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Corporate Governance

The Board of Directors and the Management Board manage the Company in accordance with all applicable laws and regulations in force in the European Union as well as the legal and regulatory requirements of the Grand Duchy of Luxembourg and the Articles of Association of Baumann & Partners with the aim of sustainable value creation and in the interest of the Company.

The interests of shareholders, employees and other stakeholders are taken into account.


Board of Directors and Management Board


Board of Directors

The Board of Directors has overall responsibility for the Company. The Board of Directors is responsible for defining, monitoring and establishing sound overall management, corporate governance and internal control. This includes establishing a clearly structured internal organisation and independent internal control functions. The framework put in place must ensure the sound and prudent management of the Company, secure its continuation and safeguard its reputation.

As such, the Board of Directors is responsible for the following issues, including:

  • the business strategy
  • the risk strategy
  • procedures for the monitoring and identification of risks
  • the strategy with regard to prescribed internal capital resources and liquidity reserves
  • a clear and coherent organisational and operational structure
  • establishing the framework conditions with regard to the information system, technology and security
  • adequate internal control mechanisms
  • remuneration policies and practices that are consistent with and promote sound and effective risk management
  • procedures for the monitoring and identification of risks
  • a framework of rules for maintaining business operations in the event of business disruptions


The Board of Directors is composed of three members. All three members have at least 20 years of investment experience and many years of management experience.


Management Board

The authorised Management Board is responsible for the day-to-day management of the business while adhering to the strategic directions and policies approved by the Board of Directors. In particular, it shall also safeguard and take into consideration the long-term financial interests of the Company as well as its solvency and liquidity situation.


The Management Board consists of two persons who are permanently on site. Both of the Managing Directors hold degrees in economics and have at least 20 years of investment experience in various areas and many years of management experience. One Managing Director has completed additional training to become a certified compliance officer. In addition, one Managing Director is also a member of the Board of Directors. This ensures that all material issues are brought to the attention of the entire Board of Directors in a timely manner.



Risk Management Objectives and Policy


Risk management is a fundamental component of the Company’s business practices at all levels. It encompasses various types of risk. At the level of the Management Board, risk management constitutes an integral part of the Company’s business planning and controlling processes. Material risks are monitored and regularly discussed with the Board of Directors and the Risk Management Officer.


The Company conducts an annual risk review in accordance with Luxembourg laws and EU regulations. The Company’s risk management system encompasses both financial and operational risks. The term “Risk” refers to the possibility of a negative event occurring that adversely affects the achievement of the Company’s objectives. This involves assessing not only the probability of occurrence but also the impact of a possible risk on the Company.


Risk management as an integral component of the Internal Control System

Risk management is an integral component of the Internal Control System (ICS), which is based on the classic Three Lines of Defense model that takes a systematic approach to risks. The first line of defense is Operations Management, which operates on the basis of defined procedures and is capable of identifying and assessing risks. The second line of defense – in addition to Compliance, Accounting and IT – is Risk Management. It is designed to monitor and support operations. Within the ICS, Internal Audit, which must be independent, represents the third line of defense for monitoring risk management. In view of its size, Baumann & Partners has decided to outsource its auditing and has appointed an external auditing company for this purpose.


Within the risk management system, preventive measures and mitigation measures are taken at different levels and are an integral part of management responsibility. Operational risks are dealt with wherever they arise in accordance with the defined areas of competence.

Financial risks are assessed and evaluated by the Accounting and Asset Management departments. Operational risks are identified on the basis of the workflow descriptions of the individual departments. Strategic risks are addressed at the level of the Management Board. The Management Board reports to the Board of Directors on risk management. All risks identified are recorded and assessed in the Company’s risk table, which is presented to the Board of Directors after each update.


Risks include:


  • Financial risks such as interest-rate, credit, liquidity and currency risks, which are continuously monitored and controlled in Accounting and Asset Management.
  • The risks from Asset Management and Sales are minimised primarily through the use of standardised forms and corresponding monitoring by the Company’s internal systems as well as compliance in this area. The Company has also taken out a corresponding insurance policy which can absorb any losses that may arise.
  • Risk policy is of central importance due to the growing challenges of global and economic developments as well as the uncertainties on the financial markets, which are counteracted by adequate risk diversification and the avoidance of cluster risks.
  • The focus is on both operational preparedness and IT network availability. The risk-reduction measures in this context include continuous system monitoring and back-up structures.
  • Organised crime and the threat of terrorism, combined with increased regulation, increasing complexity and customer expectations have led to a rise in security requirements and risks, which must be addressed by taking a holistic view of supply chains from a security perspective.
  • Money laundering (AML) and terrorist financing risks. These risks are addressed through due diligence and know-your-customer processes, checks against blacklists and sanctions lists, training and regular AML controls such as transaction monitoring.
  • Various measures are taken to counter legal and compliance risks, such as fraud risks and risks of intentional and unintentional statutory non-compliance. This includes, among other measures, employee training, regular compliance checks and the specification of defined work processes that employees are expected to comply with.
  • Communication risks with implications for the capital market as well as image and reputation risks, e.g. in connection with compliance aspects, are taken into account by, among other means, introducing a documentation requirement that makes the processes transparent.


Continuous dialogue between the Management Board, Risk Management and the Board of Directors is intended to ensure the effectiveness of the Company in this area. The Company’s risk table is subject to regular review and critical examination, which ensures the continuous development of the risk management system.

The Management Board plans the risks of the Company prudently against the framework of long-term planning for the Company’s success.


Based on the business model, which consists of the areas of Asset Management and Investment Advisory Services for institutional clients as well as the processes and controls in place, the Management Board considers the overall risk to be very low.


The equity capital amounts to EUR 984,000 as of 31/12/2020. The equity ratio is 31.1%.