Corporate governance

Through our corporate governance we ensure responsible and transparent management and control within the LLB Group. The fundamental basis for our corporate governance are the SIX Swiss Exchange directives about corporate governance, the Liechtenstein law concerning the control and supervision of public companies (ÖUSG) and the law concerning the Liechtensteinische Landesbank. In 2011, the Liechtenstein Government issued an investment strategy for LLB.

Major shareholder: The Principality of Liechtenstein

The law concerning the control and supervision of public companies (ÖUSG), which came into force on 1 January 2010, requires the Liechtenstein Government to issue a decree about an investment strategy for the Principality's investment in Liechtensteinische Landesbank AG. On 22 November 2011, the Liechtenstein Government as representative of the majority shareholder, the Principality of Liechtenstein, enacted this investment strategy. The investment strategy defines how the Principality intends to use its majority equity stake in Liechtensteinische Landesbank AG in the medium and long term, thus also giving minority shareholders certainty in planning.

The Liechtenstein Government explicitly supports the stock exchange listing of LLB and maintains its majority stake of at least 51 percent. The Government represents the shareholder interests of the Principality at the General Meeting of Shareholders pursuant to the rights afforded to it by stock corporation law. The Government observes corporate autonomy as well as the rights and obligations resulting from the stock exchange listing. At the same time, the Government, as a shareholder, also respects the decision-making authority of the Board of Di rectors regarding corporate strategy and corporate policy. Drawing on Art. 15 of the Corporate Governance Law, the investment strategy was decided upon after consultation with the Board of Directors of LLB. As an entrepreneurial group that is partly public but at the same time subject to market rules and regulations as well as competition, we are continuously developing our corporate governance further.

Basis

Our corporate management, which is responsible-minded and focused on long-term added value, is characterized by good shareholder relations, efficient cooperation between the Board of Management and the Board of Directors, a success oriented remuneration system as well as transparent accounting and reporting.

The principles and directives defining corporate governance are laid down in two laws: the law concerning the control and supervision of public companies (ÖUSG) of 19 November 2009 and the law concerning the Liechtensteinische Landesbank (LLBG) of 21 October 1992. In addition, they are laid down in the statutes and the regulations of LLB governing the conduct of business, which are regularly reviewed and, if necessary, modified. These documents are based on the directives and recommendations of the «Swiss Code of Best Practice for Corporate Governance» by the Swiss Business Federation (economiesuisse).

Since December 2010 the Board of Directors of the LLB Group has held the «Best Board Practice» labels of the Swiss Association for Quality and Management Systems (SQS) as well as of the Liechtenstein Association for Quality Assurance Certificates (LQS). The activity and organisation of the Board of Directors exhibit a high level of quality.

The following corporate governance report complies with the requirements of the «Directive Corporate Governance» (DCG), valid since 1 July 2002, by the SIX Swiss Exchange as well as its updated commentary of 20 September 2007. If information required by the directives is disclosed in the Notes to the financial statement, a corresponding reference is shown.

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