Geberit AG Annual Report 2004

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Corporate Governance
Board of Directors

Members of the Board of Directors
On 31 December 2004, the Board of Directors was composed of five members.

Kurt E. Feller (1937)

	Non-executive, independent member of the Board of Directors since 1999 Chairman of the Board of Directors since 1999, elected until 2005 Swiss citizen, resident in Wollerau (CH) Chairman Board of Directors Rieter Holding AG, Winterthur, Vice Chairman and Lead Director Ciba SC AG, Basel, member Board of Directors Scintilla AG, Solothurn and Büro-Fürrer AG, Zurich

Having passed the high-school examination (Matura), Kurt E. Feller started his career with Allg. Treuhand AG. In 1962, he joined Feller AG where he was, among other functions, a member of the Management Board and Head of Division. In 1969, he graduated with an MBA from the University of Massachusetts in Amherst and undertook an Executive Program and Senior Executive Program at the IMD in Lausanne. In 1978, he joined Rieter AG where, having held the office of Commercial Director, he was promoted to member of the Group Executive Board in 1979. He was appointed CEO in 1989, President and CEO in 1994 and Chairman of the Board of Directors in 2000 (non-executive from 2003).



Günter F. Kelm (1940)

	Executive member of the Board of Directors since 1997 President since 1997, elected until 2005 German citizen, resident in Jona (CH) Chief Executive Officer (CEO) Geberit AG, Jona, until 31.12.2004

Günter F. Kelm has graduated with the degree of Dipl. Ing. (business engineering) from the Berlin Technical University. From 1966, his career, via various positions and management functions (among others Assistant to the Management Board, Head of Corporate Development, Managing Director, Finance Director) with international industrial companies such as Deutsche Lufthansa, Dornier, Eckes Group and Sommer Allibert, led him to the Geberit Group, which he joined as Chairman of the Management Board of Geberit GmbH Deutschland and member of the Group Executive Board in 1986. From January 1991 until December 2004, Günter F. Kelm was Chief Executive of the Geberit Group.



Dr. Robert Heberlein (1941)

	Non-executive, independent member of the Board of Directors since 2003, elected until 2006 Swiss citizen, resident in Zumikon (CH) Partner at Lenz & Staehelin, Zurich, Chairman Board of Directors Bank am Bellevue, Zurich, member of the Board of Directors Gurit Heberlein, Wattwil

Dr Robert Heberlein studied law at the University of Zurich and received his doctorate in law in 1969. He graduated from the University of Michigan, Ann Arbor, with a Master of Comparative Law (MCL) in 1970. After working for various law firms, including in New York and Paris, he joined Staehelin & Giezendanner, now Lenz & Staehelin, in 1972. He has been a partner of that law firm since 1977.



Rudolf Maag (1946)

	Non-executive, independent member of the Board of Directors since 2000, elected until 2006 Swiss citizen, resident in Binningen (CH) Chairman Board of Directors Straumann Holding AG, Waldenburg, member of the board Chamber of Commerce of Basel

Rudolf Maag holds a commercial diploma and graduated with the degree of an INSEAD MBA. He started his career in 1968 with UTC (Basler Handelsgesellschaft). In 1973, he joined Sandoz AG where he held various management positions in the agricultural division, among other functions, as Marketing and Sales Director USA and Head of Division Brazil. In 1986, Rudolf Maag joined Institut Straumann AG as a Director. Four years later, he founded Stratec Medical by way of a management buy-out. Following a successful Initial Public Offering in 1996, Stratec merged with the US company Synthes Ltd. to form Synthes-Stratec. Rudolf Maag became Vice Chairman of the Board of Directors and CEO. In 2000, he left Synthes-Stratec to act as an independent member of various Boards of Directors as well as a private equity investor.



Klaus Weisshaar (1938)

	Non-executive, independent member of the Board of Directors since 1999, elected until 2007 German citizen, resident in Frankfurt a.M. (DE) Member Supervisory and Advisory Boards of various German industrial enterprises, among others Burg Bad AG, Schmallenberg, Siepmann-Werke, Warstein and F.W. Oventrop, Olsberg

Klaus Weisshaar holds a diploma in economics (University of Freiburg i.Brsg.) and started his career as a management consultant for industrial companies. After three years in the packaging industry, he joined Friedrich Grohe GmbH in 1977 where, until his retirement in 1998, he held several major management positions, among other functions, as Controller, Director Finance, Speaker of the Board of Management, and, since 1993, Chairman of the Board of Management.

Cross-involvement

There is no cross-involvement among Boards of Directors.

Elections and terms of office

The term of office for each member of the Board of Directors is three years and the statutory retirement age limit has been established at 70 years. Individual members are re-elected on a staggered basis.

The term of office for both Kurt E. Feller and Günter F. Kelm is set to expire at the general meeting on 26 April 2005. Both Directors have made themselves available for an additional term re-election.

