experience, including
experience of international financial matters, and knowledge of the duties of directors.
Candidates for election to the Board shall be considered in light of their personal experi-
ence and abilities, including any specialist knowledge or skills required to fulfill specific
Board functions as outlined herein, as well as their ability to contribute to building a com-
plementary and effective Board.
4
Constitution
4.1
Number of members
The Board consists of five to twelve Board members as per article 18 of the AoA.
4.2
Term of office
The term of office for each Board member is one year, pursuant to
article 19 of the AoA.
Subject to election by shareholders, Board members are normally expected to serve for a
minimum of three years. No Board member may serve for more than 10 consecutive
terms of office, in exceptional circumstances the Board can extend this limit.
4.3
Constitutional meeting
The Board constitutes itself at its first meeting following the AGM.
In this meeting
(i)
the Vice Chairmen;
(ii)
the Chairpersons of the Committees; and
(iii)
the Committee members
are appointed by the Board.
The Board may
remove these Board members from their special functions at any time.
5
Responsibilities and authorities
5.1
In general
In addition to mandatory provisions of law, rules, regulations and the AoA
, the Board has
the responsibilities and authorities set out in these ORs.
5.2
Supervision
The Board is responsible for the overall direction, supervision and control of UBS AG and
its management, as well as for supervising compliance with applicable laws, rules and
regulations.
5.3
Ultimate responsibility
The Board has ultimate responsibility for the success of UBS AG and for delivering sus-
tainable shareholder value within a framework of prudent and effective controls and sub-
ject to the parameters set by the Group. It decides on UBS AG’s strategy and the neces-
sary financial and human resources upon recommendation of the President of the EB and
sets UBS AG’s values and standards to ensure that its obligations to shareholders and
other stakeholders are met.
8
5.4
Strategy and financial suc-
cess
Taking into account the
Group’s overall strategy and interests, the Board’s ultimate re-
sponsibility for strategy and financial success includes in particular:
(i)
deciding the strategy of UBS AG upon recommendation of the President of the EB,
taking into account the proposals and alternatives presented;
(ii)
approving the risk management and control framework of UBS AG, including the
overall risk appetite;
(iii)
deciding whether UBS AG should enter substantial new business areas or exit an ex-
isting business area, in cases where the entry or exit is not covered by the current ap-
proved strategic framework; and
(iv)
approving major acquisitions, mergers, disposals or capital expenditure, including de-
cisions on major changes to the company structure, major changes in its Significant
Group Entities, and other projects of strategic importance for UBS AG.
5.5
Finance
With respect to the ultimate responsibility for the financial situation, the Board has in par-
ticular the following duties:
(i)
approving the applicable accounting standards and financial control frameworks, as
well as significant changes to them;
(ii)
annually reviewing and approving the three-year strategic plan and one-year operat-
ing plan of UBS AG, including the financial objectives and a capital allocation frame-
work, as well as the capital and liquidity plans;
(iii)
annually reviewing and approving of the ICAAP of UBS AG;
(iv)
reviewing and approving the annual financial statements of UBS AG and, where ap-
plicable, the quarterly financial statements; and
(v)
reviewing and approving the consolidated annual and quarterly financial statements,
and the consolidated annual report of UBS AG prior to its submission to the AGM.
5.6
Organization
The Board is responsible for establishing an appropriate business organization, including
in particular:
(i)
approving and regularly reviewing the governance principles and the management
structures as set out herein;
(ii)
appointing and removing EB members, the Company Secretary and the IA Executive
UBS AG and reviewing their performance;
(iii)
overseeing the effectiveness of the business organization and management informa-
tion system implemented by the EB;
(iv)
supervising the internal control system;
(v)
approving the charter for IA and monitoring IA; and
(vi)
approving the compensation and benefits principles of UBS AG.
5.7
Meetings of shareholders
The Board has a duty to convene AGMs and EGMs, prepare the agenda for such meetings
and implement resolutions adopted by the shareholders.
5.8
Loss of equity
In case of financial difficulties or insufficient equity, the Board must undertake all steps re-
quired under applicable law.
5.9
Delegation
Within the limits of applicable law, regulations and the AoA, the Board may delegate part of
its responsibilities and authorities to:
(i)
the Committees;
(ii)
individual Board members;
(iii)
the EB; and
(iv)
individual EB members.
5.10
Advice from third parties
The Board and the Committees may, in performing their duties, take advice from third
parties.
6
Meetings
6.1
Number of meetings
The Board meets as often as business requires, and at least six times a year.
6.2
Convening meetings
Board meetings are convened by the Chairman. Upon written request, including reasons,
of any Board member or the President of the EB addressed to the Chairman, he shall con-
vene a Board meeting in accordance with sections 6.3 and 6.4.
6.3
Invitation
The Chairman or, if absent, one of the Vice Chairmen invites the Board members to the
Board meetings in writing (including by e-mail or other electronic means).
9
6.4
Agenda and notice
period
The invitation contains the agenda and must be sent to Board members and other at-
tendees as a rule at least five business days prior to the date of the Board meeting to-
gether with all necessary supporting material. In exceptional cases, supporting material
may be sent later to allow the Board to receive the latest available information. This ap-
plies in particular to updates on financial data.
In time
-critical cases (as determined at the Chairman’s discretion), a Board meeting may
be held and the supporting material may be sent at shorter notice.
6.5
Chair
Board meetings are chaired by the Chairman or, if absent, by one of the Vice Chairmen
or, in their absence, by another Board member selected by the Board members present.
6.6
Attendees
The Board may hold Board meetings as determined by the Chairman:
(i)
with or without the participation of the President of the EB and all or some of the
other EB members; and
(ii)
with the participation of other persons, who are invited to attend.
6.7
Meeting format
Board meetings may be held in person or by audio or video conference.
6.8
Minutes of Board
meetings
The minutes (including its annexes as presented to the Board) contain all Board resolu-
tions made and reflect in a general manner the considerations which led to the decisions
made. Dissenting opinions of and votes cast by Board members must also be reflected in
the minutes.
6.9
Form of minutes,
inspection rights
The
minutes must be signed by the Board member chairing the meeting (in accordance
with section 6.5) and the keeper of the minutes and must be made available for review
prior to the next Board meeting at which these shall be approved. Board members are en-
titled to examine the minutes of any Board meeting at any time.
