Board of Directors

Composition of the Board of Directors

The Nomination and Compensation Committee (NCC) strives to achieve a BoD composition with appropriate professional backgrounds and experience as well as diversity among the members of the BoD, including gender diversity and excluding age or tenure limitations.

During the reporting period, the following members formed part of the BoD. As at 31 December 2021, the BoD consisted of nine members:

Individual Board members

Compensation of the Board of Directors

The shareholders’ meeting shall approve annually and separately the proposals of the BoD in relation to the maximum aggregate compensation of the BoD for the period until the next ordinary shareholders’ meeting. The compensation of the members of the BoD consists of an annual base fee and an additional compensation awarded for duties pursued in BoD committees as Chairpersons or ordinary members. In line with Art. 18 of SoftwareONE’s AoI and to ensure the independence of the members of the BoD in executing their supervision duties, the compensation of the members of the BoD is in the form of a fixed amount (that is, no performance-related variable compensation component in place). Moreover, based on peer group and benchmarking as mentioned in the compensation report, it is in accordance with best market practice standards.

Effective from the 2020 AGM, the BoD’s total compensation is paid out 60% in cash and 40% in SoftwareONE shares. The shares allocated as part of the members of the BoD’s total compensation are blocked for a period of three years. Through the introduction of a share element, the long-term focus of the BoD in performing its duties is further strengthened and the interest further aligned with that of SoftwareONE’s shareholders. More details on compensation and post-employment benefits of the BoD can be found in the compensation report.

The members of the BoD may only be granted loans and credits up to a maximum amount of CHF 1,000,000, at market-based conditions and in compliance with the applicable rules of abstention.

Rules in the articles of association regarding compensation

Reference is made to the AoI and the compensation report regarding the additional amount for the compensation of members of the EB appointed after the vote of the AGM on compensation as well as to loans, credits and pension benefits of Board members and members of the EB, which follow the rules in the articles of association concerning the principles on performance-related compensation and on the allocation of equity securities, conversion and option rights.

Duties and responsibilities of the Board of Directors

The legal foundation of the BoD’s responsibilities is provided by Art. 716a of the Swiss Code of Obligations.

The BoD has a supervisory role and takes strategy, finance and personnel decisions in accordance with the law, the AoI and the OrgR. It also supports, advises and encourages management. The overall guiding principle for the BoD is full accountability to all shareholders and stakeholders of SoftwareONE and a style marked by a culture of openness and mutual respect.

The BoD meets at least six times per year (four quarterly report meetings, a strategy off-site, and a medium-term planning and budgeting meeting) and meetings are held in person but can also be held via telephone or video conference or by means of other electronic media. Owing to the COVID-19 situation, of the six ordinary BoD meetings that were held in 2021, all but the one on 15 September were held by video conference. The strategy meeting includes cultural aspects, including how to drive cultural change to foster overall good corporate governance. Further focus is placed on company performance and integrity as well as on how to accelerate integration in relation to external growth such as mergers and acquisitions. In addition, a call with the BoD members is held to approve the motions of the Audit Committee (AC) for the year-end reporting. Extraordinary meetings are held if and when urgent decisions are required.

Environmental, Social & Corporate Governance (ESG)

To realize the ambitions harbored by the BoD for a sustainable future of SoftwareONE, the BoD launched an ESG initiative in 2021 which is ongoing and which requires the creation of a structure to ensure that the voices within the company are heard and considered. To assist the BoD with preparation work and the channeling of information, the BoD created an ad hoc ESG Committee that is chaired by Isabelle Romy, who is uniquely suited to guide the project. The ad hoc ESG Committee has mandated the CEO to drive this initiative, relying considerably on his passion and deep-rooted commitment to the cause. With the support of an ESG Steering Group consisting of the EB, the Chief Human Resources Officer, the Chief Marketing Officer and flanked by several working groups comprising employees who have exposure to or who are already heavily involved in sustainable projects, the CEO is managing the sustainability journey for the company. The details are further contained in the Sustainability Section of the Annual Report.

