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 of Executive Directors 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 statutory gender quota for the Supervisory Board. The German Codetermination Act does not apply to BASF as a European stock corporation (Societas Europaea, SE).

The Supervisory Board of BASF SE comprises 12 members. Six members are elected 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. It is planned to reduce the period of appointment for the members of the Supervisory Board from five to four years. The aim is to ensure that the maximum membership duration up to which a Supervisory Board member can be classified as independent continues to correspond to a total of three election terms. The Supervisory Board reduced this duration from 15 to 12 years in accordance with the new version of the German Corporate Governance Code, which was revised in 2019 (2020 Code). A change to the Statutes to this effect will be proposed to the Annual Shareholders’ Meeting 2020.

The meetings of the Supervisory Board and its committees are called by their chairpersons and, independently, at the request of one of their members or the Board of Executive Directors. The shareholder and employee representatives of the Supervisory Board prepare for Supervisory Board meetings in separate preliminary discussions in each case. 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.

The Board of Executive Directors regularly informs the Supervisory Board about matters such as the course of business and expected developments, the financial position and results of operations, corporate planning, the implementation of the corporate strategy, business opportunities and risks, and risk and compliance management. The Supervisory Board has embedded the main reporting requirements in an information policy. The Chairman of the Supervisory Board is in regular contact with the Board of Executive Directors, especially with its chairman, outside of meetings as well.

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.

Personnel Committee

Members

Dr. Jürgen Hambrecht (chairman), Michael Diekmann (until May 3, 2019), Franz Fehrenbach (since May 3, 2019), Sinischa Horvat, Michael Vassiliadis

Duties

• 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

Audit Committee

Members

Dame Alison Carnwath DBE (chairman), Tatjana Diether, Franz Fehrenbach (until February 29, 2020), Anke Schäferkordt (since March 1, 2020), Michael Vassiliadis

Duties

• Prepares the negotiations and resolutions of the Supervisory Board for the approval of the Financial Statements, the Consolidated Financial Statements and the Management’s Reports including the Nonfinancial Statements and discusses the quarterly statements and the half-year financial report 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, evaluates the quality of the audit, and establishes the conditions for the provision of the auditor’s nonaudit services; the chairman of the Audit Committee regularly discusses this with the auditor outside of meetings as well
• Deals with follow-up assessments of acquisition and investment projects
• 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

Financial experts

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.

Nomination Committee

Members

Dr. Jürgen Hambrecht (chairman), Prof. Dr. François Diederich (until May 3, 2019), Prof. Dr. Thomas Carell (since May 3, 2019), Dame Alison Carnwath DBE, Michael Diekmann (until May 3, 2019), Dr. Alexander C. Karp (since May 3, 2019), Franz Fehrenbach, Anke Schäferkordt

Duties

• 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

Strategy Committee

Members

Dr. Jürgen Hambrecht (chairman), Dame Alison Carnwath DBE, Michael Diekmann (until May 3, 2019), Franz Fehrenbach (since May 3, 2019), Waldemar Helber, Sinischa Horvat, Michael Vassiliadis

Duties

• 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 2019 business year, meetings were held as follows:

• The Supervisory Board met six times.
• The Personnel Committee met four times.
• The Audit Committee met five times.
• The Nomination Committee met once.
• The Strategy Committee met once.

With the exception of one meeting, at which one member was absent, all respective members attended all meetings of the Supervisory Board. With the exception of the meeting of the Nomination Committee, at which one member was absent, all respective members attended all meetings of the Supervisory Board’s committees.