Working Practices of the Management Board and Supervisory Board
To ensure good corporate governance, open and comprehensive information provided on a routine basis is a guiding principle of the cooperation of the Management Board and Supervisory Board of MorphoSys AG. The dual management system required by the German Stock Corporation Act clearly differentiates between the management and the supervision of a Company. The responsibilities of both Boards are clearly defined by the legislator and by the Boards’ bylaws and Articles of Association. MorphoSys AG’s Management and Supervisory Boards work closely together and take actions and decisions for the benefit of the Company. Their stated objective is to sustainably increase the Company’s value.
Each Management Board member has their own area of responsibility, which is defined in the schedule of responsibilities. Each member regularly reports to their Management Board colleagues on their respective area of responsibility. The collaboration of Management Board members is governed by the bylaws. Both the schedule of responsibilities and the bylaws were enacted by the Supervisory Board. Meetings of the Management Board typically take place once a week and are chaired by the Chief Executive Officer. At the meetings, resolutions related to actions and transactions are passed that require the approval of the entire Management Board under the rules of procedure. In order to pass resolutions, at least half of the members of the Management Board must participate in the vote. Resolutions of the Management Board are passed by a simple majority. In the event of a tied vote, the vote of the Chief Executive Officer decides. In the case of significant events, each member of the Management Board or the Supervisory Board may convene an extraordinary meeting of the Management Board as a whole. Resolutions of the Management Board may also be passed outside of its meetings by voting verbally, by telephone, or in writing (including email). A protocol is made of each meeting of the full Management Board. This protocol is then submitted for approval at the subsequent meeting of the full Management Board and signed by the Chief Executive Officer.
In addition to the regular Management Board meetings, Management Board strategy workshops are held. In this workshops, the Management Board prioritizes the strategic objectives across the Group and outlines the future strategy.
The Management Board informs the Supervisory Board with respect to planning, business development and the Group’s position, including risk management and compliance issues, in a timely and comprehensive manner in writing, as well as at the Supervisory Board meetings. An extraordinary meeting of the Supervisory Board shall be convened if necessary in the case of a material event. The Supervisory Board is involved by the Management Board in the strategy and planning, as well as in all decisions of fundamental importance to the Company. In addition to the regular Supervisory Board meetings, a further strategy meeting between the Management Board and the Supervisory Board is held once annually in which the focus of discussion is the strategic orientation of MorphoSys. According to the Management Board’s rules of procedure, important business transactions are subject to the consent of the Supervisory Board. Detailed information on the collaboration between the Management Board and the Supervisory Board and on important topics discussed in the 2014 financial year can be found in the “Report of the Supervisory Board.”
The Supervisory Board shall hold at least two meetings per calendar half-year and at least six per calendar year. In addition to the provisions of the Articles of Association, the Supervisory Board has added rules of procedure with regard to its duties: The Supervisory Board Chairman coordinates the work of the Supervisory Board, chairs its meetings and represents the affairs of the Board externally. The Supervisory Board usually makes its decisions in meetings. However, decisions can also be made by telephone, video conference, or outside of the meetings.
The Supervisory Board constitutes a quorum when at least two-thirds of its members (including either the Chairman or the Deputy Chairman of the Supervisory Board) participate in the vote. Generally, resolutions of the Supervisory Board are adopted by a simple majority of the votes cast unless the law prescribes a different majority. In the event of a tied vote, the vote of the Supervisory Board Chairman decides.
Supervisory Board meetings are recorded in writing. Resolutions which are taken outside of the meetings are also recorded. A copy of the minutes and the resolutions adopted outside of meetings is provided to all members of the Supervisory Board. In accordance with the recommendation in item no. 5.6 of the Code, the Supervisory Board evaluates the efficiency of its work on a regular basis.
Composition and Working Practices of the Management Board's and Supervisory Board's Committees
The Management Board has not established any committees.
The Supervisory Board has three committees: the Audit Committee, the Remuneration and Nomination Committee, and the Science and Technology Committee. The three committees formed by the Supervisory Board are occupied by professionally qualified members.
The central task of the Audit Committee is to assist the Supervisory Board in carrying out its supervisory duties with respect to the accuracy of the annual financial statements and the consolidated financial statements, the activities of the external auditors, the internal control functions, particularly risk management, compliance, and internal audit. In addition, the Audit Committee prepares the award of the audit mandate to the auditor. Members of the Audit Committee are Dr. Daniel Camus (Chairman), Ms. Karin Eastham, and Dr. Geoffrey Vernon. All three members are independent financial experts.
Remuneration & Nomination Committee
The Remuneration and Nomination Committee is responsible for the preparation and annual review of the Management Board’s compensation system before its final approval. In addition, the Committee monitors, when necessary, the search for suitable candidates for appointment as Management Board members or as Supervisory Board members and submits proposals to the Supervisory Board in this regard. The Committee also prepares contracts with Management Board members. The members of the Remuneration and Nomination Committee are Dr. Gerald Möller (Chairman), Dr. Marc Cluzel, and Ms. Karin Eastham.
Science & Technology Committee
The Science and Technology Committee advises the Supervisory Board on matters concerning proprietary drugs and technology development and also prepares the relevant Supervisory Board resolutions. The members of the Science and Technology Committee are Dr. Walter A. Blättler (Chairman), and Dr. Marc Cluzel.