In parallel to the ESG journey, SoftwareONE continues to invest in its Academy, through ONE Impact and with a range of initiatives, such as ONE Tree Planted, Harmony Day and various local community support schemes. SoftwareONE is proud to support these causes with the passion and backing of its employees.

Interaction with shareholders and stakeholders

A key mandate of the BoD is to build and maintain an ongoing dialogue with its shareholders and other stakeholders. Engagement discussions with investors and proxy advisors outside financial and strategy matters such as governance, compensation and corporate social responsibility are steered by the Chairperson of the BoD, supported by the Lead Independent Director and the Chairperson of the Nomination and Compensation Committee.

Specific Board activities during the reporting period

During the 2021 financial year, six ordinary meetings of the BoD were held, with an average length of 6.5 hours. The average attendance at BoD meetings in 2021 was 100% (for individual attendances, see section Availability and External mandates below).

In addition to the regular meeting agenda items, in 2021 the BoD specifically focused on topics such as:

• Strategy review and implementation, in particular concerning specific growth areas, industry verticals and M&A;
• The InterGrupo integration;
• Aligning with the Microsoft roadmap;
• Driving the services portfolio;
• Customer trends, structural industry changes, new technologies and innovation;
• Global talent management and succession planning, including in relation to the EB and the BoD;
• BoD assessment;
• Navigating the challenges of the global pandemic;
• Reviewing ESG strategies and projects;
• Audit Committee and Nomination and Compensation Committee matters.

Board of Directors’ internal organization

The BoD has delegated certain responsibilities, including the preparation and execution of resolutions, to two committees. In addition, to ensure that it is part of the dialogue on ambitions and is able to lend full support, the BoD has introduced an ad hoc ESG Committee. The responsibility for the duties and powers assigned to these committees is retained by the BoD.

The BoD has established the following two standing committees:

• Audit Committee (AC);
• Nomination and Compensation Committee (NCC).

Each standing committee consists of an independent Chairperson and at least two other members of the BoD. The NCC consists of four members which are elected annually by the General Meeting of shareholders. The duties and authorities of the committees are set forth in the Audit Committee Charter and the Nomination and Compensation Committee Charter, respectively, as well as in SoftwareONE’s OrgR. The committees’ operating principles are aligned with and complementary to those applicable for the overall BoD.

BoD committees are structured non-redundantly and working topics are clearly assigned and handled by only one committee. The BoD Chairperson coordinates committee work in case of potential overlaps. All materials used in BoD committee meetings are made available to all BoD members, who are invited to contact the committee Chairperson, the BoD Chairperson or the CEO with any clarifying questions (exceptions may apply to materials of the NCC).

There are no overlaps of directors between the two committees and both committees are chaired by an independent member of the BoD.

The BoD has established the additional key positions of Vice-Chairperson and Lead Independent Director, whose duties and competencies are described in the sections Vice-Chairperson of the Board of Directors and Lead Independent Director of the OrgR. The functions of the Vice-Chairperson and the Lead Independent Director can be combined and be performed by the same BoD Member. The Vice-Chairperson or Independent Lead Director will chair the Board and any general meeting in the absence of the Chairperson.

Chairperson of the Board of Directors

The Chairperson is entrusted with leading and managing the BoD and is responsible for establishing an appropriate structure and governance system that enables the BoD to render its duties efficiently and in the best interests of the company. The Chairperson encourages alternative views and constructive dissent, leveraging individual insights of BoD members while keeping the focus on the agenda topics and driving aligned decision-making.

The Chairperson further represents the opinions and views of the BoD towards SoftwareONE’s internal and external stakeholders. In exercising these duties, the Chairperson is guided by SoftwareONE’s conflict of interest policies and, if needed, will be supported by the Lead Independent Director.

In cooperation with the CEO, the Chairperson ensures that the information flows on all aspects of the company which are relevant for the meeting preparation, deliberations and decision-making are made available to all members of the BoD. In case of an emergency, when immediate action is required to safeguard the interests of the company, and where a regular BoD resolution cannot be reasonably passed in due time, the Chairperson, has the power, together with the CEO or any other appropriate member of the BoD or the EB, to make all decisions and actions which otherwise would be reserved for the BoD. If the Chairperson is absent, this entitlement falls to the Vice-Chairperson or the Lead Independent Director. The Chairperson shall promptly inform all members of the BoD of such decisions and actions and they shall be confirmed and properly recorded in the minutes at the next meeting of the BoD.

