UBS - Board of Directors

The Board of Directors (BoD) is ultimately responsible for the firm's strategy and the supervision of its executive management. It also approves the financial statements for issue. Shareholders elect each member of the BoD, which in turn appoints its Chairman, at least one vice chairman and the members of its various committees.

Members of the Board of Directors

This section provides information on the composition of the BoD on 31 December 2008. It shows each member's functions in UBS, nationality, year of initial appointment to the BoD and current term of office, professional history and education, date of birth and other activities and functions, such as mandates on boards of important corporations, organizations and foundations, permanent functions for important interest groups and official functions and political mandates.

At the annual general meeting (AGM) held on 23 April 2008, Peter R. Voser and Lawrence A. Weinbach were re-elected as their term of office expired. Marcel Ospel did not stand for re-election. Peter Kurer and David Sidwell were elected to their first term on the BoD, and Peter Kurer replaced Marcel Ospel as full-time Chairman of the BoD. Stephan Haeringer, Rolf Meyer, Peter Spuhler and Lawrence A. Weinbach tendered their resignations effective 2 October 2008. At the extraordinary general meeting (EGM) held on 2 October 2008, Sally Bott, Rainer-Marc Frey, Bruno Gehrig and William G. Parrett were elected to the BoD for the first time.

On 31 December 2008, with the exception of its executive Chairman, Peter Kurer, all members of the BoD were considered independent by the BoD.

As announced on 4 March 2009, Peter Kurer has decided not to stand for re-election at the AGM on 15 April 2009. The UBS BoD is nominating Kaspar Villiger as a candidate for the role of Chairman.

Peter Kurer

Address UBS AG Bahnhofstrasse 45 CH-8098 Zurich
Function(s) in UBS Chairman of the Board of Directors (BoD) / chair of the corporate responsibility committee / chair of the strategy committee
Nationality Swiss
Year of initial appointment 2008
Current term of office runs until 2009

Professional history, education and date of birth
Peter Kurer was elected to the BoD at the annual general meeting (AGM) held in 2008 and thereafter appointed Chairman of the BoD. He chairs the corporate responsibility committee and the strategy committee. Mr. Kurer had served as Group General Counsel of UBS since 2001, when he joined the firm. He also served as a member of UBS's Group Executive Board (GEB) from 2002 until his election to the BoD in April 2008. Between 1991 and 2001, Mr. Kurer was a partner at the law firm Homburger AG in Zurich. Between 1980 and 1990, he was with the Zurich office of Baker & McKenzie law firm, first as associate and later as partner. He was a law clerk at the District Court of Zurich from 1977 to 1979. Mr. Kurer graduated as doctor iuris from the University of Zurich and was admitted as attorney-at-law at the Zurich Bar. He holds an LL.M. from the University of Chicago. He was born on 28 June 1949.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Peter Kurer is a member of the board of Avenir Suisse as well as a member of the visiting committee of the University of Chicago's Law School. He is also a member of the board of trustees of a foundation which acts as an advisory board to the University of St. Gallen's program for law and economics, and a member of the committee of continuing education, Executive School of Management, Technology and Law, University of St. Gallen.

Sergio Marchionne

Address Fiat S.p.A. Via Nizza 250 I-10126 Turin
Function(s) in UBS Independent vice chairman and senior independent director / member of the governance and nominating committee / member of the strategy committee
Nationality Canadian and Italian
Year of initial appointment 2007
Current term of office runs until 2010

Professional history, education and date of birth
Sergio Marchionne serves as Chief Executive Officer (CEO) of Fiat S.p.A., Turin, and Fiat Group Automobiles. Mr. Marchionne began his professional career in 1983 as a chartered accountant and tax specialist for Deloitte & Touche in Canada. Two years later, he became Group controller and then director of corporate development at Lawson Mardon Group of Toronto. In 1989 and 1990, he served as executive vice president of Glenex Industries. In the following two years Mr. Marchionne acted as vice president of finance and Chief Financial Officer (CFO) at Acklands Ltd. He returned to Lawson Mardon Group in 1992 as vice president of legal and corporate development and CFO. The company was acquired by Alusuisse Lonza in 1994. After the acquisition, having become CEO in 1996, he held various positions of increasing responsibility until 2000. Upon completion of the merger of Alusuisse with Alcan, he acted as CEO and Chairman of the spin-off Lonza Group Ltd. until 2002. In 2002, Mr. Marchionne was appointed CEO of the Société Générale de Surveillance (SGS) Group of Geneva. He has been a member of the supervisory board of Fiat S.p.A. since 2003 and has served as CEO of the company since June 2004. Mr. Marchionne studied philosophy at the University of Toronto (Canada), business at the University of Windsor (Canada) and law at Osgoode Hall Law School in Toronto (Canada) and is a lawyer and chartered accountant. He was born on 17 June 1952.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Sergio Marchionne is Chairman of SGS and a member of the BoD of Philip Morris International Inc., New York. He is also a member of Acea (European Automobile Manufacturers Association) and Chairman of CNH Case New Holland Global N.V.

