Criteria for defining external Board members' independence

Our Organization Regulations require three-quarters of the BoD members to be independent.

As a general rule for a Board of Director (BoD) member to be considered independent, he or she may not have any material relationship1 with UBS2, either directly or as a partner, controlling shareholder or executive officer3 of a company that has a material relationship with UBS.

In addition, in order to be considered independent, our BoD members have to fulfill the additional criteria our BoD has established based on the requirements set forth in the New York Stock Exchange listing standards on corporate governance, the FINMA Circular 08 / 24 on the supervision and internal controls at banks and the standards established in the Swiss Code of Best Practice for Corporate Governance. These criteria are as follows:

A director will not be considered independent, if he or she

  • is or has been an employee of UBS within the last three years.
  • has an immediate family member4 who is or has been an executive officer of UBS within the last three years.
  • has received or has an immediate family member who has received during any twelve-month period within the last three years more than USD 120,000 in direct compensation from UBS (other than director and committee fees).
  • is a current partner or a current employee of UBS’s internal or external auditors.
  • has an immediate family member who is a current partner or a current employee (personally working on UBS's audit), of UBS's internal or external auditors.
  • was or an immediate family member was within the last three years a partner or employee of UBS's internal or external auditors and personally worked on UBS’s audit within that time.
  • or an immediate family member is or has been within the last three years employed as an executive officer of a company where any of UBS’s present executive officers at the same time serves or served on that company’s compensation committee.
  • is a current employee of a company that has made payments to or received payments from UBS in any of the last three fiscal years in excess of the greater of USD 1 million or 2% of the consolidated gross revenues of the director’s company.
  • has an immediate family member who is a current executive officer of a company that has made payments to or received payments from UBS in any of the last three fiscal years in excess of the greater of USD 1 million or 2% of the consolidated revenues of the director’s company.
  • or his/her immediate family members and/or companies controlled5 by him or her have banking relationships with UBS that are not in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with other clients.
  • does not hold a qualified holding6 in UBS Group AG or UBS AG, and does not represent the owner of such a qualified holding.
  • has entered into consulting contracts with UBS.
  • holds any other Board mandates that might infringe on his independence.

All Audit Committee and Risk Committee members are required to be independent. A director will not qualify as “independent” under the tightened independence requirements for members of the Audit Committee if he or she:

  • accepts directly or indirectly any consulting, advisory or other compensatory fees from UBS, other than compensation for Board and Board Committee services.
  • holds directly or indirectly UBS shares in excess of 5% of the outstanding capital.

In addition, each Audit Committee member must not serve on the audit committees of more than two other public companies. The Board may approve exceptions from this rule if the simultaneous service does not impair the ability of the director to fulfill his mandate. Such exceptions would be disclosed and explained in our annual reports.