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. In accordance with the resolution of the Annual Shareholders’ Meeting on June 18, 2020, the period of appointment for newly elected members of the Supervisory Board was reduced from five to four years; and the Statutes were amended accordingly. This ensures that the maximum membership duration of 12 years up to which a Supervisory Board member can be classified as independent corresponds to a total of three election terms. In accordance with the German Corporate Governance Code (Code 2020), the Supervisory Board reduced the membership duration used as a basis for its independence rating from 15 to 12 years in December 2019.

The meetings of the Supervisory Board and its committees are called by their respective chairs 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 chair 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 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, as well as risk compliance management. The Supervisory Board has embedded the main reporting requirements in an information policy. The chair of the Supervisory Board is in regular contact with the Board of Executive Directors, especially with its chair, 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. Kurt Bock (chair, since June 18, 2020),* Dr. Jürgen Hambrecht (chair, until June 18, 2020),* Franz Fehrebach, 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 (chair),* 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 chair of the Audit Committee regularly discusses this with the auditor outside of meetings as well
• Deals with follow-up assessments of key acquisition and investment projects
• Is responsible for monitoring the internal process of identifying related party transactions and ensuring adherence to statutory approval and disclosure requirements; grants approval of related party transactions
• 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

Pursuant to the German Corporate Governance Code, Dame Alison Carnwath DBE, chair of the Audit Committee, has special knowledge of, and experience in, applying accounting and reporting standards and internal control methods and is familiar with the annual audit. A further financial expert on the Supervisory Board is the Vice Chair of the Supervisory Board, Franz Fehrenbach, who left the Audit Committee in February 2020, after 12 years of service.

Nomination Committee

Members

Dr. Kurt Bock (chair, since June 18, 2020),* Dr. Jürgen Hambrecht (chair, until June 18, 2020),* Prof. Dr. Thomas Carell,* Dame Alison Carnwath DBE,* Liming Chen (since December 17, 2020), * Dr. Alexander C. Karp (until July 22, 2020),* Franz Fehrenbach, Anke Schäferkordt*

Duties

• Identifies suitable individuals 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. Kurt Bock (chair, since June 18, 2020),* Dr. Jürgen Hambrecht (chair, until June 18, 2020),* Dame Alison Carnwath DBE,* Franz Fehrenbach, 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 2020 business year, meetings were held as follows:

• The Supervisory Board met seven times.
• The Personnel Committee met four times.
• The Audit Committee met six times.
• The Nomination Committee met twice.
• The Strategy Committee did not meet.

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 two meetings of the Nomination Committee, at each of which one member was absent, and one meeting of the Audit Committee, at which one member was absent, all respective members attended all meetings of the Supervisory Board’s committees.

The meetings of the Supervisory Board and its committees since the beginning of the coronavirus pandemic in 2020 have been held in accordance with appropriate safety measures and in compliance with restrictions on assembly and travel as per the applicable infection prevention laws. They took place as in-person meetings with the additional option of virtual attendance via electronic communication and as completely virtual meetings solely via electronic communication.