Ernesto Bertarelli

Address Bemido SA Avenue Giuseppe-Motta 31-33 PO Box 145 CH-1211 Geneva 20
Function(s) in UBS Member of the governance and nominating committee / member of the human resources and compensation committee
Nationality Swiss
Year of initial appointment 2002
Current term of office runs until 2009

Professional history, education and date of birth
Ernesto Bertarelli was CEO of Serono International SA, Geneva, between 1996 and 2007. The company was sold to Merck KGaA, Germany, on 5 January 2007. He started his career with Serono in 1985 and held several positions in sales and marketing. Prior to his appointment as CEO, he served for five years as deputy CEO. Mr. Bertarelli was also the vice chairman of the BoD of Serono SA, Coinsins (Switzerland) and the Chairman of SeroMer Biotech SA, Chéserex (Switzerland), until 5 January 2007. Mr. Bertarelli holds a Bachelor of Science from Babson College, Boston and an MBA from Harvard University. He was born on 22 September 1965.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Ernesto Bertarelli is Chairman of Team Alinghi SA (winner of the America's Cup 2003 and 2007), Ecublens (Switzerland), and of Alinghi Holdings Ltd. Jersey. He is the Chairman of Kedge Capital Partners Ltd., Jersey and of Kedge Capital Holdings (Jersey) Ltd., Switzerland. He was awarded two extraordinary national honors: the Légion d'honneur by President Chirac of France, and the Cavaliere di Gran Croce by Carlo Azeglio Ciampi, former President of the Italian Republic. He is a member of the strategic advisory board of Ecole Polytechnique Fédérale de Lausanne (EPFL) and holds various board mandates in professional organizations of the biotech and pharmaceutical industries.

Sally Bott

Address BP p.l.c. 1 St. James's Square GB-London SW1Y 4PD
Function(s) in UBS Member of the human resources and compensation committee / member of the corporate responsibility committee
Nationality American (US)
Year of initial appointment 2008
Current term of office runs until 2009

Professional history, education and date of birth
Sally Bott serves as Group HR Director of BP plc, which she joined in early 2005, and is a member of its Group Executive Committee. Ms. Bott spent most of her career in financial services. Between 2000 and 2005, she was a Managing Director at Marsh & McLennan, a US-based global risk and insurance services business, and head of global HR for Marsh, Inc. She was at Barclays Bank from 1994 to 2000, first as BZW HR director and then Group HR director from 1997 to 2000. In 1970, she joined Citibank out of college as a research analyst in the economics department. She was credit trained and in the Finance Function. She joined HR in 1978 and worked as a HR director in most of the wholesale bank and investment banking businesses during the next 15 years. She was the Global HR Director of the wholesale bank from 1990 to 1993. Ms. Bott has a BS in economics from Manhattanville College, USA. She was born on 11 November 1949.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Sally Bott is a member of the board of the Royal College of Music in London and the Carter Burden Center for the Aged in NYC.

Rainer-Marc Frey

Address Horizon21 Poststrasse 4 CH-8808 Pfaeffikon
Function(s) in UBS Member of the risk committee / member of the strategy committee
Nationality Swiss
Year of initial appointment 2008
Current term of office runs until 2009

Professional history, education and date of birth
Rainer-Marc Frey is the founder and Chairman of Horizon21, an investment management company which takes long-term investment views on various megatrends in the investment management industry. In 1992, he founded RMF Investment Group (RMF), one of the first hedge fund groups in Europe, and became CEO. RMF was acquired by Man Group Plc in 2002. Between 2002 and 2004, he held a number of senior roles within Man Group Plc and was the largest individual shareholder. From 1989 to 1992, prior to founding RMF, Mr. Frey served as a director at Salomon Brothers Inc. in Zurich, Frankfurt and London, where he was involved mainly with equity derivatives. Between 1987 and 1989, he worked for Merrill Lynch Inc. covering equity, fixed income and swaps markets. He holds a degree in economics from the University of St. Gallen. Mr. Frey was born on 10 January 1963.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Rainer-Marc Frey is a member of the BoD of DKSH Group, Zurich, and a member of the advisory board of Invision Private Equity AG, Zug. He is a member of the BoD of the Frey Charitable Foundation, Freienbach.

