Supervision of company management by the Supervisory Board
- Supervisory Board appoints, monitors and advises Board of Executive Directors
- Four Supervisory Board committees
The Supervisory Board appoints the members of the Board of Executive Directors and supervises and advises the Board on management issues. As members of the Supervisory Board cannot simultaneously be on the Board of Executive Directors, a high level of autonomy is already structurally ensured with regard to the supervision of the Board of Executive Directors.
In addition to the SE Council Regulation, the relevant legal basis for the size and composition of the Supervisory Board is provided by the Statutes of BASF SE and the Agreement Concerning the Involvement of Employees in BASF SE (Employee Participation Agreement), which also includes the regulations applicable to BASF for implementing the gender quota for the Supervisory Board mandated by law as of January 1, 2016. The German Codetermination Act does not apply to BASF as a European stock corporation (Societas Europaea, SE).
The Supervisory Board of BASF SE comprises twelve members. Six members are elected to a five-year term each by the shareholders at the Annual Shareholders’ Meeting. The remaining six members are elected by the BASF Europa Betriebsrat (BASF Works Council Europe), the European employee representation body of the BASF Group.
The meetings of the Supervisory Board and its committees are called by their chairmen and, independently, at the request of one of their members or the Board of Executive Directors. Resolutions of the Supervisory Board are passed by a simple majority vote of the participating members. In the event of a tie, the vote of the Chairman of the Supervisory Board, who must always be a shareholder representative, shall be the casting vote. This resolution process is also applicable for the appointment and dismissal of members of the Board of Executive Directors by the Supervisory Board. Resolutions can, as needed, also be made in writing or through other means of communication outside of the meetings, as long as no member objects to this form of passing a resolution.
BASF SE’s Supervisory Board has established a total of four Supervisory Board Committees: the Personnel Committee, the Audit Committee, the Nomination Committee and the Strategy Committee.
The members of the Supervisory Board of BASF SE, including their membership on the supervisory bodies of other companies, are listed under Management and Supervisory Boards
Compensation of the Supervisory Board is described in detail in the Compensation Report
Dr. Jürgen Hambrecht (chairman), Michael Diekmann, Robert Oswald, Michael Vassiliadis
- Prepares the appointment of members to the Board of Executive Directors by the Supervisory Board as well as the employment contracts to be entered into with members of the Board of Executive Directors
- When making recommendations for appointments to the Board of Executive Directors, considers professional qualiﬁcations, international experience and leadership skills as well as long-term succession planning, diversity, and especially the appropriate consideration of women
- Prepares the resolutions made by the Supervisory Board with regard to the system and amount of compensation paid to members of the Board of Executive Directors
Dame Alison Carnwath DBE (chairman), Ralf-Gerd Bastian, Franz Fehrenbach, Michael Vassiliadis
- Prepares the negotiations and resolutions of the Supervisory Board for the approval of the Financial Statements and Consolidated Financial Statements, and discusses the quarterly statements and half-year ﬁnancial reports with the Board of Executive Directors prior to their publication
- Deals with monitoring the ﬁnancial reporting process, the annual audit, the effectiveness of the internal control system, the risk management system, and the internal auditing system as well as compliance issues
- Is responsible for business relations with the company’s external auditor: prepares the Supervisory Board’s proposal to the Annual Shareholders’ Meeting regarding the selection of an auditor, monitors the auditor’s independence, deﬁnes the focus areas of the audit together with the auditor, negotiates auditing fees and establishes the conditions for the provision of the auditor’s nonaudit services
- Is authorized to request any information that it deems necessary from the auditor or Board of Executive Directors; can also view all of BASF’s business documents and examine these and all other assets belonging to BASF. The Audit Committee can also engage experts such as auditors or lawyers to carry out these inspections
Dame Alison Carnwath DBE and Franz Fehrenbach are members with special knowledge of, and experience in, applying accounting and reporting standards and internal control methods pursuant to the German Corporate Governance Code.
Dr. Jürgen Hambrecht (chairman), Dame Alison Carnwath DBE, Prof. Dr. François Diederich, Michael Diekmann, Franz Fehrenbach, Anke Schäferkordt
- Identiﬁes suitable candidates for the Supervisory Board based on objectives for the composition decided on by the Supervisory Board
- Prepares the recommendations made by the Supervisory Board for the election of Supervisory Board members for the Annual Shareholders’ Meeting
Dr. Jürgen Hambrecht (chairman), Dame Alison Carnwath DBE, Michael Diekmann, Robert Oswald, Michael Vassiliadis
- Handles the further development of the company’s strategy
- Prepares resolutions of the Supervisory Board on the company’s major acquisitions and divestitures
Meetings and meeting attendance
In the 2016 business year, meetings were held as follows:
- The Supervisory Board met five times.
- The Personnel Committee met four times.
- The Audit Committee met five times.
- The Nomination Committee met once.
- The Strategy Committee did not meet.
With the exception of one Supervisory Board meeting at which one member was absent due to illness, all respective members attended all meetings of the Supervisory Board and its committees.
Click here for an individual overview of meeting attendance
Objectives for Supervisory Board composition
- Composition criteria: professional and personal qualiﬁcations, diversity, and independence
One important concern of good corporate governance is to ensure that seats on the responsible corporate bodies, the Board of Executive Directors and the Supervisory Board, are appropriately ﬁlled. Seats on the Board of Executive Directors and Supervisory Board of BASF SE should be filled with members who ensure a well-balanced consideration of all the knowledge, skills and personal qualiﬁcations necessary to manage and supervise BASF as a large, globally operating, capital market-oriented company in the chemical industry.
On October 21, 2010, the Supervisory Board agreed upon objectives for the composition of the Supervisory Board in accordance with Section 5.4.1 of the German Corporate Governance Code; these were supplemented in the Supervisory Board meetings of December 20, 2012, and October 22, 2015. According to these objectives, the Supervisory Board shall be composed in such a way that the members as a group possess knowledge, ability and expert experience in the following:
- The management of an internationally operating company
- Cross-industry value creation along different value chains
- The application of accounting principles and internal control procedures
- The ﬁeld of technical and scientiﬁc innovations in the chemical sector and associated industries as well as in the sectors using chemical products.
At least one independent member of the Supervisory Board must have expertise in the ﬁelds of accounting or auditing as per Section 100(5) of the German Stock Corporation Act (AktG). With regard to diversity, the Supervisory Board shall consider a variety of professional and international experience as well as the participation of women. Individuals who may have a conﬂict of interest shall not be nominated for election to the Supervisory Board. The same applies to candidates who will have reached the age of 70 by the day of the election. Membership on the Supervisory Board should generally not exceed 15 years; this corresponds to three regular statutory periods in ofﬁce. The members of the Supervisory Board elected at the Annual Shareholders’ Meeting already fulﬁll this target – in effect since October 2015 – with one exception.
With regard to independence, the Supervisory Board aims to ensure that all Supervisory Board members are independent as deﬁned by the terms of the Code. In assessing independence, the Supervisory Board assumes that neither election as an employee representative, nor membership on the Board of Executive Directors more than two years in the past, nor the duration of membership on the Supervisory Board, taken in isolation, precludes the classiﬁcation as independent.
On this basis, the Supervisory Board has determined that all of its current members can be considered independent. We ﬁrmly believe that the current composition fulﬁlls the objectives with the aforementioned exception regarding the period of membership.