The power and duties of the BoD Chairperson are set out in Section 3.8 of the OrgR.

Vice-Chairperson of the Board of Directors

The OrgR revised in 2021 stipulates that the role of the Lead Independent Director (LID) and that of the Vice-Chairperson can be combined and performed by the same BoD Member. Throughout 2021, the LID assumed the role of the Vice-Chairperson.

If the Chairperson is temporarily unable or unavailable to exercise the function, the LID either assumes the Chairperson’s duties him or herself or delegates them within the BoD or to suitable company representatives.

Lead Independent Director

The BoD assigns such powers and duties to the Lead Independent Director (LID) as it deems necessary (see Section 3.10 of the OrgR).

The LID has the right and duty to call meetings of the independent BoD members if they deem it necessary, but in particular, when the independent decision-making process seems to be compromised. The LID further acts as the point of contact for BoD members and investors if they have concerns with respect to the independent decision-making process.

The BoD further provides the independent BoD members under the lead of the LID with financial resources to mandate external advice if this is deemed necessary by the LID to foster independent decision-making of the BoD.

Moreover, the LID supports the Chairperson in governance and strategy-related investor engagements. At the request of shareholders, the LID would conduct these engagements without the Chairperson.

Availability and statutory provisions regarding external mandates

SoftwareONE’s AoI provide that the company’s BoD is composed of at least three and not more than 12 members, including the Chairperson of the BoD.

No member of the BoD may hold more than four additional mandates in listed companies and more than six mandates in non-listed companies.

Mandates within the meaning of this provision shall mean mandates in the supreme managing or administrative body of a legal entity, which is required to be entered in the commercial register or a corresponding register abroad. Mandates in different legal entities under common control or owned by the same beneficial owner shall be deemed to constitute a single mandate.

The following mandates are not subject to these limitations:

1. Mandates in companies which are controlled by the company or which control the company;
2. Mandates held at the request of the company or companies controlled by it. No member of the BoD or of the EB may hold more than 10 such mandates;
3. Mandates in associations, charitable organizations, foundations, trusts and employee welfare foundations. No member of the BoD or of the EB may hold more than six such mandates.

All members of the BoD remained within the statutory maximum numbers of outside mandates in listed and non-listed companies and organizations. The following table shows the availability and outside mandates of the members of the BoD:

Board of Directors’ independence assessment

The BoD generally defines the independence of its members within the meaning of the provisions of the Swiss Code. Accordingly, all non-executive members of the BoD who have never been a member of the EB (of the company or any direct or indirect subsidiary of the company), or who were members thereof more than three years ago, and who have no or comparatively minor business relations with the company (or any direct or indirect subsidiary of the company), are considered independent. Consequently, all members of the BoD are non-executive and considered independent according to the Swiss Code.

The BoD is committed to ensuring an independent decision-making process and is aware that BoD members representing large shareholders, even if they are the company’s founders who continue to contribute to its prosperous development, may be considered non-independent. Consequently, the BoD appointed a Lead Independent Director with far-reaching competencies as well as independent Chairpersons to the Nomination and Compensation Committee and the Audit Committee. Through their casting votes, these two Chairpersons ensure the independent decision-making of both committees.

Independent decision-making/conflict management

The CEO, CFO and, as directed by the CEO, other EB members are required to attend meetings of the BoD to provide detailed information on the current state of the business and offer their views on strategic questions. EB members have no voting rights and will leave the room in case discussions and/or decisions concern the EB or their own position. A private meeting with BoD members will only be held before or at the end of each Board meeting.

In 2021, the CEO, CFO and other EB members participated in all six of the six meetings of the BoD. The CEO informs the members of the BoD in a monthly letter about SoftwareONE’s business performance and about material events affecting the company. During BoD meetings, each director may request and receive information from other directors, the CEO, the EB and other persons present on all affairs relating to SoftwareONE or its subsidiaries.