Bruno Gehrig

Address Swiss Life General-Guisan-Quai 40 Postfach CH-8022 Zurich
Function(s) in UBS Member of the audit committee
Nationality Swiss
Year of initial appointment 2008
Current term of office runs until 2009

Professional history, education and date of birth
Bruno Gehrig has been Chairman of Swiss Life Holding since 2003 and will resign on 7 May 2009 from this position. Between 1996 and 2003, he served at the Swiss National Bank, starting as a member of the governing board and becoming vice chairman in 2000. From 1992 to 1996, he was a professor of banking and finance at the University of St. Gallen and concurrently served as a member of the Swiss Federal Banking Commission (FINMA since 1 January 2009). Between 1989 and 1991, he held the position of CEO at Cantrade Private Banking Group. Mr. Gehrig worked for the former Union Bank of Switzerland (UBS) between 1981 and 1989, where he started as chief economist before assuming responsibility for securities sales and trading. He studied economics at the University of Berne, where he also did his PhD studies. He completed postgraduate studies at the University of Rochester, New York. He was assistant professor at the University of Berne and received his Dr. h.c. from the University of Rochester, New York. Mr. Gehrig was born on 26 December 1946.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Bruno Gehrig is the vice chairman of the BoD of Roche Holding AG, Basel, and the Chairman of the Swiss Air Transport Foundation, Zug.

Gabrielle Kaufmann-Kohler

Address Lévy Kaufmann-Kohler 3-5, rue du Conseil-Général CH-1205 Geneva
Function(s) in UBS Chair of the governance and nominating committee / member of the corporate responsibility committee
Nationality Swiss
Year of initial appointment 2006
Current term of office runs until 2009

Professional history, education and date of birth
Gabrielle Kaufmann-Kohler has been arbitrator and partner with Lévy Kaufmann-Kohler since 1 January 2008, and a professor of private international law, including international arbitration, at the University of Geneva Law School since 1997. Between 1996 and 2007, she worked as a practicing attorney at the Schellenberg Wittmer law firm, Geneva, where she was a partner. Ms. Kaufmann-Kohler was adjunct professor for private international law at the University of Geneva Law School from 1993 to 1996. From 1985 to 1995, she was with Baker & McKenzie law firm, first as associate and then as partner. She is a member of the Geneva Bar (since 1976) and of the New York State Bar (since 1981) and is known worldwide for her expertise in international arbitration. In 1980, she worked for the UBS New York Branch as a legal advisor. Ms. Kaufmann-Kohler completed her legal studies at the University of Geneva in 1977 and received her doctorate from the University of Basel in 1979. She was born on 3 November 1952.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Gabrielle Kaufmann-Kohler is a member of the board of the American Arbitration Association.

Helmut Panke

Address BMW AG Petuelring 130 D-80788 Munich
Function(s) in UBS Member of the human resources and compensation committee / member of the risk committee
Nationality German
Year of initial appointment 2004
Current term of office runs until 2010

Professional history, education and date of birth
Between 2002 and 2006, Helmut Panke was Chairman of the board of management of BMW AG, Munich. In 1982, he joined as head of planning and controlling in the research and development division. He subsequently assumed management functions in corporate planning, organization and corporate strategy. Before his appointment as Chairman, he was a member of BMW's board of management from 1996. Between 1993 and 1996, he was Chairman and CEO of BMW Holding Corporation in the US. Mr. Panke graduated from the University of Munich with a PhD in physics and was assigned to the University of Munich and the Swiss Institute for Nuclear Research before joining McKinsey & Co in Dusseldorf and Munich as a consultant. He was born on 31 August 1946.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Helmut Panke is a member of the BoD of Microsoft Corporation, Redmond, WA (USA) and is also a member of the supervisory board of Bayer AG (Germany). He is a member of the BoD of the American Chamber of Commerce in Germany and a member of the international advisory board for Dubai International Capital's "Global Strategic Equities Fund".

