Working Practices of the Management Board and Supervisory Board
To ensure good corporate governance, a guiding principle of the cooperation between the Management Board and Supervisory Board at MorphoSys AG is the open, comprehensive and regular communication of information. The dual board system prescribed by the German Stock Corporation Act clearly differentiates between a company’s management and supervision. The responsibility of both Boards is clearly stipulated by the legislator and the Boards’ bylaws and Articles of Association. The stated objective of MorphoSys AG’s Management Board and Supervisory Board is to sustainably increase Company value. The Boards work closely together to make decisions and take actions for the Company’s benefit.
Management Board members have their own area of responsibility defined in the schedule of responsibilities and regularly report to their Management Board colleagues. Cooperation among Management Board members is governed by the bylaws. The Supervisory Board ratifies both the schedule of responsibilities and the bylaws. Management Board meetings are typically held weekly and chaired by the Chief Executive Officer. During these meetings, resolutions are passed concerning dealings and transactions that, under the bylaws, require the approval of the entire Management Board. At least half of the Management Board’s members must be present to pass a resolution. Management Board resolutions are passed by a simple majority and, in the event of a tied vote, the Chief Executive Officer’s vote decides. For material events, each Management Board or Supervisory Board member can call an extraordinary meeting of the entire Management Board. Management Board resolutions can also be passed outside of meetings by an agreement made orally, y telephone or in writing (also by e-mail). A written protocol is completed for each meeting of the full Management Board and is submitted for approval to the full Management Board and for signature to the chief executive officer at the following meeting.
Management Board strategy workshops are also held in which the Group-wide strategic objectives are developed and prioritized.
The Management Board promptly and comprehensively informs the Supervisory Board in writing and at Supervisory Board meetings about planning, business development, the Group’s position, risk management and other compliance issues. Extraordinary meetings of the Supervisory Board are also called for material events. The Management Board involves the Supervisory Board in the strategy, planning and all fundamental Company issues. In addition to routine Supervisory Board meetings, a strategy meeting takes place between the Management Board and Supervisory Board once annually to discuss MorphoSys’s strategic direction. The Management Board’s bylaws specify that material business transactions require the approval of the Supervisory Board. Detailed information on the cooperation of the Management Board and Supervisory Board and important items of discussion during the 2015 financial year can be found in the Report of the Supervisory Board.
The Supervisory Board holds a minimum of two meetings per calendar half-year and at least six meetings per full calendar year. The Supervisory Board has supplemented the Articles of Association with rules of procedure that apply to its duties: The Chairperson of the supervisory Board coordinates the activities of the Supervisory Board, chairs the Supervisory Board meetings and represents the interests of the Supervisory Board externally. The Supervisory Board typically passes its resolutions in meetings, but resolutions may also be passed outside of meetings in writing (also by e-mail), by telephone or video conference.
The Supervisory Board has a quorum when at least two-thirds of its members (including either the Chairperson or Deputy Chairperson of the Supervisory Board) take part in the vote. Resolutions of the Supervisory Board are passed with a simple majority unless the law rescribes otherwise. In the event of a tied vote, the Chairperson of the Supervisory Board’s vote decides.
Protocols are completed for Supervisory Board meetings, and resolutions passed outside of meetings. A copy of the Supervisory Board’s protocol is made available to all Supervisory Board members. The Supervisory Board conducts an efficiency evaluation regularly in accordance with the recommendation in Item 5.6 of the Code.
Composition and Working Practices of the Management Board's and Supervisory Board's Committees
The Management Board has not formed any committees.
The Supervisory Board has three committees: the Audit Committee, the Remuneration and Nomination Committee, and the Science and Technology Committee. The members of the three committees formed by the Supervisory Board are professionally qualified..
The main task of the Audit Committee is to support the Supervisory Board in fulfilling its supervisory duties with respect to the accuracy of the annual and consolidated financial statements, the activities of the auditor and internal control functions, such as risk management, compliance and internal auditing. The Audit Committee submits a recommendation to the Supervisory Board for the election at the Annual General Meeting of an independent auditor. The members of the Audit Committee until May 8, 2015, were Dr. Daniel Camus (Chairman), Dr. Geoffrey Vernon and Karin Eastham, who all fulfill the prerequisite of being independent financial experts. The members of the Audit Committee as of May 8, 2015, were Klaus Kühn (Chairman), Karin Eastham and Wendy Johnson. Klaus Kühn and Karin Eastham fulfill the prerequisite of being independent financial experts.
Remuneration & Nomination Committee
The Remuneration and Nomination Committee is responsible for preparing and reviewing the Management Board’s compensation system annually before its final approval. When necessary, the Committee searches for suitable candidates to appoint to the Management Board and Supervisory Board and submits appointment proposals to the Supervisory Board. The Committee also prepares the contracts made with Management Board members. The members of the Remuneration and Nomination Committee are Dr. Gerald Möller (Chairman until May 8, 2015), Dr. Marc Cluzel and Ms. Karin Eastham (Chairperson as of May 8, 2015).
Science & Technology Committee
The Science and Technology Committee advises the Supervisory Board on matters concerning proprietary drug and technology development and prepares the relevant Supervisory Board resolutions. The members of the Science and Technology Committee until May 8, 2015 were Dr. Walter Blättler (Chairman) and Dr. Marc Cluzel. As of May 8, 2015, the members of the Science and Technology Committee are Dr. Marc Cluzel (Chairman), Dr. Frank Morich and Ms. Wendy Johnson.