Annual Report 2005/06 THE WORLD OF SOUND - Sonova

CORPORATE GOVERNANCEThe Board of Directors has committed itself to maintainingthe highest standards of integrity and transparency in itsgovernance of the company. In this, it is guided by the SwissCode of Best Practice and the most recent principles ofCorporate Governance. Corporate Governance describes how ourmanagement is organized and how this is put into practice.It ultimately aims to lead us to success by protecting the interestsof our shareholders while at the same time creating valuefor all stakeholders.Good Corporate Governance seeks to balance entrepreneurship,control and transparency, while supporting the companywith efficient decision-making processes. The Board of Directorsconstantly works on improving the quality of CorporateGovernance.In the course of the previous financial year 2004/05, theBoard of Directors focused on optimizing organizationalstructures and improving shareholders’ rights. The committeestructure was simplified and the rules governing the right ofshareholders to put items on the AGM agenda were changed froma minimum requirement of holding around 30% of the sharecapital to just 5%.During the financial year 2005/06, the Board of Directorsintroduced a number of measures to improve transparency.Attendance at Board of Directors and committee meetingsAnother improvement in this year’s Corporate Governancereport is the disclosure of the individual Board members’ attendanceat Board of Directors and committee meetings.More transparent disclosure of compensationand shareholdingsThe most important measure to improve transparencywas in the area of “Compensation and shareholdings”. In thefuture, the names of the members of the Board of Directorsand of the Management Board who receive the highest level ofcompensation will be provided. In addition to the totalremuneration paid to members of the Board of Directors as agroup, this year’s report provides details of the remunerationpaid to individual members. Similarly, information is provided onthe shareholdings in the Phonak Group owned by individualmembers of the Board of Directors.18Corporate Governance