In each regular BoD meeting, the Chairpersons of the AC, the NCC and most recently the Chairperson ad hoc ESG Committee will provide the BoD with an update of the committees’ work.

In case information or, to the extent where it is necessary to perform their duties, examination of the business records is requested by a member of the BoD outside of a meeting, such a request must be addressed to the Secretary of the BoD and be approved by the Chairperson of the BoD. If the request concerns a potential conflict of interest for the Chairperson, it shall be addressed to the BoD for decision.

The BoD has the power to mandate external advisors if an outside view is deemed necessary for an independent decision-making of the BoD. Third parties (for example legal counsels, auditors or financial and other advisors) are admitted to BoD meetings on an exceptional basis if proposed by a BoD member or by the CEO and approved by the Chairperson. In 2021, the BoD invited external experts to two of its meetings, the AC to four of its meetings and the NCC to three of its meetings.

The agenda-setting for the BoD annual cycle and for individual meetings is the remit of the Chairperson. In case the Chairperson is considered non-independent, the agenda-setting will be conducted together with the Lead Independent Director, who must approve the set agenda. Meeting minutes reflect the deliberations and decisions taken by the BoD including, if requested, dissenting opinions of and votes cast by members of the BoD. The Board secretary will make available to the members of the BoD a copy of the minutes once they have been signed. Members of the BoD may examine the minutes of any meeting at any time.

Audit Committee

Key responsibilities and duties

The AC is composed of at least three members of the BoD. As at 31 December 2021, the AC was composed of four members. The members of the AC and the Chairperson are appointed annually by the BoD, which aims to appoint non-executive and independent (within the meaning of the Swiss Code) members of the BoD. The Chairperson of the AC must be an independent BoD member other than the Chairperson of the BoD. The members, including the Chairperson of the AC, should be experienced in financial and accounting matters. The term of office of the AC members ends at the closing of the next Annual General Meeting. Re-appointments are possible. The AC meets whenever required by the business, and at least four times per year.

The AC supports the BoD in the fulfilment of its duties as per Art. 716a CO in the areas of financial controls (supervision of internal and external auditing, monitoring of financial reporting), supervision of persons entrusted with the management of the group (assessing the effectiveness of internal and external control systems), risk management processes and oversight of key non-financial processes (corporate social responsibility and compliance). Its duties and responsibilities are set out in the AC Charter.

Audit Committee activities in the reporting period

In 2021, the AC held four meetings by video conference, taking place in March, June, August and December, with an average duration of 2:30h. The committee focused on a number of key areas, including but not limited to the activities described below. Specifically, the AC:

• Discussed the coverage of the group audit;
• Evaluated the liquidity reserves;
• Discussed the impact of COVID-19 on liquidity and the business portfolio;
• Reviewed the risk map and internal and external audit plans;
• Reviewed the draft 2020 annual report and the draft 2021 half year report;
• Reviewed internal policies, including the treasury policy.

The AC sets the audit plan for a period of several years as well as the scope of the internal and external audits and approves the guidelines for the work of the Internal Audit department as well as for the company’s compliance and supply chain organization. It reviews and approves the internal and external audit plans, changes to the plans, activities, scope and budget as well as accounting policies. The AC approves both the fees for the external auditors as well as the salary of the Head of Internal Audit. The AC challenges the appropriateness of risk-based estimates and judgements as well as the methods used to account for unusual transactions. Furthermore, the AC defines the organizational structure of the Internal Audit function and sets and reviews the qualifications of the Internal Audit organization as deemed appropriate. The AC may hold meetings with representatives of the internal and external auditors without the presence of management. Such meetings must take place at least once per year with the external auditor. In 2021, the AC held one meeting with the internal auditors and four meetings with the external auditors.

Furthermore, it is the AC’s responsibility to assess the performance of the internal and external auditors as well as their cooperation with one another.

In consultation with management and the external and internal auditors, the AC discusses the integrity of SoftwareONE’s financial reporting processes, management controls, compliance management and the functionality of internal controls, reviews significant financial risk exposures and the steps taken by management to monitor, control and report such exposures.

