At SGS, strong governance structures underpin the delivery of our sustainability strategy.
Board of Directors and Board Committees
The Board of Directors is responsible for the ultimate direction of the Group and reviews sustainability risks as part of its annual risk review. The Board is also responsible for SGS’s top-level strategy, mission and values.
The duties of the Chairman of the Board of Directors (a non-executive role) include approving top-level strategy and policies (including those that affect sustainability risks), determining the remuneration of the Chief Executive Officer (CEO) and setting our mission and values.
A new Risk Management Oversight Committee (RMOC), which is chaired by the CEO, has been established. This includes senior representatives from various key departments, such as the CFO, CIO and Senior Vice President, Human Resources. The Committee is expected to meet twice a year and on an ad-hoc basis as necessary. The RMOC’s role is to manage the ERM framework. It reports directly to the Board.
The Board of Directors reviews sustainability risks as part of its annual risk review. The Operations Council oversees and approves our sustainability strategy, which is developed by the Sustainability Steering Committee and coordinated day-to-day by the Corporate Sustainability Team.
Other roles include:
- The Audit Committee: reviews risk management, regulatory compliance and internal controls
- The Professional Conduct Committee: responsible for ensuring the implementation of our professional conduct policies and for advising management on all issues of business ethics
- The Group Chief Compliance Officer: responsible for implementing procedures governing ethical behavior and conducting investigations on alleged staff misconduct
- The Nomination and Remuneration Committee: reviews the compensation of the Operations Council members (excluding the CEO) and oversees nomination of Board Members
The Operations Council (OC):
It is responsible for the operational management of the Group and approval and implementation of business strategy, including approving sustainability policies, strategies and targets. The OC is chaired by the CEO, who has ultimate responsibility for our operational integrity and sustainability performance.
Sustainability Steering Committee
The Sustainability Steering Committee supports the Operations Council and meets twice a year to develop SGS’s sustainability strategy, review our management approach and performance and agree on core programs and targets. Chaired by the CEO, the Sustainability Steering Committee comprises 14 Chief Operating Officers, Executive Vice Presidents and Senior Vice Presidents representing the full breadth of the SGS Group in terms of regions, functions and services.
Diversity, Parity and Equal Opportunity in our Governance Bodies
We recognize that a robust Board of Directors, representing a complementary range of appropriate skills and recruited with due regard to the benefits of diversity, is essential for achieving our strategic objectives. The Nomination and Remuneration Committee identifies individuals believed to be qualified to serve on the Board and oversees the size and composition of the Board, in consideration of the need for balance in terms of complementary of skills and diversity, and the judgment of the Directors:
- Complementary of skills refers to an individual’s or group’s full range of competencies in terms of skills, knowledge and experience
- Diversity refers to demographic diversity including, but not limited to, gender, race, color, age, nationality, religion, political affiliation, language, sexual orientation, social origin, cultural background or disability
As a global business with more than 97,000 employees worldwide, we have a diverse workforce that spans nationalities, cultures, religions, generations and genders. We recognize how diversity contributes to our business success. Our approach is grounded in our Business Principles, which define “Respect” as “making sure that we treat all people fairly.”
We actively manage discrimination risks, and closely monitor our performance on gender equality. The members of our Board of Directors and Operating Council exemplify that diversity: one member of the Board of Directors is a woman, and between the Board of Directors and Operating Council, 15 different nationalities are represented. SGS benefits from the skills, knowledge and cultural diversity that these team members bring to the organization; each of them contributes to overall diversity by providing a variety of perspectives, personal and professional experiences and backgrounds, as well as other favorable attributes, such as global and international business experience.
Overall, in 2018, SGS’s global workforce was 67% male and 33% female, showing a stable year-on-year equal opportunity ratio of 0.89. The number of women in leadership roles, defined as all positions up to three levels below the CEO (CEO -3), was 316, representing 26.4% of all CEO -3 management positions occupied.
We also promote parity in salaries and transparency of the remuneration of the Governance Bodies. Salaries and wages are published in page 117 of our 2018 Annual Report and the CEO’s annual compensation can be found on pages 107, 109 and 113 of the Annual Report. The ratio between the total annual compensation of the CEO and the mean of employee compensation for 2018 was 25.56*.
*To make the ratio comparable, we have implemented cost of living adjustments using the Purchasing Power Parity conversion rates and it is calculated based only on base salary and bonuses (excluding pension funds and extra hours)
Corporate Sustainability Team
Led by the Group Vice President, Corporate Communications and Sustainability – who reports to the CEO – the Corporate Sustainability Team consults with the Sustainability Steering Committee to support the development of the Group’s sustainability strategy and propose appropriate approaches and targets.
The Corporate Sustainability Team also oversees our sustainability management system, materiality processes and other related projects on a day-to-day basis. Measuring and reporting on sustainability performance through the Green Book, liaising with external stakeholders and supporting affiliates in improving performance are also critical tasks for the department.
The team ensures that sustainability is embedded throughout the SGS Group and that each function operates in line with SGS’s Integrated Leadership Model. This is partially achieved through the supervision, co-leadership and coordination of various sustainability-related projects undertaken by these functions.
At a local level, initiatives are executed by our affiliates. Sustainability ambassadors are charged with overseeing this in our largest countries of operation.
SGS Annual Report 2018
Our general governance structures and processes are described in more detail in the SGS Annual Report.