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. The Group’s continuing operations comprise five Business Units (Additives, Catalysts, Functional Minerals, Industrial & Consumer Specialties, and Oil and Mining Services), which are reported in the three Business Areas Care Chemicals, Catalysis, and Natural Resources. The Business Units Masterbatches (sold effective 1 July 2020) and Pigments (held for sale) have been reclassified as discontinued operations.

The organizational structure is further comprised of six Business Services, two core transformational Service Units (Group Innovation & Sustainability and Group Operational Excellence), and the Corporate Center, which centralizes key corporate functions. The responsibilities of the Executive Committee include the financial and operational management of the Group. SEE FIGURE 001

001 CLARIANT ORGANIZATIONAL STRUCTURE AS OF 1 JANUARY 2021

¹ In 2019, Clariant decided to dispose of the Business Units Masterbatches and Pigments. The two Business Units concerned have been reclassified as discontinued operations. In 2020, Clariant successfully completed the sale of its Masterbatches business and launched the divestment process of Business Unit Pigments.

3. Board of Directors

The members of the Board of Directors of Clariant Ltd, the Chairman of the Board of Directors, 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 2020, the Board of Directors of Clariant Ltd comprised twelve members: Hariolf Kottmann (Chairman and, from 24 July 2019 to 31 December 2020, Executive Chairman ad interim), Abdullah Mohammed Alissa (Vice-Chairman), Nader Ibrahim Alwehibi, Günter von Au, Calum MacLean, Thilo Mannhardt, Geoffery Merszei, Eveline Saupper (independent Lead Director from 24 July 2019 to 31 December 2020), 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 and who served as Executive Chairman ad interim from 24 July 2019 until 31 December 2020, are considered to be independent in accordance with best-practice standards.

Of the nine male and three female members of the Board of Directors, six have German citizenship, two Saudi Arabian, one British, one Swiss, one Canadian and Swiss, and one US citizenship. Concerning education, Board members hold PhDs or other degrees in the following fields: three in chemistry; one in industrial engineering and engineering management; two in production engineering or aeronautical and space engineering combined with business administration; two in business administration; three in economics, political economy, or law; and one in social protection policy and insurance. With regard to age, one member of the Board is 50 years or younger, two are 51–55 years, two are 56–60 years, four are 61–65 years, and three are 66–70 years of age. Concerning the first year of election to the Board, one Board member was first elected in 2008, two in 2011, one in 2015, three in 2016, three in 2018, and two in 2020.

»The Board of Directors has reviewed the 2020 Integrated Report and proposes its approval to the Annual General Meeting.«

Hariolf Kottmann Chairman of the Board of Directors

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 also provides the strategic direction for the Group, reviewing and further developing the company’s strategy once a year.

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

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 reelection to the Board of Directors, the CEO, and the other members of the Executive Committee, and preparing the corresponding recommendations; the Compensation Committee, which reviews and proposes to the Board of Directors the compensation and benefits policies and programs, reviews the performance criteria relevant to compensation, and determines individual executive compensation and benefits of the members of the Board of Directors and the Executive Committee, subject to the approvals of the total compensations by the Annual General Meeting; and the Audit Committee, whose duties include reviewing the activities of the external auditors, their collaboration with the internal auditors, and their organizational adequacy. Furthermore, the Audit Committee reviews the company’s internal control and risk management systems and reviews compliance with the law and internal regulations, particularly regarding the Code of Conduct.

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 2020, in addition to Hariolf Kottmann, who acted as Executive Chairman ad interim until Conrad Keijzer became the new Chief Executive Officer on 1 January 2021, the Executive Committee consisted of Chief Financial Officer Stephan Lynen, Chief Operating Officer Hans Bohnen, and Chief Transformation Officer Bernd Hoegemann.

Not counting Hariolf Kottmann, whose background is already included in the summary of the composition of the Board of Directors, the other three male members of the Executive Committee have German citizenship. Concerning education, Executive Committee members hold PhDs or other degrees in the following fields: one in chemistry and business administration; and two in economics and finance or economics and psychology combined with business administration. With regard to age, two of the members are 50 years or younger, and one is 51–55 years. The first year of membership in the Executive Committee was 2019 for two members and 2020 for one member.

The Executive Committee is primarily responsible for the implementation and monitoring of 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

Within the framework of the Enterprise Risk Management Policy, risk assessments are prepared by Business Units, Service Units, Corporate Functions, and Regions to assess threats that will impact the achievement of Clariant’s objectives. These objectives are a result of 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.

The Executive Committee has formed an »Ethics and Risk Management« subcommittee, which maintains an up-to-date understanding of areas where Clariant is, or may be, exposed to risk issues and seeks to ensure that management is effectively addressing those issues. The Ethics and Risk Management Committee meets on a quarterly basis. A summary 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, and Group Procurement, to ensure reliable and compliant supply of raw materials.

7. Significant shareholdings and shareholders’ participation rights

As of 31 December 2020, the following shareholders held 3% or more of voting rights in Clariant Ltd: SABIC International Holdings B.V., 32.22%¹; APG Asset Management N.V., 5.01%; BlackRock Inc., 3.8%, Blue Beteiligungsgesellschaft mbH and Maple Beteiligungsgesellschaft mbH, 3.49%.

Subject to certain limitations on voting by nominees, each registered share entitles the holder to one vote at the shareholders’ meetings. 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 27th Annual General Meeting on 1 April 2022.