Role, composition and effectiveness Composition and effectiveness of the board of directors is fundamental to robust corporate governance practices and is of utmost importance to the long-term success of businesses, their investors and other stakeholders. The key responsibilities of the board include: setting and testing the strategy proposed by the executive and overseeing its execution, determining risk appetite for the business, ensuring independence and effectiveness of external audit, succession planning for both the executive and the board as a whole, and creating a culture that promotes desired behaviours and encourages employees to act with integrity. The term “board” in this document covers the unitary board, the two-tier board and the unitary board supported by an executive body whose members may or may not be members of the public company board. In companies with a two-tier board structure, the term “executive director” applies to Management Board members, and the term “non- executive director” applies to Supervisory Board members. The composition of a board of directors will vary based on the board structure and the legal and regulatory framework applicable to the company. A company’s ownership structure is another powerful factor that can shape the composition of its board. Notwithstanding these differences, our research and experience suggests that there are certain universal principles which help to create effective company boards that lead and contribute to long-term value creation for both the company’s investors and other key stakeholders. We therefore expect boards of all companies to: – Have a mix of competences, skills and experience that would enable effective supervision and advice to the management across all aspects of the company’s activities that are critical to the success of the business and its long-term sustainability. – Exhibit essential diversity attributes determined by key characteristics of the business, including its products and services, geography of operations, demographics of customer base and workforce, expectations of its key stakeholders, as well as existing and emerging areas of risk, technological developments and sustainability aspects. Boards should aim for a diversity of perspectives and experience, including professional experience, gender, ethnicity, as well as national, cultural and social background that would add value to board and management deliberations and decision-making. – Include an adequate number of high-quality independent directors with sufficient powers to protect the interests of unaffiliated investors and other stakeholders in situations where conflicts of interests might arise. – Ensure that board size, composition and processes are optimal for maximum board effectiveness, finding a balance between continuity and fresh perspectives and taking timely action to address emerging issues through board refreshment. – Ascertain that all board members have sufficient time and energy to fulfil their responsibilities towards the company, its investors and other stakeholders, both under normal circumstances and in extraordinary situations that may pose significant additional demands on directors’ time. – Establish accountability of all board members to shareholders through regular board elections and dialogue with investors, and ensure directors have direct exposure to other key stakeholders as appropriate. AllianzGI’s general expectations of board composition and practices are set out below. However, we understand that each company’s circumstances are unique and will be keen to learn how alternative governance structures and practices benefit their business, investors and other key stakeholders, and how potential governance risks are addressed. Size, independence and diversity AllianzGI believes that for maximum effectiveness a board should include between five and 15 directors and up to 20 directors for companies with codetermination structures. We Board of Directors Global Corporate Governance Guidelines 5