Corporate Center

Aims and objectives

Our commitment to an integrated business model means that our complementary businesses must be managed together to optimize returns and control risk. Corporate Center supports UBS’s businesses, enabling them to operate effectively within this framework.

It fosters the long-term financial stability of UBS by maintaining an appropriate balance between risk and reward, and establishes and controls UBS’s corporate governance processes – including compliance with relevant regulations. The functional heads within the Corporate Center exercise authority across UBS’s businesses for their area, including the authority to issue group-wide policies in their respective areas of responsibility and with each of their Business Group counterparts having a functional reporting line to them. They are responsible for UBS’s financial, tax, and capital management and its risk control, legal and compliance activities. The Corporate Center is responsible for communicating with all UBS stakeholders, for branding, and for positioning the firm as the employer of choice. The Corporate Center has operational responsibility for certain shared services, such as information technology infrastructure (ITI) and for Group Offshoring (including the new UBS Service Center being established in India).

Organizational structure

Until the sale of UBS’s private label banks and specialist asset manager GAM, Corporate Center was reported as two separate business units: Corporate Functions and Private Banks & GAM. Starting in fourth quarter 2005, Corporate Center was again reported as one single unit.

In addition to the functional roles set out below, the CFO is head of the Corporate Center.

Corporate Functions

Chief Financial Officer (CFO)

The CFO is responsible for transparency in the financial performance of the Group and its individual businesses, for its financial reporting, forecasting, planning, and controlling processes as well as providing advice on financial aspects of strategic plans and mergers and acquisitions transactions. He is also responsible for UBS’s tax and capital management. Together with the CEO, the CFO provides external certifications under the Sarbanes-Oxley Act 2002, defines the standards for accounting, reporting and disclosure, and manages relations with investors. He coordinates working relationships with internal and external auditors.

The CFO is the GEB member responsible for ITI and Group Offshoring, and for the own-use corporate real estate portfolio across the firm.

Chief Risk Officer (CRO)

The CRO is responsible for developing UBS’s risk management and control principles and for formulating and implementing its risk policies and control processes for market risk, credit risk and operational risk, ensuring that UBS’s approach is consistent with best market practice and that the firm is operating within its agreed risk bearing capacity. He develops risk quantification methods and sets and monitors associated limits and controls. He ensures complete and consistent recording and aggregation of risk exposures and continuous monitoring and pro-active control of risks. The CRO exercises direct approval authority for market risk limits and exposures. In March 2005, a new Group Executive Board (GEB) position was established for the Chief Risk Officer.

Chief Credit Officer (CCO)

The CCO is responsible for formulating and implementing UBS’s risk policies and control processes for credit risk. He ensures that counterparty and country risks conform to approved risk profiles, and controls exposures to individual counterparties and counterparty groups. He provides the tools required for consistent quantification of credit and country risk across UBS and sets, monitors and controls concentration risk limits, ensuring adequate risk diversification. He ensures complete and consistent recording and aggregation of credit and country exposures and continuous monitoring and pro-active control of risks. The CCO exercises direct approval authority for counterparty credit and country limits and exposures.

Group Controller

The Group Controller has UBS-wide responsibility for financial control. He is responsible for production and analysis of accurate and objective regulatory, financial and management accounts and reports. The Group Controller provides consistent and appropriate communication to the Board of Directors, Group Executive Board (GEB), Group Managing Board (GMB), the Audit Committee, internal and external auditors, and the CFOs of the Business Groups. He establishes and enforces Group-wide financial and management accounting policies, and manages relations with external auditors and accounting standard bodies. He leads the forecasting process and supports the CFO in the Group’s planning process. The Group Controller coordinates and controls tax issues.

Group Treasurer

The Group Treasurer is responsible for the management of UBS’s financial resources and financial infrastructure. He is responsible for Group-level governance of treasury processes and transactions which relate to UBS’s corporate legal structure, regulatory capital, balance sheet, funding and liquidity, and non-trading currency and interest rate risk. His responsibility includes the issuance of policies in order to ensure proper management and efficient co-ordination of treasury processes on a Group-wide basis. The Group Treasurer manages the Group’s equity, taking into account financial ratios and regulatory capital requirements, with a view to maintaining strategic flexibility, sound capitalization and strong ratings. He manages UBS’s holdings of its own shares and recommends corporate actions to the Group Executive Board and the Board of Directors.

