ALTANA

Corporate Governance

ALTANA considers good corporate governance a basis for sustainable success. Therefore, even as a company not listed on the stock exchange, ALTANA orients itself to the rules of the German Corporate Governance Code.

At least once a year, the Supervisory and Management Boards deal with the recommendations and suggestions of the German Corporate Governance Code and examine which of them ALTANA can follow even as a company not listed on the stock exchange and sensibly apply within the company given its shareholder structure.

ALTANA follows the vast majority of the applicable recommendations of the German Corporate Governance Code in the current version of May 5, 2015. This especially applies to the cooperation between the Management Board and the Supervisory Board, the cooperation between the Chairman of the Supervisory Board and the Supervisory Board plenum, dealing with conflicts of interest and the independence of the Supervisory Board members, the setting up and composition of the committees, as well as matters relating to the audit.

Management and Control

The Management Board of ALTANA AG consists of three members, who are appointed by the Supervisory Board for a period of three or five years. The selection criteria include experience, business competence, as well as expertise in ecology and social responsibility. Considerations regarding diversity also play a role. The Management Board members manage the Group independently and are solely committed to the interests of the company. Together with the presidents of the divisions and some heads of central functional areas, the Management Board forms the Executive Management Team. In regular meetings, this team discusses and analyzes the development of business, important business incidents, as well as plans for the Group’s future development including sustainability issues.

The company’s Supervisory Board has twelve members. Half of them are employee representatives, elected by Group employees in Germany in accordance with the German Codetermination Act. The remaining six members are elected by the Annual General Meeting. Experience and expertise, as well as independence, are also important criteria in the selection of the members of the Supervisory Board. They are elected for a period of five years. The Management Board reports to the Supervisory Board regularly, without delay, and comprehensively on all issues relevant for the company regarding business development, risks, conflicts of interest, and planning, and discusses ALTANA’s strategy with the Supervisory Board. Sustainability issues are also discussed regularly at the Supervisory Board meetings. The Supervisory Board monitors and advises the Management Board in its management activities. The Supervisory Board’s tasks also include approving the annual financial statements. Specially defined business decisions of the company, such as major acquisitions and divestments, require the approval of the Supervisory Board, in accordance with a list of transactions that are subject to authorization.

The Supervisory Board formed an Audit Committee, a Human Resources Committee, and a Mediation Committee, legally required in accordance with section 27 (3) of the German Codetermination Act. Each committee consists of two shareholder representatives and two employee representatives. The Chairman of the Human Resources Committee and the Mediation Committee is the Chairman of the Supervisory Board, Dr. Klaus-Jürgen Schmieder. The Chairman of the Audit Committee is Dr. Lothar Steinebach. He has the necessary knowledge and expertise in the fields of accounting and auditing in accordance with the German Stock Corporation Act.

There is a D&O liability insurance scheme for members of the Management and Supervisory Boards. The insurance covers personal liability risks in the event that a claim is made against members of the Management and Supervisory Boards while they are performing their activities. The insurance contract stipulates a deductible of 10 % of the damages, but a maximum of one-and-a-half times the amount of the fixed annual compensation of the respective member of the Management or Supervisory Board per insurance year. Further information on the compensation of the Management and Supervisory Boards can be found on pages of the Consolidated Financial Statements.

Compliance

The trust of our business partners and customers, as well as the public, in the lawful and responsible behavior of the ALTANA Group and its employees is decisive for the success and reputation of the company. Compliance therefore is very important for ALTANA.

ALTANA’s Code of Conduct, which holds for the entire company, contains binding rules regarding responsible, ethical, and lawful behavior for all staff members. This applies in particular to issues such as antitrust law, environmental protection, safety, corruption, and discrimination. Together with the company’s Guiding Principles, the Code of Conduct provides orientation for responsible corporate action. The Code of Conduct and the Guiding Principles are published on our website (www.altana.com). Since 2010, ALTANA’s employees have been trained with the help of an e-learning program regarding the content of the Code of Conduct and further issues relevant to compliance such as corruption and bribery, as well as competition law issues. In 2016, 439 staff members worldwide took part in such training programs.

The Compliance Management System aims to help ensure compliance within the Group. In keeping with ALTANA’s structure, it is decentralized. ALTANA has established a Compliance Committee with people responsible for the different compliance areas that provides a framework, makes competencies available, and creates forums and platforms for local managers responsible. It also calls for concrete measures to be taken to ensure compliance and establishes minimum standards. The Compliance Management System includes the ALTANA Compliance Hotline that gives employees the opportunity to report illegal behavior, if need be, anonymously and regardless of levels of hierarchy. The Internal Audit department is also part of the Compliance Management System. In 2016, specially developed compliance tests were carried out for the first time.

ALTANA joined the U.N. Global Compact initiative, whose members are voluntarily committed in their corporate policy to adhering to social and environmental standards as well as the protection of human rights. By joining Global Compact, ALTANA has not only acknowledged its principles but also shown a general commitment to support and promote overall U.N. aims.