The Head of Internal Audit and the Group General Counsel have a direct reporting line to the AC in case of significant compliance issues with the potential for major financial or reputational damage, including issues concerning management. The AC has direct access to the Internal Audit department and may obtain all information required by it within the group as well as question the employees concerned. The AC will ensure that it receives regular information from both the internal and the external auditors. The AC has the overriding supervision of internal and external auditing.

Interactions with the Executive Board

The AC regularly invites the CEO, the CFO and other members of the EB or, subject to prior notification of the responsible member of the EB, members of the company’s management or other key employees to its meetings, as deemed desirable or appropriate. Furthermore, upon invitation by the AC Chairperson or, in their absence, the member of the AC calling a meeting, other executive officers/employees of the company or its subsidiaries shall also participate in meetings of the AC on a consultative basis. Third parties may also be invited to participate in meetings of the AC on a consultative basis. In 2021, SoftwareONE’s CFO participated in all four AC meetings.

Risk management

The BoD is responsible for overseeing SoftwareONE’s risk management and internal control systems for which the BoD has mandated the AC. The AC monitors the strategic risk management processes and reviews the risk management framework against the company’s risk management strategy, providing recommendations and appropriate mitigations. It further assesses the robustness of the company’s risk management policies and processes related to the risk management strategy. These systems provide appropriate security against significant inaccuracies and material losses.

Based on its risk management oversight activities, the AC makes proposals to the BoD regarding the company’s corporate governance, compliance and corporate responsibility framework and assesses the effectiveness of the internal control system related to key financial processes, forms a view on the situation concerning compliance with applicable standards and guidelines, and develops these further.

Embedded throughout the business, the group risk management function ensures an integrated approach to managing current and emerging threats. Risk management plays a key role in business strategy and planning discussions. At SoftwareONE, the group risk management function falls within the responsibility of the CFO.

Strategic risk management has identified key areas of strategic risks that are constantly monitored by group risk management and the AC. The following key strategic risk categories have been identified:

Strategic business risks, eg:

• Economic crisis;
• Significance losses of the value chain in software & cloud;
• Slow innovation;
• Unsuccessful new service models;
• Slow multivendor model adoption.

Operational risks, eg:

• IT security;
• IT applications;
• Employee “fatigue” due to COVID19;
• Operational excellence issues (scalable and efficient business model).

Financial risks, eg:

• Unhedged market risk;
• Accounts receivable risk;
• Currency fluctuation risk;
• Transfer pricing;
• Tax risks;
• Performance measurement and controlling.

Legal and compliance risks, eg:

• Non-conformity, illegal acts, internal or external fraud;
• Reputational risk;
• Professional liabilities with service business;
• Non-compliance with laws and regulations, including stock market regulations;
• Internal or external fraud.

Risk management is carried out by line management, controlled by the CFO under policies approved by the BoD and is reviewed and supervised by the AC. Strategic risks are identified, evaluated and managed in close co-operation with the group’s operating units. The BoD provides written principles for overall strategic risk management, as well as written policies covering specific areas within the risk categories.

IT security, including cyber and data security, is a key risk factor. The company’s risk management system covers the processes of the entire application management of all local and global IT systems, and ensures a regular monitoring as well as update of its IT systems and processes to ensure reliability, business continuity and performance.

SoftwareONE is certified to international standards on systems management, including ISO 9001:2008 on quality management systems, ISO 14001:2015 on environmental management systems and ISO 27001:2005 on information security management.

Quality audits are an integral part of SoftwareONE’s quality management system and cover the control of the established processes to fulfill all required regulatory industry standards.

The AC periodically monitors the risk assessment of SoftwareONE and assesses the proposed risk mitigation measures proposed by the EB on a semi-annual basis.

Audit of non-financial topics and corporate social responsibility

A key non-financial risk for SoftwareONE concerns reputation with respect to its IT security. Therefore, the assessment of the related processes and reviews are an important ongoing task for Internal Audit. To ensure that the appropriate specialists in Internal Audit are able to conduct their assessments according to the highest and most recent industry standards, SoftwareONE is dedicated to providing relevant training and resources needed by Internal Audit.