William G. Parrett

Address 433 Country Club Rd. W. New Canaan, Ct. 06840 USA
Function(s) in UBS Member of the audit committee
Nationality American (US)
Year of initial appointment 2008
Current term of office runs until 2009

Professional history, education and date of birth
William G. Parrett served his entire career with Deloitte Touche Tohmatsu, a global organization of member firms that operates with 160,000 people in nearly 140 countries. He was CEO from 2003 until his retirement in 2007. Between 1999 and 2003, he was a managing partner of Deloitte & Touche USA LLP and served on Deloitte's Global Executive Committee. Mr. Parrett founded the US National Financial Services Industry Group (1995) and the Global Financial Services Industry Group (1997) of Deloitte, both of which he led as Chairman. In his 40 years of experience in professional services, Mr. Parrett served public, private, governmental, and state-owned clients worldwide in order to help Deloitte achieve superior financial performance and growth. Mr. Parrett has a Bachelors degree in accounting from St. Francis College, New York, and is a certified public accountant. He was born on 4 June 1945.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: William Parrett is an independent director of Eastman Kodak Co., Blackstone Group LP, and Thermo Fisher Scientific Inc., USA. He is also the Chairman of the BoD of the United States Council for International Business and of United Way of America, a member of the board of trustees of Carnegie Hall, and a member of the Executive Committee of the International Chamber of Commerce.

David Sidwell

Address 433 Apartment 26-O 25 Central Park West New York N.Y. 10023 USA
Function(s) in UBS Chair of the risk committee / member of the corporate responsibility committee
Nationality American (US)
Year of initial appointment 2008
Current term of office runs until 2009

Professional history, education and date of birth
David Sidwell was executive vice president and CFO of Morgan Stanley in New York between March 2004 and October 2007. Before joining Morgan Stanley he was with JPMorgan Chase & Co. He joined JPMorgan Chase & Co. in 1984 in New York where he held a number of different positions during his 20 years of service, including controller and CFO of the Investment Bank. Prior to this he was with PricewaterhouseCoopers LLP in both London and New York. Mr. Sidwell graduated from Cambridge University in England and is a chartered accountant qualifying in the Institute of Chartered Accountants in England and Wales. He was born on 28 March 1953.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: David Sidwell is a director of the Federal National Mortgage Association Fannie Mae. He is a trustee of the International Accounting Standards Committee Foundation, London and the Chairman of the BoD of Village Care of New York, a not-for-profit organization, as well as director of the National Council on Aging.

Peter R. Voser

Address Royal Dutch Shell plc 2501 AN NL-The Hague
Function(s) in UBS Chair of the audit committee / member of the strategy committee
Nationality Swiss
Year of initial appointment 2005
Current term of office runs until 2009

Professional history, education and date of birth
Peter R. Voser has been CFO and an executive BoD member of Royal Dutch Shell plc in London since 2004. Between 2002 and 2004, he was CFO of Asea Brown Boveri (ABB) in Switzerland. Between 1982 and 2002, he worked for the Royal Dutch / Shell Group, holding various assignments in Switzerland, the UK, Argentina and Chile. Mr. Voser graduated from the University of Applied Sciences, Zurich. He was born on 29 August 1958.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Mr. Voser is a member of the BoD of the Swiss Federal Auditor Oversight Authority.

Joerg Wolle

Address DKSH Holding AG Wiesenstrasse 8 CH-8034 Zurich
Function(s) in UBS Chair of the human resources and compensation committee / member of the governance and nominating committee
Nationality German and Swiss
Year of initial appointment 2006
Current term of office runs until 2009

Professional history, education and date of birth
Joerg Wolle has been president and CEO of DKSH Holding Ltd. since 2002. From 2000 until the merger with Diethelm Keller in 2002, he was president and CEO of SiberHegner Holding AG. He completed his studies in engineering in 1983 and received his doctorate in 1987 from the Technical University of Chemnitz in Germany. Mr. Wolle was born on 19 April 1957.

Other activities and functions
Mandates on boards of important corporations, organizations and foundations or interest groups: Joerg Wolle is a member of the BoD of Diethelm Keller Holding Ltd., Zurich. He is also the Chairman of the BoD of BURU Holding Ltd., Cham, and a member of the BoD of OAV (German Asia-Pacific Business Association), Hamburg.