7
Resolutions
7.1
Quorum of attendance
The presence of either the Chairman or one of the Vice Chairmen as well as of the
major-
ity of the Board members is required to pass valid Board resolutions. If this quorum is not
present, the Chairman can seek a circular resolution of the Board (see section 7.4). No
such quorum is required for decisions confirming, implementing and amending resolu-
tions relating to capital increases (article 22(2) of the AoA).
7.2
Quorum of resolutions, de-
cisive vote
Board resolutions are passed by an absolute majority of the votes of Board members pre-
sent; in case of a tie, the Chairman’s vote is decisive (article 22(1) of the AoA).
7.3
Resolutions on items
not
If time
-critical matters arise after a Board meeting has already been convened, such mat-
ters may be discussed at the Board meeting and Board resolutions made if a majority of
all Board members present agree. If feasible, a revised agenda will be sent to all Board
members prior to the meeting. Absent Board members are informed of the resolution
made after the Board meeting.
7.4
Circular resolutions
Board resolutions may be passed in writing (including by e
-mail or other electronic means)
if no material discussions are required, the matter is time-critical or has been pre-
discussed. A proposal for a circular resolution must be communicated to all Board mem-
bers and is only deemed to have passed if:
(i)
more than two-thirds of all Board members cast a vote or give written notice that
they abstain; and
(ii)
an absolute majority of all Board members participating in this circular resolution ap-
prove the proposed resolution; and
(iii)
no Board member requests a Board meeting in relation to the subject matter of the
proposed Board resolution within three business days of receiving notice of the pro-
posal.
7.5
Effect of circular
resolutions
A circular resolution is as binding as a Board resolution adopted at a Board meeting and
must be recorded under a separate heading in the Board minutes prepared pursuant to
sections 6.8 and 6.9 for the next Board meeting.
10
8
Information rights
8.1
Right of information
Board members have the right to access all information concerning the business and the
affairs of UBS AG as may be necessary or helpful for them to fulfill their duties as Board
members.
8.2
Request for information
during Board meetings
At Board meetings, any Board member is entitled to request information on any matter
relating to UBS AG regardless of the agenda, and the Board or EB members present must
provide such information to the best of their knowledge.
8.3
Request for
information
outside of Board meetings
Should a Board member require information or wish to review documents outside a Board
meeting, such request must be routed through the Company Secretary and addressed to
the Chairman.
8.4
Request for information
outside of Committee
meetings
Should a Chairperson require information or wish to review documents outside a Com-
mittee meeting, they can, within the range of responsibilities of their Committee, address
their request to a member of the EB directly, to the IA or to external auditors. The Chair-
man and the President of the EB must be informed as appropriate.
9
Self-assessment
9.1
Board self
-assessment
At least annually, the Board reviews its own performance, as well as the performance of
each of the Committees. Such a review seeks to determine whether the Board and the
Committees function effectively and efficiently.
9.2
Performance
evaluation
In light of the annual performance evaluation, the Board must consider whether any
changes should be made to the membership of the Board or Committees.
10
Chairman
10.1
Election
The Board proposes the Chairman who in turn is elected by shareholders at the general
meeting.
10.2
In general
The Chairman leads the Board. He further coordinates the tasks within the Board and, in
particular, calls Board meetings and sets their agenda.
10.3
Shareholders’ meetings
In accordance with article 13 of the AoA the Chairman presides over the AGMs and
EGMs.
10.4
Coordination of
Committee work and
Chairman’s attendance
The Chairman coordinates, together with the Chairpersons, the work of all Committees.
In consultation with the relevant Chairperson, the Chairman or one of the Vice Chairmen
may attend meetings of the Committees.
10.5
External communication
The Chairman, together with the President of the EB, undertakes responsibility for UBS
AG's reputation, is further closely involved in and responsible for ensuring effective com-
munication with shareholders and stakeholders, including government officials, regulators
and public organizations.
The Chairman is the primary representative of the Board and, together with the President
of the EB, of UBS AG with the media.
10.6
Relationship with Board
and EB
The Chairman establishes and maintains close and constructive working relationships with
and promotes open communication between the Board and the President of the EB and
the other EB members, providing advice and support to them while respecting that execu-
tive management responsibility is delegated to the EB. Where appropriate, the Chairman
ensures effective challenge of the President of the EB and the EB by the Board and the
Committees and fosters ongoing and effective monitoring of performance.
10.7
Further responsibilities
and authorities
Further details of the responsibilities and authorities delegated to the Chairman are set
out in the annexes to these ORs.
11
11
Vice Chairmen
11.1
Appointment and authori-
ties
The Board appoints one or more Vice Chairmen. A Vice Chairman is required to lead the
Board in the absence of the Chairman, to provide support and advice to the Chairman
and to undertake such specific additional duties or functions as the Board may entrust to
him from time to time.
11.2
Further responsibilities
and authorities
Further details of the responsibilities and authorities delegated to the Vice Chairmen are
set out in the annexes to these ORs.
12
Company Secretary
12.1
Appointment and function
At the constitutional meeting of the Board, the Board
appoints a Company Secretary,
who acts as secretary to the Board and its Committees.
12.2
Responsibilities and autho-
rities
The Company Secretary prepares the agenda for each Board meeting, keeps the Board
minutes and the Committees’ minutes and assists the Board and its members in coordi-
nating and fulfilling their duties. In accordance with section 8.3, the Company Secretary
coordinates requests for information from the members of the Board outside of Board
meetings and informs the President of the EB of such requests as appropriate.
12.3
Reporting
The Company Secretary reports to the Chairman.
12.4
Official
documents
The Company Secretary is responsible for keeping UBS AG’s official company documents
and records including their certification.
13
Board Committees
13.1
Permanent and other
Committees
The Board establishes the AC, the Compensation
Committee and the RC as permanent
Committees. The Board may set up other Committees, including ad hoc Committees, if
deemed appropriate or necessary.
13.2
Appointment
From among its members the Board appoints the Committee members and the respective
Chairpersons.
13.3
Responsibilities and autho-
rities
Based on articles 24 and 26 of the AoA, the Board delegates certain responsibilities
and authorities to the Committees pursuant to the annexes to these ORs. The overall re-
sponsibility for such delegated competences remains with the Board.
