Compliance and governance processes are proving themselves
With regard to compliance and governance, the year under review was full of contrasts: On the one hand, RUAG made progress in achieving the targets set by the Federal Council and its risk management was successfully audited. On the other hand, various business transactions had to be reviewed. On top of this, CEO Brigitte Beck decided to leave RUAG.
RUAG has largely achieved its goal of providing the Swiss Armed Forces with high-quality, cost-optimized services in line with requirements and deadlines. The standardization of the SAP systems in 2024 will enable RUAG to provide services more efficiently and effectively and to improve process transparency.
Moreover, RUAG has coordinated its real estate strategy as well as its 10-year financial plan with the owner. The clean-up of asset erosion in real estate will extend well beyond the medium-term planning period.
The goals in the areas of compliance and governance were all achieved, the risk management was further developed and also successfully audited by an external service provider. The requirements for third-party business were met, although profitability is to be further optimized. The owner’s profitability target, however, could not be achieved in 2023.
In light of two public appearances by Brigitte Beck in spring 2023 and the resulting controversy, the CEO decided to leave the company at the beginning of August. Until the appointment of a new CEO, Christian Priller, CFO, and Thomas Kipfer, Head of Business Area Air, will jointly lead RUAG.
After the German company Rheinmetall had shown interest in 96 Leopard 1 main battle tanks stored in Italy, a contract was signed in February 2023 under the condition that the deal could only be concluded with legally binding approval. On June 28, 2023, the Federal Council decided not to approve the deal.
At the end of August, the DDPS commissioned an audit of the Leopard 1 deal from the Swiss Federal Audit Office (SFAO): The SFAO subsequently investigated the events surrounding procurement, management and the contract with Rheinmetall since 2016. At the same time, RUAG itself launched a review of its internal business processes. The investigations are conducted independently of each other and are still ongoing.