Organization and Structure

Shareholders

The general meeting of shareholders is the supreme corporate body of UBS. All shareholders registered with voting rights are invited to general meetings of shareholders.

Chairman and Board of Directors

Under the leadership of the Chairman, the Board of Directors (BoD) decides on the strategy of the Group, upon recommen­dation by the Group CEO, exercises ultimate supervision over management and appoints all Group Executive Board (GEB) members. The Chairman of the Board presides over all general meetings of shareholders and works with the committee chairpersons to coordinate the work of all BoD committees. The committees shown in the graphic assist the BoD in the performance of its responsibilities. These committees and their charters are described in the Organization Regulations, published at ubs.com/governance.

Checks and balances – Board of Directors and Group ­Executive Board

The BoD decides on the strategy of the Group upon recommendations by the Group CEO and exercises ultimate supervision over management, whereas the GEB, headed by the Group CEO, has executive management responsibility. The functions of Chairman of the BoD and Group CEO are assigned to two different people, ensuring a separation of power. The BoD dele­gates the management of the business to the GEB.

Group CEO and Group Executive Board

Under the leadership of the Group CEO, the GEB has executive management responsibility for the steering of the Group and its business. It assumes overall responsibility for developing the Group and business division strategies and the implementation of approved strategies.

The operational structure of the Group comprises the Corporate Center and four business divisions:

  • Global Wealth Management
  • Personal & Corporate Banking
  • Asset Management
  • Investment Bank

UBS's financial statements provide segment reporting by its business divisions and Corporate Center. In addition, the discussion of UBS's results provides further details of our results at a business unit level. This reporting structure is shown in the following table:

Reporting structure

Global Wealth Management

Personal & Corporate Banking

Asset Management

Investment Bank

Corporate Center

The table below provides information on the share capital, conditional capital and authorized capital of UBS Group AG as currently recorded in the Commercial Register, and as most recently reported to the SIX Swiss Exchange.

Articles of Association as of 05.03.2019

Articles of Association as of 05.03.2019

Number of shares

Number of shares

Share capital in CHF

Share capital in CHF

Articles of Association as of 05.03.2019

Share Capital

Number of shares

3,855,634,749

Share capital in CHF

385,563,475

Articles of Association as of 05.03.2019

Reported Capital as of 31.10.2018

Number of shares

-

Share capital in CHF

-

Articles of Association as of 05.03.2019

Listed Share Capital

Number of shares

3,858,998,469

Share capital in CHF

385,899,847

Articles of Association as of 05.03.2019

Conditional Capital

Number of shares

-

Share capital in CHF

-

Articles of Association as of 05.03.2019

Employee options

Number of shares

121,762,756

Share capital in CHF

12,176,276

Articles of Association as of 05.03.2019

Conversion rights and warrants

Number of shares

380,000,000

Share capital in CHF

38,000,000

Articles of Association as of 05.03.2019

Authorized Capital

Number of shares

-

Share capital in CHF

-

For additional information, please consult the Capital management section of our annual and quarterly reports, as well as the Corporate Governance section of our annual reports.

Annual reports are available at:

Quarterly reports are available at:

Auditors

Audit is an integral part of corporate governance. While safeguarding their independence, the external auditors closely coordinate their work with Group Internal Audit. The Audit Committee, and ultimately the Board of Directors, supervises the effectiveness of audit work.

External independent auditors

At the Annual General Meeting in 2018, Ernst & Young Ltd (EY) was re-elected as auditors for the Group for a one-year term of office. EY assumes virtually all auditing functions according to laws, regulatory requests and the Articles of Association.

More information on the external auditors is disclosed in the annual report 2018.

Group Internal Audit

Group Internal Audit (GIA) performs the internal auditing function for the Group, and in 2018 operated with an approved average headcount of 450 full-time equivalent employees. It is an independent and objective function that supports the Group in achieving its strategic, operational, financial and compliance objectives, and the BoD in discharging its governance responsibilities.

GIA independently, objectively and systematically assesses:

  • the effectiveness of processes to define strategy and risk appetite as well as the overall adherence to the approved strategy;
  • the effectiveness of governance processes;
  • the effectiveness of risk management, including whether risks are appropriately identified and managed;
  • the effectiveness of internal controls, specifically whether they are commensurate with the risks taken;
  • the soundness of the risk and control culture;
  • the effectiveness and sustainability of remediation activities, originating from any source;
  • the reliability and integrity of financial and operational information (i.e., whether activities are properly, accurately and completely recorded, and the quality of underlying data and models); and
  • the effectiveness of processes to comply with legal, regulatory and statutory requirements (such as the provisions of the Articles of Association), as well as with internal policies (including the Organization Regulations) and contracts, i.e., assessing whether such requirements are met, and the adequacy of processes to sustainably meet them.

