BASF Report 2021 Corporate Governance – Corporate Governance Report 166 with the additional option of virtual attendance via electronic – Members’ collective knowledge of the chemical sector and the – Availability: Each member of the Supervisory Board ensures that communication. related value chains they invest the time needed to properly perform their role as a For more information on the Supervisory Board’s activities and resolutions in the 2021 business year, – Appropriate knowledge within the body as a whole of finance, member of the Supervisory Board of BASF SE. The statutory see the Report of the Supervisory Board from page 177 onward accounting, financial reporting, law and compliance as well as limits on appointments to governing bodies and the recommen- For an overview of meeting attendance, see basf.com/supervisoryboard/meetings one independent member with accounting and auditing expertise dations of the German Corporate Governance Code must be The Rules of Procedure for the Supervisory Board and its committees can be found at (“financial expert”) within the meaning of section 100(5) of the complied with when accepting further appointments. basf.com/supervisoryboard German Stock Corporation Act (AktG) – At least one member with in-depth experience in innovation, – Age limit and period of membership: Persons who have Competence profile, diversity concept and objectives for the research & development and technology reached the age of 72 on the day of election by the Annual Share- composition of the Supervisory Board – At least one member with in-depth experience in digitalization, holders’ Meeting should generally not be nominated for election. information technology, business models and start-ups Membership on the Supervisory Board should generally not exceed One important concern of good corporate governance is to ensure – At least one member with in-depth experience in human resources, three regular statutory periods in office, which will correspond to that seats on the responsible corporate bodies, the Board of society, communications and the media 12 years in the future. Executive Directors and the Supervisory Board, are appropriately – Specialist knowledge and experience in sectors outside of the filled. On December 21, 2017, the Supervisory Board therefore chemical industry – Independence: To ensure the independent monitoring and con- agreed on objectives for the composition, the competence profile For more information on the Supervisory Board’s competence profile, see sultation of the Board of Executive Directors, the Supervisory and the diversity concept of the Supervisory Board in accordance basf.com/competence-profile/supervisoryboard Board should have an appropriate number of independent mem- with section 5.4.1 of the German Corporate Governance Code in bers on the board as a whole, and an appropriate number of the version dated February 7, 2017, and section 289f(2) no. 6 of the Diversity concept independent shareholder representatives. The Supervisory Board German Commercial Code (HGB). These were expanded on The Supervisory Board strives to achieve a reasonable level of diver- deems this to be the case if more than half of the shareholder December 19, 2019, in particular with respect to the criteria for sity with respect to character, gender, international representation, representatives and at least eight members of the Supervisory assessing independence, based on the new recommendations of professional background, specialist knowledge and experience as Board as a whole can be considered independent. The Supervi- the German Corporate Governance Code, which was revised and well as age distribution, and takes the following composition criteria sory Board’s assessment of independence is based on the criteria amended in 2019 (2020 Code). The guiding principle for the compo- into account: in the current version of the German Corporate Governance Code sition of the Supervisory Board is to ensure qualified supervision and (2020 Code). Among other things, this means that members of guidance for the Board of Executive Directors of BASF SE. For the – At least 30% women and 30% men the Supervisory Board are no longer considered independent if election of shareholder representatives to the Supervisory Board, – At least 30% of members have international experience based on they have been a member of the board for 12 years or longer. The individuals shall be nominated to the Annual Shareholders’ Meeting their background or professional experience Supervisory Board has additionally defined the following principles who can, based on their professional expertise and experience, – At least 50% of members have different educational backgrounds to clarify the meaning of independence: The independence of integrity, commitment, independence and character, successfully and professional experience employee representatives is not compromised by their role as an perform the work of a supervisory board member at an international – At least 30% under the age of 60 employee representative or employment by BASF SE or a Group chemical company. company. Prior membership of the Board of Executive Directors Further composition objectives of BASF SE does not preclude independence following the expiry Competence profile of the statutory cooling-off period of two years. Material trans- The following requirements and objectives are considered essential – Character and integrity: All members of the Supervisory Board actions between a Supervisory Board member or a related party to the composition of the Supervisory Board as a collective body: must be personally reliable and have the knowledge and experi- or undertaking of the Supervisory Board member on the one ence required to diligently and independently perform the work of hand, and BASF SE or a BASF Group company on the other, – Leadership experience in managing companies, associations and a supervisory board member. exclude a member of the Supervisory Board from being qualified networks as independent. A material transaction is defined as one or more