Elections and terms office

In accordance with the new article 19 (paragraph one) of the "Articles of Association of UBS AG" approved at the 23 April 2008 AGM, all BoD members are to be elected on an individual basis for a one-year term of office. As a result, by 2010 at the latest, shareholders must confirm the entire membership of the BoD on a yearly basis at the AGM.

BoD members are normally expected to serve for a minimum of three years. No BoD member can continue to serve beyond the AGM held in the calendar year following his or her sixty-fifth birthday. The BoD may, in exceptional circumstances, propose to the AGM that a BoD member be re-elected despite having reached this age limit. However, no BoD member may hold office beyond the age of 70.

The boxes on the previous pages list the following for all BoD members: year of first appointment to the BoD and the expiry of their current mandate.

Organizational principles

The BoD has ultimate responsibility for the mid- and long-term strategic direction of the UBS Group (Group), for appointments and dismissals at top management level and for the definition of the firm's risk principles and risk capacity.

Organizational structure

Following each AGM, the BoD meets to elect or appoint its Chairman, one or more vice chairmen, the senior independent director and the members and chairs of its committees. The BoD appoints a company secretary who acts as secretary to the BoD and its committees.

There were significant changes to the organizational structure of the BoD in 2008, including the dissolution of the Chairman's Office as of 1 July 2008, which was composed of the Chairman and the vice chairman / vice chairmen. The duties and responsibilities of the former Chairman's Office were allocated to a number of BoD committees, including the new risk committee and the new strategy committee. In addition, the duties and responsibilities of the governance and nominating committee (formerly the nominating committee) and the human resources and compensation committee (formerly the compensation committee) have been expanded. The duties and responsibilities of the committees of the BoD are described below. Moreover, the position of a senior independent director has been established and is currently held by Sergio Marchionne, in addition to his role as the firm's vice chairman.

According to the Articles of Association, the BoD meets as often as business requires, but at least six times a year. A total of 47 meetings were held in 2008, of which 17 included Group Executive Board (GEB) members, 26 were without GEB participation, and four were independent BoD meetings held without the presence of its Chairman. On average, 91% of BoD members were present at BoD meetings and 83% at the BoD meetings without GEB participation.

Each committee chair provides the BoD with regular updates on the current activities of his or her committee and on important committee issues.

At least once per year, the BoD reviews its own performance as well as the performance of each of its committees. This review is based on an assessment conducted by the governance and nominating committee and seeks to determine whether the BoD and its committees are functioning effectively and efficiently.

The BoD is organized as follows:

Chairman's Office

UBS had a Chairman's Office until 30 June 2008. Since then, the duties and responsibilities of the dissolved Chairman's Office have been allocated to a number of BoD committees.

Audit committee

The audit committee comprises at least three independent BoD members, with all members having been determined by the BoD as being fully independent and financially literate. Peter R. Voser, the committee's chair, as well as the other two members, have accounting and financial management expertise and are "financial experts" according to the rules established by the US Sarbanes-Oxley Act of 2002.

The committee operates under the audit committee charter, as described in the "Organization Regulations of UBS AG" (organization regulations) and its annexes. The committee does not itself perform audits, but supervises the work of the auditors. Its primary responsibility is to assist the BoD in: (i) monitoring the integrity of the financial statements of UBS and compliance with legal and regulatory requirements; and (ii) reviewing the organization and efficiency of internal controls and financial reporting processes. On behalf of the BoD, the committee monitors the qualification, independence and performance of UBS's external auditors and their lead partners. It prepares proposals for the BoD regarding the appointment or removal of UBS's external auditors. The BoD then submits these proposals to the AGM.

The committee also reviews the financial statements of UBS and UBS Group, and makes proposals as to whether the annual financial statements of UBS and UBS Group should be submitted to the AGM for approval.

On 31 December 2008, Peter R. Voser chaired the committee with Bruno Gehrig and William G. Parrett as its additional members. The committee met six times in 2008, with the head of Group Internal Audit, the representatives of the external auditors, the Group Chief Financial Officer (CFO), the head of Group Controlling and Accounting and the head of Group Accounting Policy participating. The six meetings included regular separate sessions with these representatives. In addition, the Group General Counsel attended one meeting. A special session was organized with the Group CFO to discuss the annual financial results. Participation at the meetings averaged 94% and all were held with external auditors present.

