The Board of Directors of Schaffner Holding AG is responsible for determining the Group’s strategy. It reviews the company’s underlying plans and objectives and identifies internal and external risks and opportunities. The tasks of the Board of Directors of Schaffner Holding AG and the division of powers between the Board and Group Management are defined in the Swiss Code of Obligations, the company’s articles of association and the organization regulations.

The Board of Directors has a quorum when the majority of its members participates in spoken discussions and votes. Members may also be present on the telephone or via electronic media (e.g. videoconferencing). Resolutions are passed by a simple majority vote. If the vote is tied, the Chairman casts the deciding vote. The Board is authorized to pass resolutions in connection with capital increases irrespective of the number of members present. The Board may also pass resolutions regarding proposals submitted to it by written vote insofar as no member requests a spoken discussion. In this case, the resolution is passed if it is supported by the majority of all Board members.

The Board of Directors convenes at least four times a year and generally holds a closed session once a year. It undertakes to ensure that all members are reciprocally and comprehensively
informed at all times.

The Board of Directors convened nine times in fiscal 2008/2009, including twice in the form of a telephone conference. All members of the Board were present except for one telephone
conference where one member was absent. In addition, the Audit Committee met twice and the Compensation Committee once. The Chief Executive Officer and Chief Financial Officer attended all of the meetings of the Board of Directors and the Audit Committee.

Changes in the Board of Directors
Daniel Hirschi was elected as a new member of the Board of Directors for a three-year term at the Annual General Meeting on January 13, 2010, and was elected as the new Chairman at the Board’s constituting meeting. Leo Steiner and Peter E. Rued, whose term of office expired at the 2010 Annual General Meeting, did not stand for re-election.

Election and term of office
The members of the Board of Directors shall be appointed individually by the General Meeting for a term of up to three years and can be reelected. The term shall be determined for each member in his/her election. The term of office of the board members who were (re)elected prior to the ordinary General Meeting 2009 is four years. The statutory maximum age is 70. The Board of Directors constitutes itself. It appoints a Chairman and a Secretary, who does not have to be a member of the Board.

The Board of Directors of Schaffner Holding AG is supported by the committees detailed below. The committees are primarily responsible for providing specialist input as the basis of decisions to be passed by the Board. The committees support the Board of Directors. The duties and powers assigned to the Board rest with the Board as a whole.

The committees are made up exclusively of non-executive directors. They meet as often as necessary and inform the Board as to their findings and proposals at the normal Board meetings. They may also inform the Chairman of the Board or the Chief Executive Officer at any time on matters that require urgent attention. Outside the normal Board meetings, the directors who sit on the committees also work directly with Group Management. The term of office for committee members normally coincides with the term of office of their director’s mandate. If required, however, new committees can be created or existing ones newly appointed or disbanded.

Group Management provides the Board with a monthly written report on the Group’s performance. The reports include details of the individual results of all group companies, which are shown consolidated in the balance sheet and the income and cash flow statements. The figures are compared against the prior-year and budgeted figures. The Board discusses the monthly reports at its meetings. The Chief Executive Officer and the Chief Financial Officer attend all meetings.

Group Management carries out a risk assessment on behalf of the Board of Directors at regular intervals. General risks and the overall balance sheet positions are analyzed and evaluated. Controlling points and processes are defined based on the risk assessment. These are executed by the management responsible for the process. The Board of Directors monitors the risk assessment and checks the risk management processes.

Group Management is headed by the Chief Executive Officer and also includes the Chief Financial Officer and five Vice Presidents for Business Development Asia, Manufacturing, Research & Development, Sales Europe and Supply Chain Management. The Chief Executive Officer is in charge of Global Marketing. Group Management is responsible for implementing the Group‘s business policy in line with the requirements laid down by the Board of Directors, and in particular for achieving annual targets and implementing medium- and long-term goals. It is also responsible for process planning, controlling and implementing Group-wide standards.

The Chief Executive Officer formulates the Group strategy for the attention of the Board of Directors and is responsible for implementing the strategy. He sets the targets for all units of the Group.

The Chief Financial Officer defines the framework for all strategic and operational controlling activities, takes care of the Group’s financing, optimizes its financing and tax structure, and supports the Chief Executive Officer and the other Group Management members in all financial matters.

The Vice Presidents are responsible for achieving the targets set for their areas of authority. These include in particular achieving a leading market position and fostering continuous innovation to support long-term competitiveness.