12
Executive Board
14
Delegation
14.1
Delegation of
management
The Board delegates the executive management of UBS AG as set out in section 2.1(ii).
14.2
Further delegation
by the EB
The President of the EB and the EB may further delegate certain responsibilities and au-
thorities and may empower further delegation of such responsibilities and authorities.
Such delegations must be in writing, and clear rules on responsibilities, authorities and
accountabilities must be established. Specific responsibilities and authorities delegated by
the EB to an EB Committee will be set forth in a resolution adopted or a charter approved
by the EB.
14.3
Time
-critical matters
The EB will establish arrangements to ensure that decisions are made in a time
-critical
business matter, should the responsible EB member be unable to act.
15
Executive Board
15.1
Composition and appoint-
ment
Under the leadership of the President of the EB, the EB is
comprised of the members de-
tailed in sections 16 to 25 of these ORs and such further EB members as appointed by the
Board upon proposal of the President of the EB.
15.2
Responsibilities
and authorities
Under the leadership of the President of the EB,
the EB has executive management re-
sponsibility for UBS AG and its business. This includes, but is not limited to, developing
and implementing UBS AG strategies approved by the Board and which take into account
the Group’s strategies, budgeting, planning and resource allocation, and evaluating and
monitoring business performance. This also includes ensuring the efficient use of the fi-
nancial resources of UBS AG in accordance with Group guidelines, policies and govern-
ance over intra-divisional treasury allocations.
The EB develops, implements and maintains an appropriate and adequate business organ-
ization designed to ensure compliance with applicable laws and regulations and an ap-
propriate management information system.
The EB is also responsible for ensuring effective management and coordination of issues on
behalf of UBS AG which arise from interactions and interdependencies between UBS AG
and all entities of the Group or UBS AG and the BDs or GF. Notwithstanding this, the legal
independence of UBS AG and the provisions of applicable local laws, rules and regulations
must be observed to the extent legally required.
15.3
EB as risk council
The EB acts as the risk council of UBS AG. It has overall
responsibility for establishing and
implementing risk management and control within UBS AG. It manages the risk profile of
UBS AG as determined by the Board and the RC and is supported by the FRC. The EB de-
termines its requirements for risk reporting, including improvements and changes to the
reports, and receives periodic updates on risk data limitations.
15.4
Preparation of Board deci-
sions
Where proposals for decisions must be made to the Board, the EB prepares such pro-
posals and supports the Board in its decision-making process.
15.5
Further duties
The EB is furthermore responsible for all management matters not reserved under the
AoA or the ORs to any other person or Corporate Body.
15.6
Meetings, agenda and no-
tice period
The EB meets at least once every month or as appropriate. The agenda must be sent to
the EB members at least five calendar days prior to the date of the EB meeting together
with all necessary supporting material. In time-critical cases, an EB meeting (called by the
President of the EB as required or at the request of one EB member addressed to the Pres-
ident of the EB) may be held and the supporting material may be sent on shorter notice.
EB meetings are chaired by the President of the EB or, if absent, by the nominated deputy
President of the EB. EB meetings may be held in person or by audio or video conference.
13
15.7
Quorum of attendance
The presence, either in person or by audio or video conference, of a majority of the EB
members is required to pass valid EB resolutions.
15.8
Quorum of resolutions
The resolutions of the EB are passed by the majority of the votes of the EB members pre-
sent. The President of the EB has the power to overrule any EB resolution. If the President
of the EB exercises this power, he must inform the Chairman as well as the EB immediate-
ly.
15.9
Minutes of EB meetings
Minutes are taken of all EB meetings. They contain all resolutions made by the EB. The
minutes are sent to all EB members and to the Chairman. Board members may inspect the
EB minutes in accordance with section 8. Section 6.9 applies mutatis mutandis to the EB
minutes.
15.10
Circular resolutions
With respect to circular resolutions of the EB, sections 7.4 and 7.5 apply mutatis mutan-
dis.
15.11
Matters requiring immedia-
te attention
With regard to matters which require immediate attention, and if it is not feasible to con-
vene an audio or video conference or to proceed by circular resolution within the time
available, the President of the EB may, together with two other EB members, make deci-
sions, which have the effect of EB resolutions. EB members who could not be reached in
time must be informed together with the Chairman as soon as possible. Section 7.5 ap-
plies mutatis mutandis to such resolutions.
15.12
Assessment
At least annually the President of the EB assesses the performance of the EB. Such a re-
view seeks to determine whether the EB functions effectively and efficiently. In light of the
annual assessment, the President of the EB must consider whether any changes should be
made to the composition of the EB.
15.13
Further duties of EB mem-
bers
In addition, to the responsibilities for each EB member set out below, further details of the
responsibilities and key authorities delegated to the EB members are set out in the annex-
es to these ORs and the relevant Business Regulations or terms of reference.
16
President of the Executive Board
16.1
Appointment
The President of the EB is appointed by the Board upon proposal of the Chairman.
16.2
Function, substitution
The President of the EB is the highest executive officer of UBS AG and has responsibility
and accountability for the management and performance of UBS AG. The President of
the EB nominates a deputy from within the EB, who is confirmed by the Board. The depu-
ty President of the EB shall temporarily exercise all responsibilities and authorities if the
President of the EB should be incapacitated or unavailable to exercise the function as
President of the EB.
16.3
Main responsibilities
and authorities
The President of the EB has the overall day
-to-day management responsibility for UBS AG.
In particular, he is responsible for:
(i)
convening and presiding over the EB meetings;
(ii)
leading the business and strategic planning and forecasting;
(iii)
the financial results of UBS AG;
(iv)
exercising all authorities allocated to UBS AG which are not otherwise delegated;
(v)
providing regular updates on the business to the Group CEO, as required;
(vi)
effective management of UBS AG’s financial resources, people, infrastructure and risks; and
(vii)
ensuring effective collaboration with the Group.
The President of the EB assumes a leading role in preparing the Board’s consideration of
UBS AG’s strategy, risk and compensation principles. Together with the Chairman, he has
the responsibility for UBS AG’s reputation.
16.4
Right to overrule decisions
The President of the EB has an all-encompassing right to information about and examina-
tion of all matters handled in the business. He has the power to overrule any decisions
made by any management body, including any resolution by the EB (see section 15.8).
