Ex executive board R. STAHL

How the Executive Board and
Supervisory Board operate

Composition and working methods of Executive Board and Supervisory Board

R. STAHL AG is subject to the provisions of German stock corporation and Co-Determination Act and the capital market regulations as well as the provisions of the Articles of Association and the Rules of Procedure for the Executive Board and Supervisory Board. In Germany, the dual management system is prescribed by law for stock corporations. The members of the Executive Board are jointly responsible for the management of the company. The Supervisory Board acts as a monitoring and advisory body. The two bodies work closely together in the interests of the company, with the aim of ensuring its continued existence and sustainable value creation. They are committed to the interests of the shareholders and the welfare of the company.

The Executive Board manages the company on its own responsibility and conducts the business. It defines the strategic direction of the company, agrees it with the Supervisory Board and implements it in a targeted manner. In doing so, the Executive Board includes the interests of the shareholders, its employees and other stakeholders in its decisions.

The Supervisory Board has issued a catalogue of transactions requiring approval for the Executive Board (in addition to § 7 para. 1 of the Articles of Association). Insofar as certain transactions require the approval of the Supervisory Board, such approval shall be obtained.

The Executive Board of R. STAHL AG consists of Dr Mathias Hallmann. 

The Executive Board informs the Supervisory Board regularly and promptly about current business developments, the asset, financial and earnings situation as well as the risk situation and compliance in the Group. In addition, the Executive Board reports comprehensively to the Supervisory Board on fundamental aspects of strategy and corporate planning. 

The Chairman of the Supervisory Board decides whether the Executive Board shall attend the meetings of the Supervisory Board. If the auditor is invited to attend the meetings as an expert, the Supervisory Board shall decide on this. Each meeting of the Supervisory Board provides for a part in which topics are discussed without the presence of the Executive Board. In 2023, the Executive Board in its respective composition attended five regular meetings of the Supervisory Board. The Executive Board reported in writing and by word of mouth on the individual agenda items and draft resolutions and answered questions from the Supervisory Board members. 

R. STAHL AG's Supervisory Board is formed in accordance with Germany's One-Third Participation Act (DrittelbG) and consists of nine members: Three members are employee representatives, and the other six are shareholder representatives Three of the six members of the capital side are from the founding families. In the opinion of the Supervisory Board, more than half of these members should be independent within the meaning of the recommendations under Chapter C. of the German Corporate Governance Code as amended on 28 April 2022, i.e. at least four members. According to the recommendations in C. 6 and C. 7 (independence from the company and the Management Board), the indicators listed in C. 7 and the recommendations in C. 9 as well as the explanatory memorandum of the Code on C. 6 (independence from a controlling shareholder), all shareholder representatives are currently independent in the opinion of the Supervisory Board. It is true that in 2021, the Chairman of the Supervisory Board, Peter Leischner, has been a member of the Board for more than 12 years, so that one of the Code's indicators against the independence of the Executive Board and the company is present. Nevertheless, the Supervisory Board considers Peter Leischner to be independent and justifies this as follows in accordance with recommendation C.8 of the Code: Peter Leischner's shareholding in the company is relatively small, he has never been an employee or member of the Executive Board and has no significant business relationship with R. STAHL AG. Above all, however, in the opinion of the other shareholder representatives, Peter Leischner's contributions and the positions he has expressed in the course of his entire Supervisory Board activities demonstrate his independent position towards the company.

R. STAHL's international customer orientation is also reflected in the Supervisory Board, which includes several members with experience abroad. The proportion of women is 22.22 %.

There are no conflicts of interest among the current members of the Supervisory Board; in the case of new candidates, careful checks are carried out in advance to establish whether there are any conflicts of interest. On December 31, 2023, members of the Supervisory Board held 2.15 % of the voting capital. Regarding the remuneration of the Supervisory Board, reference is made to the system of remuneration of the Supervisory Board approved by the 29th Annual General Meeting on 13 July 2022 with a majority of 82.98 % (available here). The actual remuneration is broken down and presented individually in the remuneration report. 

The Supervisory Board of R. STAHL AG has the task of appointing the Executive Board of the company, supervising it in the management of the business and assisting it in an advisory capacity.

The Supervisory Board meets at least five times a year to discuss the issues under discussion and to pass the necessary resolutions, usually on the basis of reports submitted by the Executive Board and documents received in advance to prepare for the meeting. If necessary, the Supervisory Board convenes for additional or extraordinary meetings. In 2023, the Board held five ordinary meetings and one constituent extraordinary meeting. The possibility of adopting resolutions by written circular is used relatively rarely and only in cases that are particularly urgent. Minutes of the meetings are prepared and distributed to all members of the Supervisory Board as well as to the Executive Board of the company (only insofar as it participated). Resolutions passed by circular letter are documented in the form of minutes of the adoption of the resolutions. In addition, there are information meetings without a formal session character, if required. 

