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18 Corporate Governance(ii) reviewing and assessing the scope and plan of the audit, the examination process and the results of the audit, and examining whether the recommendations issued by the auditors have been implemented by the Executive Committee;(iii) reviewing the auditors%u2019 reports and discussing their contents with the auditors; and(iv) approving the terms and conditions of the engagement of the auditors.Also, it has the following powers and duties in relation to the internal control system (internal audit, risk management, and compliance):(i) monitoring, reviewing, and assessing the effectiveness of the internal audit function, its professional qualifications, resources, and independence, and its cooperation with external audit;(ii) approving the annual internal audit plan and the annual internal audit report, including the responses of the management thereto;(iii) assessing the risk management and the procedures related thereto; and(iv) assessing the state of compliance with laws, regulations, and internal rules and policies of the Group and the procedures related thereto.In addition, the Audit Committee reviews, in cooperation with the auditors, the CEO and the CFO, whether the accounting principles and the financial control mechanism of the Company and its subsidiaries are appropriate in view of the size and complexity of the Group.Furthermore, the Audit Committee has the following powers and duties in relation to the preparation of the financial statements:(i) reviewing the annual and interim statutory and consolidated financial statements;(ii) discussing these financial statements with the CFO and, separately, with the Group external auditor for the annual financial statements; and(iii) making proposals to the Board of Directors with respect to the annual and interim statutory and consolidated financial statements (the responsibility for approving the annual and interim financial statements at the level of the Board of Directors remains with the Board of Directors).Finally, the Audit Committee collects the necessary information and discusses the reporting on non-financial matters.The Audit Committee usually holds five meetings annually. The Chairperson of the Board of Directors may take part in the meetings as a guest. Unless otherwise determined by the Audit Committee, the CFO takes part in all meetings, while the Head of Group Internal Audit is invited as a guest, whenever needed. In 2023, the lead audit partner attended three meetings of the Audit Committee. The Audit Committee%u2019s Chair reports to the other members of the Board of Directors about the topics discussed in detail and decisions made and/or to be submitted to the entire Board of Directors for approval. For an overview of the number of Audit Committee meetings, the average duration and the average attendance, please refer to the section Work Methods of the Board of Directors and its Board Committees.Nomination and Compensation CommitteeThe Nomination and Compensation Committee consists of at least three members of the Board of Directors, of which the majority are non-executive and independent. Since the Ordinary General Meeting 2014, the members of the Nomination and Compensation Committee have been directly elected by the General Meeting for a one-year term. Re-election is possible. In case of vacancies, the Board of Directors shall appoint the substitutes. The Board of Directors designates one member of the Nomination and Compensation Committee as its Chair each year at the first meeting of the Board of Director%u2019s after the Ordinary General Meeting. Accordingly, its current members are Eunice ZehnderLai (Chair), Adrian T. Keller, and Gabriel Baertschi.In relation to its nomination responsibility, the Nomination and Compensation Committee regularly reviews and makes proposals as to the composition of the Board of Directors and of the Executive Committee, including, but not limited to, making proposals as to vacancies in the Board of Directors and the Executive Committee and as to the appointment and dismissal of members of the Executive Committee.As to compensation, the Nomination and Compensation Committee has the following duties and responsibilities:(i) preparing proposals for submission to the Board of Directors on the compensation policy, including the principles for performance-related compensation and the allocation of securities, conversion or option rights, entitlements or other financial instruments for the Board of Directors and the Executive Committee;(ii) preparing proposals for submission to the Board of Directors on the maximum aggregate compensation for the Board of Directors and the Executive Committee;(iii) preparing proposals for submission to the Board of Directors on the specific design of the participation plans;(iv) preparing proposals for submission to the Board of Directors on the specific design of the employment contracts of the members of the Executive Committee and conditions for termination;(v) preparing proposals for submission to the Board of Directors on the individual compensation of the members of the Executive Committee within the scope of the Articles of Association and subject to approval by the General Meeting, including, but not limited to, the allocation and definition of compensation-relevant performance objectives and further conditions as well as the verification of the fulfillment of conditions or agreed objectives;