Chief Communication Officer

The Chief Communication Officer is responsible for managing UBS’s communication to its various stakeholders, ensuring that a truthful, balanced, positive and powerful image of UBS is established and broadcast to all stakeholders globally. He develops strategy, content and positioning of communications of corporate importance, emphasizing transparency, consistency, speed and integrity. He presents UBS and its businesses to the media, enhancing and protecting the firm’s reputation. To employees, he promotes understanding of the firm’s strategies, performance and culture. He presents UBS to investors, analysts and rating agencies and is responsible for preparing and publishing quarterly and annual reporting products. He manages and promotes the UBS corporate brand via advertising, sponsorship, art, and visual design, represents UBS’s interests to policy-makers, and coordinates UBS’s approach to corporate responsibility.

Group General Counsel

The Group General Counsel has group-wide responsibility for legal affairs and compliance as well as for regulatory management and insurance management. He defines the strategy, the goals and the organizational structure of the legal function, and sets and monitors quality standards for handling legal affairs and compliance across UBS. He supervises the Group Head of Compliance and the General Counsels of the Business Groups, ensuring that UBS meets relevant regulatory and professional standards. He issues group-wide policies and guidelines relating to legal, compliance, and, together with the Group CRO, on regulatory matters. He develops and formulates the Group’s policies and control processes for legal and compliance risks.

Group Head Human Resources

The Group Head Human Resources has UBS-wide responsibility for the human resources function. He is responsible for shaping a meritocratic culture of ambition, performance and learning, promoting UBS’s values for action. He builds UBS’s capacity to attract, develop and retain the best talent and creates an environment and processes which ensure that all employees from different cultures and backgrounds and with different perspectives can develop and succeed. He supports succession planning for senior executives and designs and administers global compensation and benefits programs.

Leadership Institute

The UBS Leadership Institute facilitates the development of the Bank’s current and future leadership team in direct alignment with UBS’s Vision and Values. It offers a series of strategically aligned top level programs and customized forums that are designed to shape UBS’s strategic agenda, address critical challenges and opportunities, leverage leadership capability across business groups and enable cross-organizational learning.

Chief Technology Officer (CTO)

The CTO is the head of the information technology infrastructure (ITI) unit. ITI encompasses all IT infrastructure teams across UBS, covering management of data networks, telephone and other communications systems, IT security, distributed computing and servers, mainframes and data centers, market data services, user services and desktop computing. The unit focuses on serving all UBS’s businesses in a client-driven and cost-efficient way, as well as building towards a consistent technical architecture across UBS through the execution of our technology infrastructure strategy.

Group Offshoring

The head of Group Offshoring leads the Group Offshoring team, established in late 2004. He is responsible for ensuring all offshoring activities of UBS on a firm-wide basis are well co-ordinated, optimally planned and executed in line with UBS’s strategy and values. The Group Offshoring team is currently overseeing the building of the UBS Service Center in Hyderabad, India, that will initially be able to accommodate 500 offshored roles when it becomes operational at the end of first quarter 2006.

Private Banks & GAM

In December 2005, UBS successfully completed the sale of its Private Banks & GAM unit to Julius Baer. As a result of the transaction, UBS holds a 20.7% stake in the enlarged Julius Baer. The stake is held as a financial investment. UBS will not take a seat on Julius Baer’s board of directors nor will it exercise any influence on its strategy or operational decisions, or vote the shares it holds.

Private Banks & GAM comprised the fully owned private banking subsidiaries Ehinger & Armand von Ernst, Banco di Lugano, and Ferrier Lullin and GAM, its specialist asset manager.

The Chairman’s Office

Although not formally a part of Corporate Center, the costs for the Chairman’s Office (which comprises the Company Secretary, Board of Directors, and Group Internal Audit) are reported in Corporate Center results.