In addition to the constant discussion of strategic issues, the Supervisory Board decides on the adoption of the annual financial statements and examines the planning for the next three years submitted to it by the Executive Board. Furthermore, the Supervisory Board deals with the analysis of the operational development of the R. STAHL Group as well as with questions of risk management and compliance. 
In personal meetings as well as through verbal or written statements, the Executive Board regularly informs the Chairman of the Supervisory Board about the development of the company and discusses current issues with him. Where necessary, the Chairman of the Supervisory Board reports on the topics discussed between the Executive Board and him at the meetings of the Board.

Each year, the Chairman of the Supervisory Board describes the activities of the Supervisory Board and its committees in his report to the shareholders, which is printed in the Annual Report. It is also available at the Annual General Meeting and will be read out on request.
In the 2023 reporting year, the Supervisory Board again followed the recommendations of the GCGC and complied with them to the extent that seems appropriate for a company of the size of R. STAHL AG in terms of good corporate governance. The updated Declaration of Conformity issued in December 2023 is available to shareholders on R. STAHL AG's website and in the Annual Report.

The Supervisory Board conducts an annual self-assessment (formerly "efficiency review") with the help of a continuously developed questionnaire. The questionnaire covers all areas of the Board's work, such as the supply of information, the culture of discussion and the cooperation among each other. The evaluation is anonymous. The results are submitted to the Chairman of the Supervisory Board who presents them in detail to the entire Board for discussion at the following meeting. Joint findings are implemented (information in accordance with D.12 GCGC 2022).

The Supervisory Board has formed two committees: the Audit Committee and the Administration Committee. 

Following the reconstitution, the Audit Committee continues to consist of the Chairwoman 
Dr Renate Neumann-Schäfer, her deputy Peter Leischner, Andreas Müller and Nikolaus Simeonidis. Dr Renate Neumann-Schäfer has special knowledge and experience in the application of accounting principles and internal control and risk management systems, including sustainability reporting and its audit. Peter Leischner has particular expertise in risk management and treasury, coupled with experience in auditing financial statements, sustainability reporting and its audit. Andreas Müller has special knowledge in controlling and auditing financial statements, including sustainability reporting and its audit. Nikolaus Simeonidis has special expertise in sustainability reporting, including its audits, and has experience in auditing financial statements (disclosures in accordance with D2. and D. 3 GCGC 2022). According to the Rules of Procedure, the Audit Committee is mandated and authorised to deal in particular with issues of accounting, risk management and compliance, the tendering of the audit mandate, the required independence of the auditor, the issuing of the audit mandate to the auditor, the determination of audit focal points and the fee agreement. It prepares decisions of the Supervisory Board in this regard and makes recommendations for the resolutions. It discusses half-yearly and any quarterly reports with the Executive Board prior to their publication. The committee regularly deals with the quality of the audit of the financial statements and is ultimately responsible, on behalf of the entire Board, for approving the commissioning of consultancy services of the auditor elected by the Annual General Meeting (Executive Board transaction requiring approval). The meetings of the Audit Committee are chaired by the Chairwoman. In the event of a tie vote, the Chairwoman has an additional vote. The Audit Committee held three meetings in 2023. 

Since the 2023 Annual General Meeting, the Administrative Committee has consisted of the Chairman Peter Leischner, his deputy Prof Dr Peter Hofmann, Klaus Erker and Harald Rönn. In accordance with the Rules of Procedure, the Administrative Committee makes recommendations to the full Supervisory Board on the appointment, reappointment and dismissal of members of the Executive Board and the CEO, taking into account diversity. Furthermore, the committee prepares decisions of the Supervisory Board on the remuneration system for the Executive Board and submits corresponding resolution proposals also for an appropriate total remuneration of the individual Executive Board members. The committee negotiates and decides on the service contract and other contractual matters of the Executive Board, taking into account the decisions of the full Supervisory Board, and concludes contracts with the Executive Board members on behalf of the Supervisory Board. At least once a year, the committee discusses long-term succession planning together with the Executive Board and submits a proposal to the Supervisory Board for the relevant wording in the corporate governance statement. Finally, the Administrative Committee is responsible on behalf of the entire body for approving the conclusion of transactions with members of the Executive Board and Supervisory Board as well as with their related parties, insofar as the value exceeds € 5,000.00 in an individual case (transaction of the Executive Board requiring approval). The meetings of the Administrative Committee are chaired by its Chairman. In the event of a tie vote, the Chairman has an additional vote. The Administrative Committee held three meetings in 2023 and also met several times outside of meetings or discussed matters by telephone in the course of dealing with Executive Board matters.