14
16.5
Reporting to the Board
The President of the EB ensures that the Chairman and the Board are kept informed in a
timely and appropriate manner on all matters falling within the scope of their responsibili-
ties as well as important business developments, issues or decisions taken by the EB in
particular with regard to matters which may have a material financial, operational or rep-
utational impact on UBS AG.
Further, the President of the EB (either personally or through any other EB member) regu-
larly informs the Board on:
(i)
key performance indicators and other relevant financial data of UBS AG;
(ii)
existing and emerging risks, issues and mitigating measures;
(iii)
updates on developments in important markets and on peers; and
(iv)
information on all issues which may affect the supervisory or control function of the
Board.
16.6
Reporting by EB members
Each member of the EB detailed in sections 17 to 2
5 below reports directly to the Presi-
dent of the EB and the relevant function within the Group and shall inform the President
of the EB or EB as appropriate of material matters and key developments within the scope
of their responsibilities. The Functional Heads have an obligation to advise the Chairman
and relevant Committees on significant issues arising in the field of their responsibilities.
17
Chief Financial Officer
17.1
Responsibilities and autho-
rities
The CFO has in particular the following responsibilities:
(i)
managing UBS AG’s financial accounting, controlling, forecasting, planning and re-
porting processes;
(ii)
ensuring transparency in and assessing the financial performance of UBS AG;
(iii)
developing UBS AG’s inorganic strategy in collaboration with the EB and supporting
the EB members in mergers and acquisitions, as well as equity investment topics, by
monitoring the progress of key inorganic growth initiatives;
(iv)
managing and controlling UBS AG’s tax affairs, treasury and capital management, in-
cluding funding and liquidity risk, and UBS AG’s regulatory capital ratios;
(v)
ensuring asset and liability management by balancing consumption of UBS AG’s fi-
nancial resources;
(vi)
consulting with the AC to make proposals to the Board regarding the standards for
accounting to be adopted by UBS AG and defining the standards for financial report-
ing and disclosure; and
(vii)
under the supervision of the AC, coordinating the working relationships with the ex-
ternal auditors.
18
Chief Operations and Technology Officer
18.1
Responsibilities and autho-
rities
The CO
TO has in particular the following responsibilities:
(i)
formulating the approach, objectives, financial and execution plans for the Opera-
tions and Technology Office area in support of the BDs and GF operating out of UBS
AG;
(ii)
driving digitalization, delivering IT services, tools and infrastructure, including cyber
protection and IT security, in line with the needs of the BDs and GF operating out of
UBS AG;
(iii)
overseeing the prioritization of the technology enabled change initiatives;
(iv)
directing and governing all IT development and engineering management activities;
and
(v)
delivering operational services, maintaining and overseeing UBS AG's crisis manage-
ment operations and providing data governance.
15
19
Chief Risk Officer
19.1
Responsibilities and autho-
rities
The CRO has in particular the following responsibilities:
(i)
the development of UBS AG’s risk management and control framework (including
risk principles and risk appetite) for the credit, market, country, liquidity, funding,
model and environmental and social risk categories, as well as the implementation of
independent control frameworks for these risk categories, on the basis of and in ac-
cordance with the framework approved by the Board, including:
(a)
risk measurement, aggregation, portfolio controls and risk reporting; and
(b)
taking decisions on transactions, positions, exposures, portfolio limits and allowances
in accordance with the risk control authorities delegated to the CRO; and
(ii)
monitoring and challenging UBS AG’s risk-taking activities for the risk categories un-
der CRO responsibility.
20
General Counsel
20.1
Responsibilities and autho-
rities
The GC has in particular the following responsibilities:
(i)
managing UBS AG’s legal affairs and ensuring effective and timely assessment of le-
gal matters impacting UBS AG or its businesses;
(ii)
providing the legal advice required by UBS AG; and
(iii)
management and reporting of all litigation and other significant contentious matters,
including all legal proceedings which involve UBS AG.
21
Chief Compliance and Governance Officer
21.1
Responsibilities and autho-
rities
The CCGO has in particular the following responsibilities:
(i)
developing UBS AG’s risk management and control framework (including taxonomies
and risk appetite) for non-financial risks as well as implementing the independent
control frameworks for these risks;
(ii)
developing UBS AG’s governmental policy and regulatory approach;
(iii)
coordinating external governmental and regulatory relations and overseeing im-
portant regulatory matters, including key regulatory change programs across UBS
AG;
(iv)
managing the firm’s new business governance process;
(v)
developing global and local recovery and resolution plans and defining adequate re-
solvability improvement measures;
(vi)
developing UBS AG’s organization and legal entity structure, as well as corporate
governance standards; and
(vii)
governing UBS AG’s internal and external investigations portfolio and performing
important investigations.
22
Head Human Resources & Corporate Services
22.1
Responsibilities and autho-
rities
The
(i)
defining and executing an HR strategy aligned to UBS AG’s objectives, positioning
UBS AG as employer of choice and providing HR services to employees as well as
strategic advice to line managers and EB members supporting them to attract, en-
gage, develop and retain talent;
(ii)
supplying real estate infrastructure and general administrative services to UBS AG;
and
(iii)
directing and controlling all supply and demand management activities, supporting
UBS AG with its third-party risk and sourcing strategies and managing UBS AG’s
near-/offshore, outsourcing and supplier-related processes.
23
Integration Officer
23.1
Responsibilities and autho-
rities
The IO has in particular the following responsibilities
:
(i)
developing integration strategy with regard to Credit Suisse within agreed design
principles and in accordance with the UBS AG and Group strategy;
(ii)
coordinating with integration teams and, if required, other EB members to ensure
coherent and consistent execution of integration plans and milestones;
(iii)
prioritizing integration activities and monitoring overall progress, coordinating man-
agement of operational and execution risks and issues, as well as overseeing devel-
opment of migration plans and interdependencies;
(iv)
ensuring regular communication and appropriate escalation to the EB, or other rele-
vant governance bodies; and
(v)
challenging timelines, operating models, synergies, and deliverables, as appropriate.
16
24
Regional Presidents
24.1
Responsibilities and autho-
rities
The Regional Presidents have in particular the following responsibilities:
(i)
cross-divisional collaboration; and
(ii)
representing UBS AG to the broader public in their region.