SoftwareONE’s BoD is committed to a sustainable future, and a material component of an ESG program is the setting of goals and measuring their progress. As part of the ESG journey, SoftwareONE is defining new targets, which it will validate against recognized reporting standards in order to increase transparency and provide consistent reporting.

External audit

a. Mandate external audit

The AC supports the BoD in the nomination of the external auditors to be proposed to the Annual General Meeting for election or re­election. It assesses annually the external auditor’s qualifications, effectiveness, past performance and independence, in particular related to any further consulting mandates. In connection with the appointment of the external auditor, the AC further approves the audit program, the annual fees and annually reviews the fee budget and actual audit fees incurred.

b. External auditor

Since its incorporation in 2013, SoftwareONE’s statutory external auditors have been Ernst & Young AG (CHE- 491.907.686) (‘EY’), Maagplatz 1, 8005 Zurich, Switzerland. The current auditor in charge is Mr Kaspar Streiff, who has been the lead auditor since 2016. In line with the Swiss Code of Obligations and to foster external auditor independence, the lead auditor is replaced every seven years.

The external auditor is elected (or re-elected, as the case may be) at each Annual General Meeting of shareholders for a term of office until the completion of the following Annual General Meeting. Due to replacement requirements, and if re-elected, Mr Streiff would be replaced after the completion of the term of office of 2022.

c. Auditing fees and additional fees

d. Information instruments pertaining to the external audit

Responsibilities of the external auditor

The external auditor is independent and accountable to the AC, the BoD and ultimately to the shareholders.

Cooperation and flow of information between the auditor and the Audit Committee

The AC liaises closely with the external auditor. In general, the lead auditor participates in the AC meetings as an advisor. In 2021, the external auditors participated in all four meetings of the AC (all conducted via video conferencing). The external auditor provides the AC with regular updates on the audit work, open audit issues and the processing thereof, all audit-related issues as well as with reports on topics requested by the AC. The external auditor has a direct reporting line to the AC and may escalate potential audit issues directly to the Chairperson of the AC. At least once a year, the AC meets the external auditor without management being present.

The AC, together with the BoD, reviews and approves in advance the planned audit services as well as a cap on additional non-audit services provided by the external auditor. It discusses the results of annual audits with the external auditor, including reports on the financial statements, necessary changes to the audit plans and critical accounting issues. It also establishes guidelines for the internal and external audit with the goal of an optimal complementarity of all audit work as important pillars of the various lines of defense.

The external auditor shares with the AC its findings on the adequacy of the financial reporting process and the efficacy of the internal controls. It informs the AC about any differences of opinion between the external auditor and management encountered during the audits, or in connection with the preparation of the financial statements, findings regarding a potential malfunctioning of internal controls or differing views between the external and the internal auditor.

Evaluation of the external auditor

The AC is responsible for recommending an audit firm to the BoD for election at the Annual General Meeting of shareholders. In Switzerland, there is no general legal requirement providing for a periodic mandatory rotation of the external auditor company, but the lead audit person must change every seven years. In order to be able to recommend an audit firm for election by the shareholders and in line with good corporate governance, the AC thoroughly evaluates the credentials of the current external auditor annually and presents its findings to the BoD. EY has a proven record of professionalism and efficiency and fully meets the high standards of SoftwareONE.

Furthermore the AC annually evaluates the performance of the external auditor.

Qualifications

At least once a year, the AC discusses with the external auditor any material issues, inquiries or investigations raised by governmental or professional authorities and steps taken to deal with any such issues.

Independence

At least once per year, the external auditor provides a formal written statement delineating all relationships with the company that might affect its independence. Any disclosed relationships or services that might interfere with the external auditor’s objectivity and independence are reviewed by the AC, which then recommends appropriate action to be taken by the BoD.

Performance

This assessment measures the external auditor’s performance against a number of criteria, including understanding of SoftwareONE’s business; technical knowledge and expertise; comprehensiveness of the audit plans; quality of the working relationship with management and clarity of communication. It is compiled from input of key people involved in the financial reporting process and the observations of the AC members.

