appointment of a combined Chairperson/CEO where: – The combination of the roles is temporary and covers a restructuring or a transition period of no longer than three years; or – The board meets AllianzGI’s independence criteria, has a Senior/ Lead Independent Director appointed to counterbalance the concentration of power at the top, and there are no major concerns over governance practices at the company. AllianzGI has a strong preference for an independent non-executive Chairperson of the board. However, we may support the election of a non- independent Chairperson if his/her election is well justified and deemed to be in the interests of the company and its investors, and provided the board has an appropriate balance of independence. AllianzGI expects a Senior/Lead Independent Director to be appointed in such circumstances. AllianzGI values the role of a Senior/ Lead Independent director and recommends that all companies create this role. A Senior/Lead Independent Director is important for investors as he/she is expected to be a strong independent voice on the board, able to advise and challenge the Chairperson. This is why any candidate for this role should be unquestionably independent. A Senior/Lead Independent Director should support the Chairperson, ensure appropriate checks and balances on the board where the Chairperson is not independent, implement an orderly succession plan for the Chairperson, and act as a point of contact for investors, non-executive directors and senior executives where normal channels of communication through the Chairperson are considered inappropriate. AllianzGI does not approve of a former CEO being appointed as Chairperson of the board as this can affect the balance of authority and responsibility between the board and management. Exceptionally, we may support such an appointment in some circumstances, including the following: – The arrangement is temporary to cover a specified restructuring or transition/ succession period of no longer than three years; – After a cooling-off period of ≥ five years and provided there is an appropriate balance of independence on the board; – The Chairperson to be is a founder and/or a major shareholder with a significant influence over the company; or – There is a convincing rationale provided by the company (eg, strong need for specific expertise and skills that are difficult to find outside the company). In all instances, we will be looking at the quality and independence of the board to ensure appropriate checks and balances are in place and the interests of minority shareholders are protected. Considerations when voting on director election AllianzGI cannot make an informed decision in the absence of sufficient information on nominees at the time of voting. Hence, we expect all companies to disclose: the names, core competencies and qualifications of the candidates, diversity characteristics and skills the candidates bring to the board, as well as professional and other background, recent and current board and management mandates at other public and private companies, factors affecting independence, and attendance at board and committee meetings. AllianzGI expects directors to attend all board and committee meetings held during the year. We expect disclosure of individual directors’ attendance in the annual report. The company must explain all instances of nonattendance. We will not consider “other professional or personal commitments” as an appropriate justification for a director’s non- attendance except in the first year following the appointment. AllianzGI expects executive and non- executive directors to have sufficient capacity and energy to discharge their board and committee responsibilities both under normal circumstances and when special situations or unexpected developments require substantial additional time commitment. Over- commitment by directors is a serious concern for investors as it can compromise the quality of boards and, where directors hold full-time executive positions, their executive responsibilities. While each director’s circumstances will be different, we will question all instances where: – A non-executive director has more than six non-executive roles in public or private companies 2 . We expect the total number of board mandates to be even smaller where directors have board committee responsibilities or other significant external commitments; – A non-executive Chairperson has more than one additional non- executive chairmanship, or more than three additional non-executive directorships in public or private companies; – A full-time executive director, including an Executive Chairperson, has more than one non-executive role in a private or public company. AllianzGI believes that in companies with a dual board structure, the Supervisory Board should comprise no more than one former executive to maintain a proper balance of authority and responsibility between executive and supervisory bodies and to encourage independence and fresh perspectives on the board. AllianzGI does not approve of age or tenure limits for directors, as our preference is for boards with a good balance of continuity and fresh perspectives. However, where limits have to be set, we prefer to see these expressed as a maximum number of terms that directors can serve rather than the age of individual board members. In companies and markets where board tenure is not seen as a factor affecting directors’ independence, we will normally vote Global Corporate Governance Guidelines 7