Board of Directors

Members

The members of the Board of Directors are listed on pages 28 to 31 of the Annual Report. No member of the Board of Directors of Repower AG performs operational management tasks for the company. Members of the Board of Directors do not sit on the Executive Board of Repower AG or on that of any other Group company. In the three financial years preceding the year under review, no member of the Board of Directors was entrusted with any executive functions within the Repower Group. Some members of the Board of Directors perform executive functions for Axpo Holding AG (one of the principal shareholders) or its affiliated companies. Normal business relations exist with these companies.

Under the terms of the Articles of Association, no member of the Board of Directors may assume more than fifteen mandates at other legal entities, and no more than four of these may be at listed companies. Certain mandates are not subject to this limit (see Art. 23 Para 3 of the Articles of Association).

Election and term of office

The members and Chairman of the Board of Directors are elected by the general meeting on an individual basis. The term of office ends with the completion of the next Annual General Meeting. Newly elected members complete the terms of office of their predecessors. The Board of Directors currently comprises twelve members, the maximum permissible number under the Articles of Association. Re-election is possible. According to the Organisational Regulations, members of the Board of Directors must give up their seats on the board as a rule at the Annual General Meeting following the end of the year in which they reach 70 years of age. The Board of Directors may make exceptions to this rule.

The rules governing the appointment of the members of the Compensation Committee are detailed in the Compensation Report on page 34.

The independent proxy is elected by the Annual General Meeting for a term of office ending with the completion of the next Annual General Meeting; re-election is possible. The Annual General Meeting held on 29 April 2015 elected Dr Peter Philipp (Chur) as independent proxy.

Internal organisation

Apart from the election of the Chairman, the Board of Directors organises itself. It elects its Vice Chairman and Secretary; the Secretary need not be a member of the Board of Directors. There is also a Board Committee that performs the duties of a Nomination and Audit Committee, in addition to other responsibilities. The Board of Directors appoints the Board Committee from among its own members. The Chairman and Vice Chairman automatically serve on the Board Committee by virtue of their office. Members of the Board Committee are elected for the same term of office as the Board of Directors. The four members of the Board Committee are listed on pages 29 and 30 of the Annual Report. In addition to its duties as Nomination and Audit Committee, the Board Committee advises the Board of Directors on business that comes before it, and issues recommendations. It also has the authority to make final decisions on certain types of business (see Assignment of Authority and Responsibility for the Board of Directors and Executive Board). The organisation of the Compensation Committee is described in the Compensation Report on page 34.

Together with the Secretary and the CEO, the Chairman of the Board of Directors draws up the agenda for meetings of the Board of Directors and Board Committee. Members of the Board of Directors generally receive proposals relating to each agenda item eight days in advance of meetings. These proposals include background documentation as well as an evaluation and a motion by the Executive Board and – for meetings of the Board of Directors – by the Board Committee. The Board of Directors meets at the invitation of the Chairman or, if the latter is not available, of the Vice Chairman, as often as required to conduct its business, but at least twice a year. The Board of Directors generally meets at least once a quarter. The Board of Directors must be convened whenever one of its members or the CEO makes a written request to this effect, stating the reason.

The CEO and CFO generally attend every meeting of the Board of Directors. The other members of the Executive Board attend the meetings as and when required in order to explain the proposals. The Board of Directors basically constitutes a quorum if the majority of its members are present. The Board of Directors passes resolutions by a majority vote. The chairman does not have a casting vote. Minutes are taken of the business and resolutions of the Board of Directors and are submitted to the Board for approval at its next meeting.

The Board Committee and Board of Directors follow the same procedures in terms of convocation, procedure of the meetings and decisionmaking.

In the year under review the Board of Directors met twelve times, the Board Committee fifteen times and the Compensation Committee once. The Board Committee met eight times in its capacity as Audit Committee and once in its capacity as Nomination Committee. Meetings of the bodies normally last half a day.

Board Committee in its capacity as Audit Committee

The Board Committee, in its capacity as Audit Committee, evaluates the efficacy of the external audit and the functional effectiveness of the risk management processes. It can engage the external auditor or other external advisors to perform special audits for the purpose of internal control. The Board Committee also reviews the status of company compliance with various standards (annual compliance report). The committee critically reviews the individual and consolidated financial statements and the interim financial statements intended for publication; it discusses the financial statements with the CFO and, insofar as this is deemed necessary, with the head of the external auditors. Finally, it also decides whether the individual and consolidated financial statements can be recommended to the Board of Directors for submission to the Annual General Meeting. It evaluates the services and fees of the external auditors and verifies their independence. It also determines whether the auditing role is compatible with any consulting mandates.

Board Committee in its capacity as Nomination Committee

In its capacity as Nomination Committee the Board Committee prepares re-elections and new elections within the Board of Directors and the election of the CEO of the Repower Group, their deputy and the other Executive Board members.

Assignment of authority and responsibility to the Board of Directors and Executive Board

Types of authority granted to the Board of Directors and the Executive Board are defined in the Organisational Regulations and the related Assignment of Authority and Responsibility. The Board of Directors is responsible for the overall direction and strategic orientation of the Repower Group and for supervising the Executive Board. It reviews and determines on an annual basis the objectives and strategy of the Repower Group as well as the corporate policy in all sectors, and makes decisions regarding short- and long-term corporate planning. It also deals with the organisational structure, accounting structure, internal control system and financial planning, the appointment and discharge of the persons entrusted with management and representation (namely the CEO, deputy CEO and the other members of the Executive Board), preparation of the Annual Report, preparations for the Annual General Meeting and implementation of its resolutions, and making decisions on compensation policy and drawing up the Compensation Report. The Board of Directors has delegated the entire operational management of the Repower Group to the CEO. The CEO has delegated certain management functions to the members of the Executive Board. Some types of business or transactions must be presented to the Board of Directors and/or the Board Committee for a decision in accordance with the Assignment of Authority and Responsibility (Annex to the Organisational Regulations).

Information and control instruments vis-à-vis the Executive Board

At each meeting of the Board of Directors and the Board Committee, the CEO and the members of the Executive Board report on current business developments, important business transactions and the status of major projects. Aside from these meetings, any member of the Board of Directors may ask the CEO to provide information about the course of business and also, if the Chairman agrees, about individual transactions. Supervision and control of the Executive Board is handled by approving the annual planning and on the basis of detailed quarterly reporting comparing actual and target figures. Quarterly reporting includes data on the volumes of energy sold and procured, the income statement and balance sheet (including expected values for the most important key figures, namely energy sales, total operating revenue, operating income, profit, cash flow, capital expenditure, property, plant and equipment, total assets, equity, economic value added), energy trading risks (market risks and counterparty risks) and key projects. Important key figures on the individual markets (in particular the Swiss and Italian markets), trading and the Corporate Centre also form part of the quarterly reporting. Repower also does segment reporting in accordance with IFRS 8 (for more information, see page 52 “Segment reporting” and page 99 ff.). The Board of Directors also receives quarterly progress reports and final performance reports on key projects, as well as – if specifically requested – status reports on individual business activities. Annual and long-term planning covers corporate objectives, key projects and financial planning. In addition there are risk management and auditors' reports to facilitate the assessment of management and the risk situation. Repower has a risk management system which is described in detail in a policy issued by the Board of Directors. At the end of each year the Board of Directors defines the risk strategy for the following financial year. Significant risks must be brought to the attention of the Board of Directors at least once a year, with quarterly updates to advise the Board of Directors of any changes in these risks. A description of the risk and financial risk management policies of the Repower Group can be found on pages 58 to 62. The auditors draw up a comprehensive report once a year documenting the key findings of their audit.