Audit reports that include significant issues are provided to the Group CEO, relevant GEB members and other responsible management. The Chairman, Audit Committee and Risk Committee of the BoD are also regularly informed of such issues. In addition, GIA assures remediation of issues identified by regulators and internal audit and all significant issues, regardless of whether they are identified by management, control functions, internal / external audit or regulators. GIA also cooperates closely with risk control functions and internal and external legal advisors on investigations into major control issues.

To maximize GIA’s independence from management, the Head GIA reports to the Chairman of the BoD and to the Audit Committee, which assesses annually whether GIA has sufficient resources to perform its function, as well as its independence and performance. In the Audit Committee’s assessment, GIA is sufficiently resourced to fulfill its mandate and complete its auditing objectives. GIA’s role, position, responsibilities and accountability are set out in our Organization Regulations and the Charter for Group Internal Audit, published at www.ubs.com/governance. The latter also applies to UBS AG’s internal audit function. GIA has unrestricted access to all accounts, books, records, systems, premises and personnel, and must be provided with all information and data that it needs to fulfill its auditing duties. The Audit Committee may order special audits to be conducted, and other BoD members, committees or the Group CEO may request such audits in consultation with the Audit Committee. GIA enhances the efficiency of its work through coordination and close cooperation with the external auditors.

Compliance with NYSE listing standards on corporate governance

As a foreign company with shares listed on the New York Stock Exchange (NYSE), we comply with all relevant corporate governance standards applicable to foreign private issuers.

Differences from corporate governance standards relevant to US-listed companies

According to the NYSE listing standards on corporate governance, foreign private issuers are required to disclose any significant ways in which their corporate governance practices differ from those that have to be followed by domestic companies. These differences are discussed in the following paragraphs.

Responsibility of the Audit Committee with regard to independent auditors

Our Audit Committee is responsible for the compensation, retention and oversight of the independent auditors. It assesses the performance and qualification of the external auditors and submits its proposal for appointment, reappointment or removal of the independent auditors to the full BoD. As required by the Swiss Code of Obligations, the BoD then submits its proposal to the shareholders for their vote at the Annual General Meeting (AGM). Under NYSE standards, the Audit Committee is also responsible for the appointment of the independent auditors.

Shareholders' votes on Equity Compensation Plans

While the NYSE standards would require shareholder approval for the establishment of and material revisions to all equity compensation plans, Swiss law authorizes the BoD to approve compensation plans. Swiss companies determine the nature and components of capital in their articles of association, and each increase in capital requires shareholder approval. This means that shareholder approval is mandatory if equity-based compensation plans require an increase in capital. No shareholder approval is required if shares for such plans are purchased in the market.

Responsibility of the Compensation Committee for performance evaluations of senior management of UBS Group AG

Under NYSE standards, it is the responsibility of the Compensation Committee to evaluate senior management performance and determine and approve, as a committee or together with the other independent directors, its compensation. In line with Swiss law, our Compensation Committee, together with the BoD, proposes for shareholder approval at the AGM the maximum aggregate amount of compensation for the BoD, the maximum aggregate amount of fixed compensation for the Group Executive Board (GEB) and the aggregate amount of variable compensation for the GEB. The shareholders elect the members of the Compensation Committee at the AGM.

Discussion of risk assessment and risk management policies by the Risk Committee

In accordance with the respective Organization Regulations of UBS Group AG and UBS AG, the Risk Committee instead of the Audit Committee oversees our risk principles and risk capacity on behalf of the BoD. The Risk Committee is responsible for monitoring our adherence to those risk principles and for monitoring whether business divisions and control units maintain appropriate systems of risk management and control.

Supervision of the internal audit function

The Chairman of the BoD (Chairman) and the Audit Committee share the supervisory responsibility and authority with respect to the internal audit function. Under NYSE standards, only the Audit Committee supervises the internal audit function.

Proxy statement reports of the Audit Committee and the Compensation Committee

NYSE listing standards would require the aforementioned committees to submit their reports directly to shareholders. However, under Swiss law, all our reports addressed to shareholders, including those from the aforementioned committees, are provided and approved by the BoD, which has ultimate responsibility to the shareholders.

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 2017 / 1 Corporate governance - 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.

We provide regular information to our shareholders and to the financial community. Based on discussions with analysts, investors, regulators and other stakeholders, we believe that the market rewards companies that provide clear, consistent and informative disclosure about their business.

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