25
Divisional Presidents
25.1
Responsibilities and autho-
rities
The Divisional Presidents have in particular the following responsibilities:
(i)
proposing BD strategies in line with the UBS AG and Group strategy taking into ac-
count input from the Regional Presidents;
(ii)
the operation and management of their BD; and
(iii)
controlling and administering the dedicated financial resources, risk appetite, people
and infrastructure of the BD.
26
Committees
26.1
EB Committees
Pursuant to section 14.2 the EB establishes
(i)
the ALCO; and
(ii)
the FRC
as permanent EB Committees.
26.2
Composition
The composition is specified in dedicated terms of reference for each EB
Committee.
26.3
Appointment
The appointment is specified in dedicated terms of reference for each EB
Committee.
26.4
Responsibilities and autho-
rities
The EB Committees have the responsibilities and authorities as set out in the terms of ref-
erence of the respective committee:
(i)
the ALCO is responsible for managing UBS AG’s assets and liabilities in line with the
UBS AG and Group strategy and regulatory requirements;
(ii)
the FRC is responsible for supervising and controlling UBS AG’s business, financial
and risk profile of the overall UBS AG standalone as well as the entity’s business ac-
tivities in Switzerland and cross-jurisdictional branch-related matters, in line with the
UBS AG and Group strategy and regulatory requirements. The FRC is also responsible
for ensuring the financial and risk profile of UBS AG standalone complies with the
agreed risk appetite, by ascertaining that appropriate and timely actions are taken.
26.5
Meetings and resolutions
The sections 15.6 to 15.12 apply mutatis
mutandis.
26.6
Reporting
The EB
17
Internal Audit
27
Scope, responsibilities, authorities and reporting
27.1
Scope
IA is the internal audit function for UBS AG.
27.2
Responsibilities
IA independently, objectively and systematically assesses in particular the:
(i)
soundness of UBS AG’s risk and control culture;
(ii)
reliability and integrity of financial and operational information, including whether
activities are properly, accurately and completely recorded, and the quality of underly-
ing data and models; and
(iii)
design, operating effectiveness and sustainability of:
(a)
processes to define strategy and risk appetite as well as the overall adherence to
the approved strategy;
(b)
governance processes;
(c)
risk management, including whether risks are appropriately identified and man-
aged;
(d)
internal controls, specifically whether they are commensurate with the risks tak-
en;
(e)
remediation activities; and
(f)
processes to comply with legal and regulatory requirements, internal policies,
and UBS AG’s constitutional documents and contracts.
IA also conducts special audits at the request of the AC, or other Board members, Com-
mittees or the President of the EB in consultation with the AC.
27.3
Charter
Details of the role, responsibilities and authorities of IA are set out in the charter for
Group IA. The charter is also to be endorsed by the Board for its applicability to UBS AG.
27.4
Access rights
IA possesses unrestricted auditing rights within UBS AG; it has access at all times to all ac-
counts, books, records, systems, property and personnel to fulfill its auditing responsibili-
ties. The IA Executive UBS AG has open, direct and unrestricted access to the Chairman,
the RC and the AC, as well as to the President of the EB.
27.5
Independence
IA is independent in determining its activities, in particular when defining audit scope and
executing audit engagements. IA reports are not subject to any instructions or restrictions,
and its authority to audit is unrestricted.
28
IA Executive UBS AG
28.1
Reporting
The IA Executive UBS AG reports directly to the Chairman. In addition, the IA Executive
UBS AG has a functional reporting line to the AC, as well as to the Head Group IA, as set
forth in the AC charter.
The IA Executive UBS AG must inform the AC of the results of the annual internal audit
plan and the status of annual internal audit objectives and must be in regular contact
with the AC.
28.2
Appointment
The IA Executive UBS AG is appointed by the Board in consultation with the Chairman
and the AC, based on a proposal by the Head Group IA.
18
Special provisions
29
Authority to sign
29.1
In general
Signing in the name of UBS AG requires two authorized signatures to be binding. Any
employee of UBS AG having one of the following ranks or functions is authorized to sign,
jointly with another authorized signatory, on behalf of UBS AG:
(i)
the Chairman and each of the Vice Chairmen;
(ii)
each of the EB members;
(iii)
the IA Executive UBS AG and the Company Secretary;
(iv)
each of the Managing Directors, Executive Directors and Directors or senior employ-
ees with equivalent ranks;
(v)
each of the Associate Directors (including “Prokuristen,” as applicable); and
(vi)
for specified locations, each of the Authorized Officers (including “Handlungs-
bevollmächtigte,” as applicable).
29.2
Signing policy
The GC issues a signing policy for UBS AG, specifying all details, including the scope of
signature authorities and possible extensions, exceptions to the joint signature authority
principle, and the possibility for signatories of the Group to sign on behalf of UBS AG. In
addition, UBS AG Entities establish their own rules, according to mandatory provisions of
local laws, rules and regulations.
30
Form of signature
30.1
Signature form
All authorized signatories sign by adding their
signature to the name of the legal entity on
whose behalf they act.
31
Conduct of Board and EB members
31.1
Duty of care and loyalty
Each member of the Board and the EB is under a duty to carry out their responsibilities
with due care and to safeguard and further the interests of UBS AG and of all of its
shareholders.
31.2
Conflicts of interest
The Board and EB members must arrange their personal and business affairs, including
their affairs with regard to a related person or company, so as to avoid, as much as possi-
ble, an actual, perceived or potential conflict of interest.
31.3
Disclosure of conflict
of interest
Each Board member must disclose to the Chairman, and each EB member must disclose
to the President of the EB, any conflict of interest generally arising or relating to any mat-
ter to be discussed at a meeting, as soon as the Board or EB member becomes aware of
its existence.
31.4
Procedural measures
Unless exceptional circumstances dictate that in the best interests of UBS AG a Board or EB
member with a conflict of interest shall not participate in the discussions and decision-
making involving the interest at stake, the Board or EB member with a conflict of interest
shall participate in discussions and:
(i)
a double vote (a vote with and a vote without the conflicted individual) shall take
place;
(ii)
a binding decision on the matter requires the same outcome in both votes;
(iii)
the Chairman or the President of the EB must advise the respective Corporate Body
of the conflict of interest; and
(iv)
the existence of the conflict must be recorded in the meeting minutes.
In the event of doubt, the Chairman or the President of the EB shall request the respective
Corporate Body to determine whether a conflict of interest or exceptional circumstances ex-
ist.
