Clariant is committed to international compliance standards, ensuring checks and balances between the Board and Management, as well as a sustainable approach to value creation.

1. Principles of Corporate Governance

The Group commits to Swiss and international standards of corporate governance by following the respective statutory provisions and the rules issued by the SIX Swiss Exchange, and by implementing the principles of the Swiss Code of Best Practices for Corporate Governance.

2. Organizational overview

Clariant is headquartered in Muttenz, Switzerland. While Clariant reports in the four Business Areas Care Chemicals (Business Unit Industrial & Consumer Specialties), Catalysis (Business Unit Catalysts), Natural Resources (Business Unit Oil & Mining Services, Business Unit Functional Minerals), and Plastics & Coatings (Business Unit Additives, Business Unit Masterbatches, Business Unit Pigments), the seven Business Units are the highest-level operating units within the Group.

The organizational structure Figure 001 is further comprised of nine Business Services, Group Technology & Innovation (GTI), Global Business Services, Regional Service Centers, and the Corporate Center, which centralizes key corporate functions. The Executive Committee is responsible for the management of the Group.

001 CLARIANT ORGANIZATIONAL STRUCTURE AS OF 31 DECEMBER 2018

3. The Board of Directors

The Board of Directors stands for election or re-election for one-year terms. The Chairman of the Board of Directors of Clariant Ltd, as well as the members of the Compensation Committee, are elected individually for a term of one year by the Annual General Meeting.

At the end of 2018, the Board of Directors of Clariant Ltd was comprised of 12 members: Hariolf Kottmann (Chairman), Dr. Khaled Homza A. Nahas (Vice-Chairman), Abdullah Mohammed Alissa, Günter von Au, Calum MacLean, Geoffery Merszei, Eveline Saupper, Carlo G. Soave, Peter Steiner, Claudia Suessmuth Dyckerhoff, Susanne Wamsler, and Konstantin Winterstein. All members of the Board of Directors (except for Hariolf Kottmann, who held the position of CEO until 15 October 2018) are considered to be independent in accordance with international best-practice standards.

Of the nine male and three female members of the Board of Directors, five have German citizenship, two Saudi Arabian, two British, one Swiss, one Canadian, and one US citizenship. Concerning education, Board members hold PhDs or other degrees in the following fields: four in economics, political economy, languages and economics, or law; three in chemistry; three in industrial engineering, production engineering, engineering management, mining and engineering, or engineering and economic systems; and two in business administration. With regard to age, one member of the Board is 50 years or younger, two are 51 – 55 years, four are 56 – 60 years, two are 61 – 65 years, and three are 65 – 70 years of age. Concerning the first year of election to the Board, two Board members were first elected in 2008, two in 2011, one in 2015, three in 2016, and four in 2018.

4. The Board of Directors’ responsibilities and committees

The Board of Directors is the ultimate decision-making authority for Clariant Ltd in all matters except those decisions reserved by law or the Articles of Association for the shareholders. The Board provides the strategic direction for the Group and reviews and further develops the company’s strategy annually during a two-day Board of Directors’ meeting.

Further duties of the Board include establishing a management and corporate culture that is appropriate for the company’s objectives and ensuring an internal control system and adequate risk and compliance management, particularly regarding financial, corporate governance and citizenship, personnel, and environmental protection matters.

»The Board of Directors has reviewed the 2018 Integrated Report and proposes its approval to the Annual General Meeting.«

Hariolf Kottmann Chairman of the Board of Directors

The members of the Board of Directors constitute the following committees: the Nomination Committee, whose duties include drawing up principles for the selection of candidates for election and re-election to the Board of Directors and the office of CEO, and preparing the corresponding recommendations; the Compensation Committee reviews and proposes to the Board of Directors Compensation and Benefits Policies and Programs, reviews performance criteria relevant to compensation and determines individual executive compensation, and benefits and the compensation paid to the Members of the Board of Directors, including the compensation of the Chairman and the CEO; the Audit Committee, whose duties include reviewing the activities of the external auditors, their collaboration with the internal auditors, and their organizational adequacy; and, until 31 December 2018, the Technology and Innovation Committee, which was discontinued as of 1 January 2019. Instead, reports on innovation performance will be directly presented to the Board of Directors on a regular basis.

5. Management of the Group

The Board of Directors has delegated the executive management of the Clariant Group to the CEO and the other members of the Executive Committee. The members of the Executive Committee are appointed by the Board of Directors on the recommendation of the Nomination Committee.

At the end of 2018, the Executive Committee consisted of CEO Ernesto Occhiello, CFO Patrick Jany, Hans Bohnen, and Christian Kohlpaintner.

Of the four male members of the Executive Committee, three have German citizenship and one is an Italian citizen. Concerning education, Executive Committee members hold PhDs or other degrees in the following fields: two in Chemistry, one in Business Administration, and one in Chemistry and Business Administration. With regard to age, one member of the Executive Committee is 50 years or younger, two are 51 – 55 years, and one is 56 – 60 years. The first year of membership in the Executive Committee was 2006 for one member, 2009 for another, and 2018 for two members.

The Executive Committee is primarily responsible for implementing and monitoring the Group strategy, the financial and operational management of the Group, and the efficiency of the Group’s structure and organization.

6. Enterprise risk management

Under the Enterprise Risk Management Policy, based on the standard of »The Institute of Risk Management«, each year a tool is used to prepare risk assessments by Business Units, Service Units, and Regions to assess threats that could impact the achievement of Clariant’s objectives. These objectives stem from the overall strategy of the Group as set by the Board of Directors and implemented by the Executive Committee. The Executive Committee is responsible for monitoring the risk assessments for relevance and consistency.

A consolidated risk assessment is submitted annually to the Executive Committee, Audit Committee, and Board of Directors for review. In the case of new or changed risks, reporting is accelerated. To support functional responsibility, certain functions have access to risk assessments to assist them in their roles. Examples of such functions are Environmental Safety & Health Affairs (ESHA), to identify key sites for their property risk survey program, Corporate Auditing, and Group Procurement.

7. Significant shareholdings and shareholders’ participation rights

At 31 December 2018, the following shareholders held 3% or more of voting rights in Clariant Ltd: SABIC International Holdings B.V., 25.67%, Blue Beteiligungsgesellschaft mbH, 3.49%, APG Asset Management N.V., 5.01%.

Subject to certain limitations on voting by nominees, each registered share entitles the holder to one vote at the Annual General Meeting. Shareholders have the right to receive dividends and such other rights as are granted by the Swiss Code of Obligations. However, only shareholders entered in the Clariant share register may exercise their voting rights.

Shareholders representing shares with a total par value of CHF 1 million have the right to submit written requests that an item be included on the agenda, at least 45 days prior to the 25th Annual General Meeting on 30 March 2020.