Nomination and Compensation Committee

Key responsibilities and duties

As at 31 December 2021, the NCC was composed of four members. The members of the NCC are each elected annually and individually at the shareholders’ meeting. Their term of office ends at the closing of the next ordinary shareholders’ meeting and re-election is possible. The Chairperson of the NCC is appointed by the BoD. Against the backdrop of the particular shareholder structure and in deviation from the Swiss Code, the proposed Chairperson of the NCC shall in any case be an independent member of the BoD. At least one other member shall be an independent director ensuring an independent majority (with the casting vote of the Chairperson).

If there are vacancies in the NCC, the BoD may appoint substitute members from among its members for a term of office extending until the closing of the next ordinary shareholders’ meeting. The NCC meets whenever required by business, and at least three times per year.

The NCC has the powers and duties of the compensation committee as provided by Swiss law and in particular, the Ordinance against Excessive Compensation in Public Companies, as well as the powers and duties as provided in Art. 15 para. 5 of the AoI and the NCC Charter. The overall responsibility for the duties and powers assigned to the NCC shall remain with the BoD. The NCC shall regularly report to the BoD on its activities and submit the necessary proposals. Details of the compensation policies and principles can be found in the Compensation Report 2021.

Nomination and Compensation Committee activities in the reporting period

The NCC held six meetings in 2021, all six by video conference. The average duration of these calls was 2:30h. The committee focused on a number of key areas, including:

• Providing guidance on composition and succession planning of the BoD and the EB;
• A compensation framework including compensation levels and benchmark analysis for the EB and BoD;
• Preparing compensation decisions, including the setting of short-term incentive and long-term incentive targets, short-term incentive pay-outs, long-term incentive grants and salaries for EB members.

The NCC’s work on compensation-related matters is described in detail in the SoftwareONE Compensation Report.

Interactions of the committee

The NCC shall regularly invite the CEO and may invite other members of the EB or, subject to prior notification of the responsible member of the EB, members of the company’s management to its meetings, as it deems desirable and appropriate to responsibly fulfill its tasks.

The CEO or other members of the EB may not be present when the NCC reviews the compensation or other aspects of the employment of the relevant person. The Chairperson of the BoD or the NCC Chairperson is not present when the NCC reviews their compensation. In 2021, the CEO participated in all six meetings of the NCC. The NCC regularly consults the Chief Human Resources Officer to develop and recommend appropriate actions to the BoD.

In the process of evaluating SoftwareONE’s performance against the pre-determined compensation-relevant performance metrics, the NCC generally interacts annually with the Chairperson of the AC to obtain the information on the relevant metrics.

In developing the compensation system for the 2022 financial year, the NCC worked together with external service providers HCM Hostettler & Company (HCM) for the compensation system and Willis Towers Watson (WTW) for a benchmarking review. This was HCM’s only business relationship and mandate with SoftwareONE. WTW is a trading customer in the ordinary course of business of SoftwareONE.

Board of Directors renewal and succession

The BoD has to deliver its duties as a mutual decision-making body. Accordingly, the BoD must work as an efficient, effective and aligned team. Succession planning and an active renewal process for the BoD is very relevant to the company. The requirements that prospective BoD candidates must meet in terms of knowledge and experience in various key areas and the industry are constantly changing and subject to increasingly higher demands.

The NCC regularly analyzes the BoD’s composition to confirm that its members’ qualifications, skills and experience correspond to the BoD’s needs, subject to an adequate Board size and well-balanced composition. A majority of the BoD members should be independent according to the criteria laid out in the section entitled “Board of Directors’ independence assessment”. Directors also need to show significant commitment, integrity and competence in intercultural communication. With regard to its succession planning, the BoD aims to safeguard the stability of its composition while also renewing the BoD in a sensible way.

In line with the required skills and experience as detailed in the section “Board of Directors’ skill and experience assessment”, the NCC has developed a strategy to gradually, develop the BoD composition to become more independent and proportionately reflect shareholdings.