Further, section 2.5 applies where EB members have additional reporting lines within le-
gal entities of the Group.
19
31.5
Duty of confidentiality
Except for information already in the public domain, each Board and EB member shall
handle all information relating to UBS AG learned during the performance of their duties
with the utmost discretion at all times. Such information may only be disclosed to third
parties with prior written clearance from the Chairman or the President of the EB. This ob-
ligation and duty continues even after the term of office of the Board or EB member has
expired for as long as the relevant information remains confidential.
31.6
Benefits of Board and
EB members
If a Board or EB member becomes aware of the fact that they may receive a financial or
non-financial benefit other than any salary, remuneration or other benefit from UBS AG,
as a result of employment with UBS AG, that person must:
(i)
promptly inform the Board, in the case of a Board member or the President of the EB;
and
(ii)
promptly inform the President of the EB, in the case of an EB member other than the
President of the EB.
32
Entry into force, amendments
32.1
Entry into force
These ORs replace the former regulations of 12 June 2023 governing the internal organi-
zation of UBS AG and come into effect on 1 March 2024, based on a Board resolution of
UBS AG dated 25 January 2024.
32.2
Amendments
These ORs may be amended by the Board only with the approval of FINMA.
20
Annex A –
Organizational
chart of UBS AG
21
Organizational chart of UBS AG
22
Annex B
– Charter of the
Committees of the Board
23
Contents
Introduction
1 Basis and purpose
24
Membership and constitution
2 Number of Committee members and their independence
25
3 Constitution
25
Responsibilities and authorities
4 Delegation of responsibilities and authorities
26
5 Audit Committee
26
6 Compensation Committee
27
7 Risk Committee
28
8 Further responsibilities and authorities
29
9 Delegation to a member or subcommittee
29
10 Information rights
29
11 Meeting with third parties
29
Meetings and resolutions of the Committees
12 Meetings
30
13 Resolutions and information rights
30
Reporting
14 Regular reporting
31
15 Special reporting
31
Special provisions
16 Confidentiality
32
17 Self-assessment and adequacy review
32
24
Introduction
1
Basis and purpose
1.1
Basis
This Committees’ charter is enacted by the Board pursuant to articles 716
–
716b CO, arti-
cles 24 and 26 of the AoA and sections 5.9 and 13.3 of the ORs.
1.2
Purpose
The purpose of this Committees’ charter is to set out the objectives, composition and re-
sponsibilities of the permanent Board Committees, being:
(i)
the Audit Committee;
(ii)
the Compensation Committee; and
(iii)
the Risk Committee.
25
Membership and constitution
2
Number of Committee members and their independence
2.1
Minimum number of Com-
mittee members
Each Committee must have at least three Committee members.
2.2
Independence
Each Committee must consist of members of the Board who:
(i)
with respect to the AC, are all independent as defined by section 3.2 of the ORs;
(ii)
with respect to the Compensation Committee and RC, are independent, in a majority,
as defined by section 3.2 of the ORs.
At least one member of the RC must also be a member of the Compensation Committee.
2.3
Presence of the Chairman
The Chairman may, in consultation with the relevant Chairperson, attend the meetings of
Committees as a non-voting guest.
3
Constitution
3.1
Appointment and removal
by the Board
The Chairperson and the Committee members are appointed pursuant to section 4.3 of
the ORs, and the Board may remove any Committee member or any Chairperson at any
time. Should a vacancy arise on any Committee, even if the minimum number of Commit-
tee members pursuant to section 2.1 of this Committees’ charter is still met, the Board
may appoint the missing member from among its members for the remaining term of of-
fice.
26
Responsibilities and authorities
4
Delegation of responsibilities and authorities
4.1
In general
Pursuant to section 13.3 of the ORs, the Committees have the responsibilities and author-
ities set out in the annexes to the ORs.
5
Audit Committee
5.1
In general
The function of the AC is to support the Board in fulfilling its oversight duty relating to fi-
nancial reporting and internal controls over financial reporting, the effectiveness of the
external and internal audit functions as well as of whistleblowing procedures.
Management is responsible for the preparation, presentation and integrity of the financial
statements, while the external auditors are responsible for auditing financial statements.
The AC’s responsibility is one of oversight and review.
5.2
Responsibilities and autho-
rities
The AC’s responsibilities and authorities are to:
(i)
Financial statements:
(a)
monitor the integrity of the financial statements and any announcements related
to financial performance, and review significant financial reporting judgements
contained in them, before recommending their approval to the Board;
(b)
advise the Board on whether the annual report and financial statements, taken as a
whole, are fair, balanced and understandable, and provide the information neces-
sary for shareholders to assess the company’s position and performance, business
model and strategy;
(c)
review the organization and completeness of the financial-reporting process includ-
ing UBS AG’s internal control system and procedures as they relate to the integrity
of the financial statements, taking into account the reports provided by the EB, the
external auditors, IA, regulators or other information as determined by the Com-
mittee to be appropriate;
(d)
review management’s SOX 404 report in relation to internal controls over financial
reporting;
(e)
review significant accounting policies and practices, and compliance with account-
ing standards; and
(f)
review arrangements for compliance with UBS AG’s legal, regulatory and other re-
quirements (including tax matters) as they relate to the integrity of the financial
statements or financial report;
(ii)
External audit:
(a)
oversee the relationship with and assess the qualifications, expertise, effectiveness,
independence and performance of the external auditors and their lead audit part-
ner; support the Board in reaching a decision in relation to the appointment, reap-
pointment or dismissal of the external auditors and 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;
(c)
oversee all audit and permitted non-audit services provided by the external auditors
and establish such policies as the Committee deems appropriate;
(d)
annually review the external auditors’ summary of adjusted and unadjusted differ-
ences; and
(e)
review the regulatory audit plan and the results of regulatory audits;
27
(iii)
IA:
(a)
monitor and assess the effectiveness, independence and performance of the IA Ex-
ecutive UBS AG and IA;
(b)
approve IA’s annual audit plan and objectives including subsequent important
amendments;
(c)
monitor IA’s discharge of its annual audit objectives; and
(d)
order special audits to be conducted either by IA or by mandating third parties and
review and approve such request from other Board members, Committees or the
President of the EB;
(iv)
Whistleblowing and investigations:
(a)
review the effectiveness of the firm’s whistleblowing policies and procedures and
ensure that appropriate whistleblowing mechanisms are in place;
(b)
review on a quarterly basis the levels of new and pending whistleblowing cases
and reports on complaints made regarding accounting, auditing or other matters;
(c)
review on a quarterly basis reports on internal investigations; and
(d)
conduct or direct any investigation, including the retention of external advisors and
consultants (at UBS AG’s expense), as it considers necessary to discharge its re-
sponsibilities; and
(v)
Human Resources:
(a)
annually provide input on the performance of the CFO, GC, CRO and CCGO to the
President of the EB; and
(b)
review and make recommendations to the Board regarding decisions relating to
the hiring and dismissal of the CFO.
