Corporate Governance

For BCF, good corporate governance means clearly defined powers and responsibilities, transparent interaction among the Management team, and control at all levels of the Bank.

The Swiss Code of Best Practice for Corporate Governance is aimed at Swiss public companies. It contains rules of conduct and recommendations. Each company retains the right to develop its own organizational principles. Since the Canton of Fribourg is the Bank’s sole owner, the Swiss Code of Best Practice for Corporate Governance is not strictly applicable to BCF. However, as a bond-issuing company and as a responsible and transparent institution, BCF has chosen to adopt certain of its recommendations.

Structure

Banque Cantonale de Fribourg is a legal entity under public law, separate from the government, and does not constitute a group within the meaning of the accounting standards applicable to the Bank. The Bank’s structure and organisation are presented in the organisational chart. BCF has no controlling interests and is therefore not required to prepare consolidated financial statements. The participations are listed in the notes to the annual financial statements in the annual report.

Owner

The Canton of Fribourg owns 100% of the BCF.

Cross-shareholdings

BCF does not hold any cross-shareholdings.

Capital structure

The endowment capital of Banque Cantonale de Fribourg amounted to CHF 70 million as at 31 December 2023.

Over the past few years, equity (before profit distribution) has developed as follows, based on the accounting rules in force:

The Board of Directors meets both in plenary sessions and in special committees organized in accordance with Article 26, paragraph 2 of the BCF Law.

Composition and term of office

This committee is composed of at least three members, in accordance with Article 3.8.2 of the BCF’s General Regulations. They are elected for a term of four-year. The members of the committee may be re-elected, but their maximum term of office may not exceed twelve years. The committee is composed of Yves Riedo (chairman), Urs Gauch (vice-chairman), Thomas Bachmann (member) and Paul Such (member).

Activities

The committee’s activities are governed by the FINMA circulars and are defined in the regulations of the Audit and Risk Committee.

Composition and term of office

The committee consists of three members and one deputy member. They are elected for a term of four years. The members of the committee may be re-elected, but their maximum term of office may not exceed twelve years. The committee consists of Alex Geissbühler (chairman), Dominique Jordan Perrin (member), Paul Such (member) and Yves Riedo (alternate member).

Activities

The Compensation Committee is responsible for reviewing the Bank’s compensation policy and determining the compensation of the Executive Board and the Head of Internal Audit.

The General Regulations define how the executive bodies are organised, their scope of responsibilities and authority, and the principles of the BCF’s activity as a bank. In accordance with the provisions of the Banking Act, responsibility for operational management is delegated to the Management team.

BCF has a well-developed and standardized management information system (MIS) that enables the Board of Directors to fulfill their supervisory duties and check the powers delegated to the Management team. Each month, the Board of Directors receives a summary of the financial statements comparing the period’s results with the budget and the previous year, as well as reports on risk. It then compares the current situation with the corresponding limits. BCF also has an internal control system (ICS) designed to ensure that the Bank is operating properly. The systems and processes in place keep the Board of Directors periodically informed of relevant facts, events and developments.

At Board of Directors’ meetings, the CEO and other members of the Management team report on the operations of the business in their departments. The Chairman of the Board will immediately inform the Board of Directors in the case of extraordinary events.

BCF has independent Risk Management and Compliance functions. On the basis of the organization defined by the Board of Directors, the heads of the internal functions regularly inform the Audit and Risk Committee with respect to how the internal control system is operating, its adequacy, and their functions’ compliance with regulatory provisions. The Compliance function reports directly to the Audit and Risk Committee. In addition, all BCF employees may directly contact Compliance at any time and in full discretion (e.g. as a whistleblower) in the event of a conflict of interest that cannot be resolved with senior management. The Risk Management and Compliance functions periodically prepare comprehensive reports on the results of their work for the Audit and Risk Committee and for the full Board of Directors.

The Audit and Risk Committee reviews the annual activity report of the Compliance and Risk Management functions.

Composition as of 01.01.2024

_ Fabien Emery, Head of Internal Audit
_ Julien Mardon, Senior Internal Auditor
_ Constantin Anatrà and Lionel Carron, Internal Auditors

Activities

The activities of the Board of Directors and in particular the Audit and Risk Committee are supported by the independent Internal Audit function and by the external auditor. Internal Audit reports to the Board of Directors. Internal Audit and the external auditing firm maintain an ongoing dialogue on risk assessment and the risk situation. Internal Audit and the external auditing firm each perform an independent risk analysis.

The Audit and Risk Committee adopts Internal Audit’s annual plan. The auditing services of Internal Audit and of the external auditing firm are coordinated with regard to their respective tasks. The Audit and Risk Committee monitors the activities of Internal Audit. A separate regulation defines Internal Audit’s working method. The results of Internal Audit’s controls are discussed at every Audit Committee meeting.
In addition, Internal Audit prepares annual and semi-annual activity reports for the Board of Directors.

Ernst & Young SA, Lancy
Appointed by the Board of Directors on October 31, 2017.

The external auditing firm prepares its overall report and that of the financial auditor (in accordance with Article 728b paragraph 1 of the Swiss Code of Obligations) as well as the report on the basic prudential audit. The overall report covers the financial year and is submitted to the Board of Directors. The report on the prudential audit covers the calendar year and is submitted to the Swiss Financial Market Supervisory Authority (FINMA), with a copy to the Board of Directors. Both reports are discussed by the Audit and Risk Committee of the Board of Directors in presence of the external auditing firm.