The committee reports back to the BoD about its discussions with UBS's external auditors. Once per year, the lead partners take part in a BoD meeting, presenting the long-form report of UBS's external auditors, as required by the Swiss Financial Market Supervisory Authority (until 31 December 2008, Swiss Federal Banking Commission).

Corporate responsibility committee

The corporate responsibility committee supports the BoD in fulfilling its duty to safeguard and advance the Group's reputation for responsible corporate conduct and to assess developments in stakeholder expectations and their possible consequences for UBS. The committee comprises at least three BoD members and, on 31 December 2008, Peter Kurer chaired the committee with Sally Bott, Gabrielle Kaufmann-Kohler and David Sidwell as its additional members. The committee is advised and supported by a number of senior business representatives. The committee met twice in 2008, with an average participation of 63%.

Refer to the "Corporate responsibility" section of this report for more information on corporate responsibility

Governance and nominating committee

The governance and nominating committee supports the BoD in fulfilling its duty to establish best practices in corporate governance across the Group, to conduct a self-assessment of the full BoD, in consultation with the Chairman of the BoD, to establish and maintain a process for appointing new BoD members and to manage the succession of the Group Chief Executive Officer (Group CEO). The committee comprises at least three independent BoD members and, on 31 December 2008, Gabrielle Kaufmann-Kohler chaired the committee with Ernesto Bertarelli, Sergio Marchionne and Joerg Wolle as its additional members. In 2008, 14 meetings were held with an average participation of 95%. Of these 14 meetings, eight were held with external advisors.

Human resources and compensation committee

The human resources and compensation committee has the following functions: (i) to support the BoD in fulfilling its duty to set guidelines on compensation and benefits; (ii) to approve the total individual compensation for the Chairman of the BoD, the non-independent BoD members and the GEB members; (iii) together with the Chairman of the BoD, to provide the BoD with a proposal for total individual compensation for the independent BoD members; and (iv) to scrutinize the performance of the executives and supervise and approve the succession planning for all executives (other than the Group CEO). The human resources and compensation committee also reviews the compensation disclosure included in this report. The committee operates under the human resources and compensation committee charter, as described in the organization regulations and its annexes.

The Group CEO must provide this committee with an annual report on the effectiveness of UBS's human resources polices and suggest modifications and supply regular updates regarding the results of employee and executive surveys and leadership processes.

The committee comprises at least three independent BoD members and, on 31 December 2008, Joerg Wolle chaired the committee with Sally Bott, Helmut Panke and Ernesto Bertarelli as its additional members. Eight meetings were held in 2008, with an average participation of 93%. Of those meetings, four were held with external advisors.

Refer to the "Compensation, shareholdings and loans" section of this report for more information on the BoD human resources and compensation committee's decision-making procedures

Risk committee

The risk committee became effective on 1 July 2008 and took over many responsibilities of the former Chairman's Office. The function of the committee is to support the BoD in fulfilling its duty to supervise and to set appropriate risk management and control principles in the areas of: (i) risk management and control, including credit, market and operational risk; (ii) treasury and capital management, including funding and liquidity; and (iii) balance sheet management, including in each case any consequent reputational risk. For these purposes, the committee will receive all relevant information from the GEB. The Group CEO, the Group CFO, the Group CRO and the Executive Committee are responsible for assessing and managing the risks of the Group and are ultimately accountable to the BoD with regard to their activities.

The committee comprises at least three independent BoD members and, on 31 December 2008, David Sidwell chaired the committee with Rainer-Marc Frey and Helmut Panke as its additional members. The committee has met eight times since its formation on 1 July 2008, with an average participation of 87%. Three of these meetings were held with external advisors. A special session was held with the Governing Board of the Swiss National Bank, and will continue to be held on an annual basis.

Strategy committee

The strategy committee became effective on 1 July 2008. The functions of the strategy committee are: (i) to work with the Group CEO to initiate, at least once per year, a review of the firm's strategy and its implementation by the GEB, with a view to submitting presentations to the BoD to facilitate its decisions on the Group's strategy; (ii) to monitor the implementation of the Group's current strategy and report results to the BoD; (iii) to consider, in conjunction with the risk committee, the Group's strategy to deal with anticipated or existing high-level risks; and (iv) to validate the Group's current strategy with external experts where the committee considers such external advice to be appropriate.