6
Compensation Committee
6.1
In general
The function of the Compensation Committee is to support the Board in its duties to set
guidelines on compensation and benefits, to oversee implementation thereof, to approve
certain compensation and to scrutinize executive performance.
6.2
Responsibilities and autho-
rities
The Compensation Committee’s responsibilities and authorities are to:
(i)
Compensation strategy and principles:
(a)
periodically review the compensation strategy and principles and propose any ma-
terial changes to the Board for approval; and
(b)
evaluate the effectiveness of pay for performance results of UBS AG;
(ii)
EB performance targets and objectives:
(a)
propose, upon proposal of the Chairman, financial and non-financial performance
targets and objectives for the President of the EB for approval by the Board;
(b)
review, upon proposal of the President of the EB, the performance framework for
the other EB members; and
(c)
inform the Board of the President of the EB's financial and non-financial perfor-
mance targets and objectives, as well as the performance framework for the other
EB members;
(iii)
EB performance assessments:
(a)
propose upon proposal of the Chairman, the President of the EB's performance as-
sessment for approval by the Board;
(b)
propose upon proposal of the President of the EB the performance assessments of
the other EB members for approval by the Board; and
(c)
inform the Board of the performance assessments of all EB members, including the
President of the EB;
(iv)
Compensation framework and plans:
(a)
approve key features of the compensation framework and plans for the non-
independent Board members and EB members;
(b)
be informed of key features of the compensation framework and plans for em-
ployees other than EB members;
(c)
approve key terms of any new or amended compensation plans or other compen-
sation arrangements with a material financial, reputational or strategic impact or
significant use of UBS Group AG shares;
(d)
be informed of key terms of any new or amended pension and benefit plans with a
material financial, reputational or strategic impact;
(e)
approve the share ownership policy for EB members; and
(f)
propose, upon proposal of the Chairman, the remuneration/fee framework for in-
dependent Board members for approval by the Board.
28
(v)
Compensation governance:
(a)
approve key terms for material individual variations to standard employment and
termination agreements for non-independent Board members and, upon proposal
of the Chairman, for the President of the EB and, upon proposal of the President
of the EB, for other EB members;
(b)
approve the engagement of and fees for any external advisors/consultants retained
by the Compensation Committee; considering factors relevant to the advisors’ in-
dependence from management;
(c)
approve material public disclosures on UBS AG compensation matters;
(d)
meet with the RC annually to ensure that the compensation framework supports
appropriate risk awareness and management as well as appropriate risk-taking;
and
(e)
be informed of major regulatory developments, shareholder initiatives and best
practices in executive compensation;
(vi)
Other compensation competences:
(a)
for employees within UBS AG, approve the aggregated and/or total individual
compensation of certain employees (including independent control functions)
based on regulatory requirements; and
(b)
review business performance and other variables that impact annual variable com-
pensation; and
(vii)
Other competences related to specific regulatory requirements:
(a)
review and approve the Remuneration Policy Statement to be submitted annually
to the PRA;
(b)
review and approve as appropriate any information provided to UBS AG share-
holders with respect to the approval of the ratio between variable and fixed com-
pensation for employees in the European Union; and
(c)
make recommendations as appropriate where it becomes aware of any event or
matter that would justify the operation of malus or clawback for UBS AG London
Branch staff in accordance with compensation plan rules.
7
Risk Committee
7.1
In general
The function of the RC is to oversee and support the
Board in fulfilling its duty to supervise
and set an appropriate risk management and control framework in the areas of:
(i)
financial and non-financial risks; and
(ii)
balance sheet, treasury and capital management, including funding, liquidity and equity
attribution.
The RC considers the potential effects of the aforementioned risks on UBS AG’s reputation.
7.2
Responsibilities and autho-
rities
The RC’s responsibilities and authorities are to:
(i)
Risk management and control:
(a)
review and propose to the Board the guiding principles and framework for risk
management and control (including risk appetite, delegation of risk authorities and
major risk limits) relative to UBS AG’s operations, assess management’s respective
proposals and recommend any required changes to the Board;
(b)
review and approve the risk appetite (including objectives and binding scenarios)
relative to UBS AG’s activities and risk profiles, including allocation of respon-
sibilities within the risk management and control framework;
(c)
review and propose to the Board the risk, capital, liquidity and funding, and bal-
ance sheet section of the annual report of UBS AG;
(d)
periodically assess the appropriateness of major policies and procedures adopted
by the EB relating to the risk management and control of significant risks;
(e)
review and make recommendations to the Board based on proposals from the EB
in relation to material risk limits and periodically review 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 AG as approved by the Board;
(f)
review and approve the principal characteristics of UBS AG’s risk measurement
framework (including changes thereto) used to identify, model, measure, monitor
and report risks;
(g)
monitor and oversee the risk profile of UBS AG within the context of the Board-
determined risk profile, risk capacity and limit structure;
(h)
systematically review high-risk areas of UBS AG and assess the effectiveness of the
steps taken by the EB to manage or mitigate such risks;
(i)
review and assess the asset and liability management framework, liquidity and
funding;
29
(j)
review regulatory framework reforms affecting areas within the scope of the RC’s
mandate and recommend any required changes to the Board;
(k)
consider UBS AG’s strategy to deal with anticipated or existing high-level risks and
assist the Board by reviewing and assessing management’s proposals in relation to
strategy;
(l)
review management’s assessments of UBS AG’s non-financial risk exposures and
related risk-oriented activity plans;
(m)
periodically review material communications (including formal assessments) be-
tween UBS AG and its principal regulators;
(n)
review projects and remediation activities (as determined by the RC) undertaken by
the management to address critical changes to the risk management/control envi-
ronment; and
(o)
periodically meet with the Compensation Committee to ensure that the compen-
sation framework appropriately reflects risk awareness and management, and en-
sures appropriate risk-taking;
(ii)
Risk reporting:
(a)
determine risk reporting requirements that allow for an effective oversight by the
RC and communicate changes to report owners if reporting requirements are not
met or change;
(b)
review risk reports, including reports from management that assess the likelihood
of risks materializing, the monitoring of emerging trends via forecasts or stress
tests, the adequacy and appropriateness of the internal controls to manage those
risks and that contain agreed measures to reduce risks or deal with specific risk sit-
uations including stress situations; and
(c)
receive periodic updates on limitations that prevent full risk data aggregation in the
risk reports; and
(iii)
Human Resources:
(a)
annually provide input on the performance of the CRO, CFO, GC and CCGO to the
President of the EB; and
(b)
review and make recommendations to the Board regarding decisions relating to
the hiring and dismissal of the CRO and the CCGO.