Board of Directors’ skill and experience assessment

To support the Board with its renewal and succession activities, the NCC established a skills and experience assessment that it conducts annually. The following competencies are considered the most relevant for SoftwareONE’s Board:

• Experience in the technology, IT, and procurement industries;
• Finance, audit, accounting;
• Capital markets transactions;
• CEO and other executive leadership (CFO, CRO or COO) experience in a publicly listed or non-public company;
• Leadership experience as Chairperson of a Board of Directors or Board of Directors’ committee in a publicly listed or non-public company;
• Human resources management, including compensation;
• Leading business operations in a global and rapidly growing business;
• Governance, legal and compliance;
• Risk management.

The NCC reviews these competencies to confirm that the BoD continues to possess the most relevant experience and expertise to perform its duties, ensuring that the leadership of SoftwareONE has the relevant proficiency required for active involvement and supervision of an international listed company and applies these as a guideline when nominating new members.

The NCC updated its strategic skills matrix that focuses on aspects such as Board size, diversity, independence, nationality, committee representation and future skills needed to better understand the priorities for future Board recruitments. In terms of nationality, the Board agreed to preserve a good balance of ‘Swissness’, while seeking to move away from being chiefly Western European.

The strategic skills matrix reflecting the BoD composition as of December 2021 is as follows:

Board of Directors’ performance assessment

The BoD, in collaboration with the NCC, will carry out a regular evaluation of the BoD’s and the BoD committees’ performance as well as the work of the Chairperson. To this extent, the BoD is committed to an open, transparent and critical boardroom culture, which forms the basis for this annual review of its own performance and effectiveness.

The assessment is intended to review the BoD’s as well as the committees’ composition, organization and processes, the BoD’s responsibilities governed by the OrgR and the committee charters. The committees shall further assess their accomplishments and evaluate their achievements subject to predetermined goals. The outcome of the evaluation will feed into the BoD’s succession planning as described in the section “Board of Directors’ skill and experience assessment”.

Under the lead of the LID, a self-assessment of the BoD was performed towards the end of the reporting period. The LID’s report was circulated in the BoD and a review was completed in early 2022.

Board of Directors’ training and education

Education is an important priority for SoftwareONE’s BoD. Newly elected BoD members attend an onboarding program tailored to their functions to gain a sound understanding of SoftwareONE’s organization, business, culture and its environment. In addition to this induction program for new members, refresher programs are given to all Board members, updating and enhancing their knowledge of emerging business trends and risks, which is further intended to contribute to building a strong and effective culture in the BoD, as this is an important pillar of BoD effectiveness.

Interaction of the Board of Directors with the Executive Board

In accordance with Art. 16 of the AoI and Art. 11.2 of the OrgR, the BoD has delegated the operational management of SoftwareONE and the group based on the OrgR entirely to the EB, within the limits permitted by and subject to the powers and duties remaining with the BoD pursuant to the OrgR.

The EB supports the BoD in fulfilling its duties and prepares proposals for consideration and decision-making by the BoD. These proposals are related to the following key group responsibilities: long-term strategy, business plan resilience, organizational structure, accounting principles, finance, capital markets, risk management including insurance, HR matters, corporate social responsibility, share capital and financing in general as well as for important strategic transactions. BoD resolutions shall result in appropriate feedback and unambiguous instructions to the CEO and other members of management.

The BoD supervises and monitors the performance of the EB through reporting and controlling processes. The CEO and other EB members regularly provide reports and updates to the BoD. These include information on key performance indicators and other relevant financial data, current and forward-looking risks and on developments in important markets, the industry and material events. The Chairperson of the BoD regularly meets with the CEO and other EB members outside of regular BoD meetings and individual BoD members will meet individual EB members with whom they are paired under a structured mentoring program. SoftwareONE has an information and financial reporting system. The annual targets are reviewed by the EB in detail and are approved by the BoD. SoftwareONE has adopted and implemented a formal approach to risk management and control, described in more detail in the section Audit Committee.

The BoD remains entitled to resolve any matters which are not delegated to or reserved for the Annual General Meeting of shareholders or another executive body of the company by law, the AoI or the OrgR. Furthermore, the BoD may, at any time on a case-by-case basis or according to a general reservation of powers provided in the OrgR, intervene in the tasks and powers of a subordinate EB and resolve the relevant matter itself.