Internal organizational structure

The organization of the Board of Directors is based on the “Organization Regulation of the Board of Directors of Geberit AG”. It determines the duties and powers of the Board of Directors and constitutes the framework for the tasks and responsibilities of the Group Executive Board.

The Board of Directors is self-constituting. In the first meeting following the relevant ordinary general meeting in which re-elections are held, the Board of Directors elects the Chairman and President from among its members. Until 31 December 2004, the positions of President of the Board of Directors and Chief Executive were held by the same person.

The Board of Directors meets whenever business so requires, usually six times every year for one day each. The meetings are chaired by the Chairman or – if he is unable to do so – by the President of the Board of Directors. The Board of Directors appoints a secretary who is not required to be a member of the Board of Directors. Upon consultation with the Chairman of the Board of Directors, the President may invite members of the Group Executive Board to attend meetings of the Board of Directors.

The Board of Directors can decide, when the majority of its members are present. The members may also attend via telephone or electronic media.

The Board of Directors has formed two committees from among its members:

– Personnel Committee

The members of the Personnel Committee are Kurt E. Feller (Chairman), Günter F. Kelm and Rudolf Maag. The committee meets at least twice every year for a half day each. It develops proposals to be submitted to the entire Board of Directors, including personnel decisions and the determination of compensation regulations and models (salaries, bonus payments, share and option plans) as well as the annual determination of the compensations for the Board of Directors and Group Executive Board. Therefore, the tasks and responsibilities of a compensation and a nomination committee are combined in this committee. Günter F. Kelm, as a member of the personnel committee, does not take part in the Personnel Committee or general Board of Director discussions in which his compensation as President and CEO are discussed. Detailed responsibilities are stipulated in the organization regulation of the Personnel Committee.

– Audit Committee

The Audit Committee is composed of the four nonexecutive, independent members of the Board of Directors, Kurt E. Feller (Chairman), Dr Robert Heberlein, Rudolf Maag and Klaus Weisshaar. It meets at least twice every year for one day each. The committee’s tasks include in particular the supervision of the internal and external audit as well as the control of the financial reporting. It determines the scope and planning of the external and internal audit and monitors the implementation of the conclusions of the audit. The Audit Committee also assesses the functionality of the internal control system, including risk management. It may invite members of the Group Executive Board to attend its meetings. Furthermore, it is entitled to hold meetings exclusively with representatives of the external as well as the internal auditors. The detailed responsibilities are stipulated in the organization regulation of the Audit Committee.

Definition of areas of responsibility

Pursuant to article 716a, subparagraph 1 of the Swiss Law of Obligations (Schweizerisches Obligationenrecht), the Board of Directors of Geberit AG has the following non-transferable and irrevocable responsibilities:

supervision of the Company and giving the instructions required
determination of the organization
design of the accounting, financial control as well as financial planning to the extent required for managing the Group
appointment and dismissal of the persons responsible for management and representation
supervision of the persons responsible for management, in particular with respect to compliance with the laws, articles of incorporation, regulations and instructions
establishment of the annual report and preparation of the general meeting and the implementation of its resolutions
notification of the judge in case of a debt overload

The Board of Directors determines the strategic goals and general means to reach such goals and makes decisions on major business transactions. To the extent legally permissible and in accordance with the Organization Regulation, the Board of Directors, ultimately in 2004, assigned the operational management to the President of the Board of Directors.

Until 31 December 2004, the President of the Board of Directors was concurrently the Chief Executive Officer. As of 1 January 2005, the Group Executive Board is composed of the Chief Executive Officer and three other members. The members of the Group Executive Board are appointed by the Board of Directors based upon the suggestion of the Personnel Committee.

The Organization Regulation, effective until 31 December 2004, rules the duties and powers of the Board of Directors as a governing body, of the Chairman, the committees as well as of the President. Thus, it also defines the rights and duties of the Group Executive Board that are set forth in more detail in the Internal Regulations for the Group Executive Board.

Information and control instruments vis-à-vis the management board

At every meeting, the Group Executive Board informs the Board of Directors of current business developments and major business transactions of the Group or Group companies, as the case may be. Between meetings, the Board of Directors is informed in writing of current business developments and the Company’s financial situation on a monthly basis. In the past year, the Board of Directors held five ordinary meetings. Urgent decisions are made using telephone conferences.

Furthermore, the Chairman of the Board of Directors and the Chief Executive Officer were in contact at regular intervals with respect to all major issues of corporate policy. Each member of the Board of Directors may individually demand information with respect to all matters of the Group or Group companies, as the case may be. In the year under review, the Personnel Committee held four meetings and the Audit Committee two meetings. The external and internal auditors have access to the minutes of the meetings of the Board of Directors and Group Executive Board.