The committee comprises at least three independent BoD members and, on 31 December 2008, Peter Kurer chaired the committee with Rainer-Marc Frey, Sergio Marchionne and Peter R. Voser as its additional members. All members were present at the six committee meetings held in 2008, with one meeting held as a strategy seminar and external advisors present at two.

Roles and responsibilities of the Chairman of the Board of Directors

Peter Kurer, the Chairman, has entered into a full-time employment contract with UBS in connection with his service on the BoD and is entitled to receive pension benefits upon retirement. He assumes clearly defined management responsibilities.

The Chairman takes a leading role in mid- and long-term strategic planning, the selection and supervision of the Group CEO and the GEB members, mid-term succession planning and developing and shaping compensation principles. In addition, the Chairman actively supports major client and transaction initiatives.

As leader of the BoD, the Chairman is responsible for ensuring that the BoD is effective and correctly balances its focus between its strategic and supervisory functions. In addition, the Chairman presides over the AGMs and EGMs and works with the committee chairs to coordinate the work of all committees. Together with the Group CEO, the Chairman is responsible for ensuring effective communication with shareholders and other stakeholders, including government officials and regulators. This is in addition to establishing and maintaining a close working relationship with the Group CEO and the other GEB members, providing advice and support while respecting the fact that day-to-day management responsibility is delegated to the GEB.

Roles and responsibilities of the senior independent director

At least once per year, the senior independent director organizes and leads a meeting of the independent BoD members without the presence of the Chairman. The senior independent director reports to the Chairman of the BoD on the evaluation of the Chairman's performance. The senior independent director acts as a contact point for shareholders wishing to engage in discussions with an independent BoD member.

Important business connections of independent members of the Board of Directors with UBS

UBS, as a global financial services provider and a major bank in Switzerland, has business relationships with many large companies including those in which UBS BoD members assume management or independent board responsibilities. The nature of the relationships between UBS and companies whose chair or chief executive is a member of UBS's BoD is not considered to compromise the BoD members' capacity for independent judgment. Furthermore, no independent BoD member has personal business relationships with UBS that could compromise his or her independence.

All relationships and transactions with UBS BoD members and their affiliated companies are conducted in the ordinary course of business and are on the same terms as those prevailing at the time for comparable transactions with non-affiliated persons.

Checks and balances: Board of Directors and Group Executive Board

Effective 1 July 2008, the separation of responsibilities between the BoD and executive management has been clarified. The BoD has a clear strategy-setting responsibility and will supervise and monitor the business, whereas the GEB, headed by the Group CEO, has executive management responsibility. UBS operates under a strict dual board structure, as mandated by Swiss banking law. The functions of Chairman of the BoD and Group CEO are assigned to two different people, thus ensuring a separation of powers. This structure establishes checks and balances and preserves the institutional independence of the BoD from the day-to-day management of the firm, for which responsibility is delegated to the GEB under the leadership of the Group CEO. No member of one board may be a member of the other.

Supervision and control of executive management remains with the BoD. The authorities and responsibilities of the two bodies are governed by the "Articles of Association of UBS AG" and "Organization Regulations of UBS AG", including the latter document's "Annex B - Responsibilities and authorities".

Refer to www.ubs.com/governance for more details on checks and balances for the BoD and GEB

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

The BoD is kept informed of the activities of the GEB in various ways. The minutes of the GEB meetings are made available to the BoD members. At BoD meetings, the Group CEO and the GEB members regularly update the BoD on important issues.

At BoD meetings, BoD members may request from BoD or GEB members any information about any matters concerning UBS that they require to fulfill their duties. Outside meetings, BoD members may request information from other BoD members and GEB members, in which case such requests must be approved by the Chairman of the BoD.

Group Internal Audit monitors the compliance of business activities with legal and regulatory requirements and all internal regulations, policies and guidelines. This internal audit organization, which is independent from management, reports significant findings to the Chairman of the BoD, the risk committee and the audit committee.

For the first time in February 2008, UBS's internal compliance function provided an annual compliance report to the BoD. This report is required by sections 109 and 112 of circular 08 / 24 of the Swiss Financial Market Supervisory Authority on the supervision and internal controls at banks.

Refer to the "Risk management and control" section of this report for more information