8
Further responsibilities and authorities
8.1
Further responsibilities
and authorities
The Board may entrust further powers and duties to the Committees by Board resolution.
9
Delegation to a member or subcommittee
9.1
Further delegation by
the Committees
Each Committee may delegate some of its tasks to one of its members or to a subcommit-
tee comprised of two or more of its members. Such delegations shall be recorded in the
Committee’s minutes and the Chairman must be informed.
10
Information rights
10.1
Committees
In accordance with the procedure set out in section 8.4 of the ORs, each Committee may
request any relevant information or special reports from any EB member or IA on matters
relating to its respective responsibilities set out in this Committees’ charter.
10.2
Committee members
For the information rights of each Board member, see section 8 of the ORs.
11
Meeting with third parties
11.1
Meeting with third parties
The Committees may, in performing their duties, take advice from and meet as a body with
third parties. In consultation with the President of the EB, they may meet with regulators.
The Chairperson shall inform the Chairman accordingly.
30
Meetings and resolutions of the Committees
12
Meetings
12.1
Number of meetings
Each Committee meets as often as its business requires, but at least four times a year for
the AC, the Compensation Committee and the RC.
The AC and RC hold at least four joint meetings a year.
The Compensation Committee and RC periodically hold joint meetings.
12.2
Request, invitation,
agenda, notice period,
chair and format
Committee meetings, including joint meetings, are called and held in compliance with the
rules set out in the ORs (sections 6.2 to 6.5 and 6.7 of the ORs to be applied mutatis mu-
tandis).
12.3
Presence of third parties
at Committee meetings
Each Chairperson may, on their own motion or upon request of any Committee member
or the Chairman, invite EB members, as well as other persons, to attend Committee meet-
ings. The President of the EB will be informed accordingly.
12.4
Special rules for the AC
The AC holds Committee meetings:
(i)
normally with the participation of the IA Executive UBS AG, representatives of the ex-
ternal auditors, the President of the EB, the CFO and the Controller and Chief Ac-
counting Officer; and
(ii)
periodically, only with the participation of the IA Executive UBS AG, the external audi-
tors, or with members of management, or a combination of any of the aforemen-
tioned.
12.5
Special rules for the RC
Generally, the President of the EB, the CFO, the CRO, the GC, the CCGO, the IA Executive
UBS AG and representatives of the external auditors participate (to the extent necessary)
in each meeting of the RC. The invitation of other persons is at the discretion of the RC.
12.6
Resolutions
Resolutions are passed by an absolute majority of the Committee members present; in
case of a tie, the decision is passed on to the Board and decided in accordance with sec-
tion 7.2 of the ORs. Sections 7.2 to 7.4 of the ORs apply mutatis mutandis with regard to
circular resolutions.
12.7
Minutes
The minutes of Committee meetings, including joint meetings, must fulfill the conditions
set out in sections 6.8, 6.9 and 7.5 of the ORs and be distributed to the Chairman.
13
Resolutions and information rights
13.1
Resolutions and informati-
on rights
Sections 7, 8.2, 8.3 and 8.4 of the ORs apply mutatis mutandis to the decision-making
process and the information rights of the Committees and the Committee members.
31
Reporting
14
Regular reporting
14.1
In general
Each Chairperson ensures that the Chairman and the Board are kept informed in a timely
and appropriate manner. Each Chairperson (either personally or through another Commit-
tee member) regularly reports to the Board at the Board meetings on the current activities
of their Committee and on important Committee issues, including all matters falling with-
in the duties and responsibilities of the Board, namely:
(i)
proposals for resolutions to be considered, or other action to be taken by the Board;
(ii)
resolutions and decisions made by the Committee and the material considerations
that led to such resolutions and decisions; and
(iii)
activities and important findings of the Committee.
14.2
Submitting of proposals
and recommendations
Each Chairperson submits, in writing, the proposals and resolutions mentioned in sections
14.1(i) and (ii) of this annex to the Board unless such proposals are contained in the
Committee minutes; the remaining reporting is generally done orally.
14.3
Annual reporting of
the Committees
Each Committee annually submits a report to the Board, detailing the activities of the
Committee during the previous twelve months.
15
Special reporting
15.1
AC
Following the completion of the audit and the annual financial statements, the AC
Chair-
person submits annually to the Chairman, for the attention of the Board:
(i)
the AC’s assessment of the qualification, independence and performance of the ex-
ternal auditors;
(ii)
the AC’s assessment of the design of UBS AG’s internal control system for financial
reporting and the coordination and interaction between IA and the external auditors;
and
(iii)
a recommendation regarding the audited financial statements in UBS AG’s annual re-
port.
32
Special provisions
16
Confidentiality
16.1
Special rule
The deliberations of the Compensation Committee are handled with the utmost discre-
tion and are to be communicated outside of the Committee only to the extent permitted
by the Chairperson. The Chairman is exempted with regard to the confidentiality of delib-
erations.
17
Self-assessment and adequacy review
17.1
Self-assessment and ade-
quacy review
Each Committee reviews the adequacy of its charter at regular intervals, but at least an-
nually, and recommends to the Board any changes considered to be necessary or appro-
priate. For the self-assessment, section 9 of the ORs is to be applied mutatis mutandis.
UBS AG
P.O. Box, CH-8098 Zurich
P.O. Box, CH-4002 Basel
www.ubs.com