Description of the working methods of the Management Board and Supervisory Board as well as the composition and working methods of their committees

NORMA Group SE follows the dual management system. The Management and Supervisory Boards are separate bodies that have different functions and powers. The Management Board manages the company under its own responsibility. The Supervisory Board appoints, advises, monitors and dismisses members of the Management Board.

The Management Board provides the Supervisory Board with regular updates about its business policies, how the business is developing, the position of the company and any transactions that could have a significant impact on profitability or liquidity. The Management Board reports the key figures of the Group and the current course of business to the Supervisory Board on a monthly basis, in particular with regard to the published guidance on the expected development of the company. Based on the written documents that were submitted to the Supervisory Board in advance, the members of the Management Board report in great detail on business developments and provide an outlook on the expected development of NORMA Group at the Supervisory Board meetings. In addition to the monthly and quarterly figures, other standard subject matters at all meetings include risk analysis and measures to minimize identified risks, reports from the chairpersons of the Audit Committee, General and Nomination Committee and Strategy Committee on previous meetings and strategic projects. Further details on the matters addressed by the Supervisory Board in 2023 can be found in the Supervisory Board report. All Management Board members participate in the Supervisory Board meetings. The Supervisory Board typically convenes separately before or after meeting with the Management Board.

The Chairmen of the Supervisory Board and the Management Board coordinate the collaboration of the two boards. They also maintain regular contact between Supervisory Board meetings, typically on a fortnightly basis, and discuss current corporate governance issues. The Chairman of the Audit Committee and the CFO also consult with each other.

In accordance with the legal requirements, the bylaws of the Management Board and NORMA Group SE’s Articles of Association, the Supervisory Board must approve certain important transactions before they can be executed by the Management Board and the company’s employees. This applies not only for measures at NORMA Group SE, but also for measures at its subsidiaries. In order to ensure that the Management Board is promptly informed of corresponding matters involving subsidiaries, so that it can request the approval of the Supervisory Board, a hierarchical system of approval requirements applies worldwide at NORMA Group.

 

Management Board and regional management

In fiscal year 2023, the following changes were made to the Management Board of NORMA Group SE: Following the departure of Dr. Michael Schneider at the end of 2022, Miguel Ángel López Borrego, a member of the Supervisory Board, initially took over the position of CEO on an interim basis from the beginning of January until the end of May 2023 until a permanent replacement was appointed. His function as a member of the Supervisory Board was suspended during this period. Further details on this transition phase can be found in the report of the Supervisory Board SUPERVISORY BOARD REPORT. Effective June 1, 2023, Guido Grandi joined the Management Board of NORMA Group and took over as Chairman of the Management Board. Dr. Daniel Heymann had already joined NORMA Group’s Management Board as COO on May 1, 2023, taking over from Dr. Friedrich Klein.

As a result, the Management Board of NORMA Group SE had the following three members at the end of financial year 2023: Guido Grandi (CEO), Dr. Daniel Heymann (COO) and Annette Stieve (CFO).

The resumes of the three Management Board members are posted on the company’s website.  WWW.NORMAGROUP.COM

Resolutions of the Management Board are passed by simple majority. The Chairman has the deciding vote if the vote is tied. However, the members of the Management Board are required to make an effort to reach unanimous decisions. If a member of the Management Board cannot participate in a vote, their vote/opinion will be obtained at a later date. The entire Management Board is responsible for matters of particular importance. In accordance with the Management Board by laws, these include the following areas: producing the Management Board reports for the purpose of informing the Supervisory Board and the quarterly and half-yearly reports, fundamental organizational measures, including the acquisition or disposal of significant parts of companies and strategic and business planning issues, measures related to the implementation and supervision of a monitoring system pursuant to Section 91 (2) of the German Stock Corporation Act, issuing the Declaration of Conformity pursuant to Section 161 (1) of the German Stock Corporation Act, preparing the Consolidated and Annual Financial Statements and similar reports, convening the Annual General Meeting and inquiries and recommendations by the Management Board that are to be handled and resolved by the Annual General Meeting. In addition, every Management Board member may request that a specific issue be dealt with by the entire Management Board.

Management Board meetings are usually held at least once a month. In addition, the Management Board meets at short notice if required. The Management Board has not formed any committees.

Every Management Board member is obliged to inform the Supervisory Board immediately, as well as the other members of the Management Board, of any conflicts of interest. No such conflicts of interest arose for a Management Board member in 2023.

The Supervisory Board must approve any transactions between NORMA Group companies on the one hand and a member of the Management Board, related parties or businesses on the other hand. No such transactions were concluded in 2023.

The Supervisory Board must also approve any ancillary activities by a member of the Management Board. Details concerning ancillary activities can be found on the company’s website. WWW.NORMAGROUP.COM

The remuneration of the Management Board is detailed in the REMUNERATION REPORT.

As part of its long-term succession planning, the Supervisory Board has developed candidate profiles for all three positions on the Management Board together with external consultants since 2018 on the occasion of the search for new members. The Supervisory Board’s Rules of Procedure also stipulate that the Supervisory Board shall take diversity into account in the composition of the Management Board.

The Management Board conducts annual talent reviews in the regions and at Group level, during which measures for the development of managers are defined, and reports to the Supervisory Board on the results of these analyses and possible candidates for succession to the Management Board.

The age limit for members of the Management Board has been set at 65 in the Rules of Procedure for the Supervisory Board. No member of the Management Board currently reaches this age limit; this is also not foreseeable during the term of the current contracts.  WWW.NORMAGROUP.COM

Regional Presidents represent the Group locally in the three regions EMEA, Americas and Asia-Pacific. The Presidents are each responsible for one of the strategic business units that are currently being established. Regional headquarters are located in Singapore for the Asia-Pacific region, Auburn Hills, USA, for the Americas region and Maintal, Germany, for the EMEA region. The managers at NORMA Group SE work in a matrix structure in which they have both a disciplinary as well as a technical superior.

Information on the internal control system can be found in the RISK AND OPPORTUNITY REPORT.