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Management Board and Supervisory Board Procedures

Since the change of legal form of Fresenius SE into an SE & Co. KGaA, the responsibilities are distributed as follows: The Management Board of the general partner is responsible for conducting the business of Fresenius SE & Co. KGaA.

The Supervisory Board of Fresenius SE & Co. KGaA supervises the management of the Company’s business by the general partner.

General partner – Management and Supervisory Boards

The general partner Fresenius Management SE, represented by its Management Board, manages Fresenius SE & Co. KGaA at its own responsibility and conducts its business. The Management Board formulates the strategy, discusses it with the Supervisory Boards of Fresenius Management SE and of Fresenius SE & Co. KGaA, and oversees its implementation. Its actions and decisions are aligned with the best interests of Fresenius SE & Co. KGaA. The Management Board is committed to increasing the value of the Company on a sustainable basis. The rules of procedure for the Management Board were established by the Supervisory Board of Fresenius Management SE. They define the activities within the Board more specifically, especially with regard to the individual duties and responsibilities of the members, matters reserved for the full Management Board, and resolutions to be passed by the full Management Board. The meetings of the Management Board are convened as required, but at least once a month, and are chaired by the Chairman of the Management Board or, if he is incapacitated, by the Chief Financial Officer or, if he is also incapacitated, by the Management Board member present who is most senior in age. However, Management Board meetings are usually held twice a month. The person chairing the meeting decides the order in which the items on the agenda are dealt with and the form in which the voting is conducted. Except in cases where mandatory provisions of law or the Company’s articles of association require a unanimous vote or action by all the Management Board members, the Management Board passes its resolutions by a simple majority of the votes cast or, outside its meetings, by a simple majority of its members. The Chairman of the Management Board has the casting vote if a vote is tied. If the Chairman is incapacitated or absent, the motion is deemed rejected if a vote is tied. The rules of procedure for the Management Board also govern the relations between the Management Board and the Supervisory Board of the general partner as well as between the general partner and the Supervisory Board of Fresenius SE & Co. KGaA, and also matters that require approval of the general partner’s Supervisory Board.

The Management Board consists of seven members: the Chairman, the Chief Financial Officer, the Chief Legal and Compliance Officer and Labor Relations Director, as well as the chief executive officers of the four business segments. This ensures that the full Management Board is kept constantly informed about important events, plans, developments, and measures within the business segments. There are no Management Board committees owing to Fresenius SE & Co. KGaA’s role as an operating holding company. The Management Board is listed in the Annual Report. Its composition is identical to that of the former Management Board of Fresenius SE.

As a European company (SE – Societas Europaea), Fresenius Management SE has its own Supervisory Board. It consists of six members, and its Chairman is Dr. Gerd Krick. The Supervisory Board appoints the members of the Management Board and supervises and advises the Management Board by conducting the business of Fresenius SE & Co. KGaA. It established its rules of procedure following the recommendation in Clause 5.1.3 of the Code.

An overview of the Supervisory Board members of Fresenius Management SE can be found here.

The Supervisory Board of Fresenius SE & Co. KGaA

The Supervisory Board of Fresenius SE & Co. KGaA supervises the management of the Company’s business by the general partner. It supervises business operations to ensure that corporate decisions are compliant, suitable, and financially sound. The members of the Management Board of the general partner are appointed by the Supervisory Board of Fresenius Management SE, not by the Supervisory Board of the KGaA.

The Supervisory Board of Fresenius SE & Co. KGaA consists of twelve members. Half of its members are elected by the AGM. The proposals for the members of the Supervisory Board primarily take account of the knowledge, ability, and expert experience required to perform the tasks. The election proposal provided by the Supervisory Board will take into account the Company’s international activities, potential conflicts of interest, and diversity. This also includes the goal to establish long-term, appropriate female representation. It is not in the Company’s interest to generally limit the selection of qualified candidates. Therefore, the Supervisory Board makes a general declaration of intent and particularly refrains from fixed diversity quotas or an age limit. A Nomination Committee has been instituted for election proposals on the shareholders’side. Its activities are aligned with the provisions of law and the Corporate Governance Code. Due to the change of legal form, the term of office of the former Supervisory Board members ended on January 28, 2011, and the Supervisory Board had to be reconfigured. In light of status procedure conducted beforehand, the Supervisory Board of Fresenius SE & Co. KGaA consists, as before, of an equal number of six shareholder representatives and six employee representatives. The legal provisions governing the employee co-determination in case of cross-border mergers (MgVG) were applied. The six shareholder representatives on the Supervisory Board of Fresenius SE & Co. KGaA were elected at the AGM on May 12, 2010. The six employee representatives were appointed provisionally by court order of the District Court in Bad Homburg v. d. H. on January 31, 2011. As part of the change in legal form of Fresenius SE into an SE & Co. KGaA, a European works council was formed instead of the SE works council. In the constitutive meeting of the European works council on May 5, 2011, the current employee representatives were elected to the Supervisory Board of Fresenius SE & Co. KGaA.

The Supervisory Board includes an, in its opinion, sufficient number of independent members who have no business or personal relations with the Company or the Management Board that could cause a conflict of interest. The articles of association of Fresenius SE & Co. KGaA regulate the details with regard to the Supervisory Board’s election, constitution, term of office, meetings and resolutions, and rights and duties. They are published on our website at www.fresenius.com, see Who we are − Corporate Governance, where they can be downloaded.

The Supervisory Board of Fresenius SE & Co. KGaA has established its rules of procedure in accordance with clause 5.1.3 of the Code. The Chairman of the Supervisory Board is responsible for coordinating the activities of the Supervisory Board, chairing the meetings, and representing its interests externally. The Supervisory Board should convene once each calendar quarter, and must convene twice each calendar halfyear. The meetings are convened and chaired by the Chairman or, if he is incapacitated, by a chairperson named by the Chairman. The person chairing the meeting decides the order in which the items on the agenda are dealt with and the form in which the voting is conducted. Unless other majorities are mandatory by law, the Supervisory Board passes its resolutions by a simple majority of the votes submitted in the voting. If a vote is tied, the Chairman has the casting vote or, if he does not take part in the voting, the matter is decided by the vote of the Deputy Chairman, who is a shareholder representative.

The Supervisory Board of Fresenius SE & Co. KGaA conducts its business in accordance with the provisions of law, the articles of association of Fresenius SE & Co. KGaA, and its rules of procedure. The Management Board of the general partner Fresenius Management SE continuously informs the Supervisory Board of the corporate development, planning, and strategy. The Supervisory Board supervises the Company’s operating performance and, taking into account the auditor’s reports, reviews the Group’s annual financial statements. Another important part of the Supervisory Board’s activities is the work conducted within the committees formed in accordance with the requirements of the German Stock Corporation Act (AktG) and the recommendations of the Code.

The members of the Supervisory Board keep themselves regularly informed, through internal and external sources, about the latest requirements with regard to their supervisory activities. With the support of the Company, the Supervisory Board at all times ensures that its members are suitably qualified, keep their professional knowledge up to date, and further develop their judgment and expertise to the extent necessary for the proper performance of their duties, including those of the Supervisory Board committees. Information is sourced from various external experts. In addition, representatives from the Company’s specialists division provide information about important developments, for example about the strategic orientation of the Company in growth markets, relevant new laws and precedents, or changes in the U.S. GAAP and IFRS accounting and auditing standards.

An overview of the members of the Supervisory Board of Fresenius SE & Co. KGaA can be found here.

Here, the Supervisory Board reports on the main focuses of its activities and those of its committees in 2011.

Supervisory Board efficiency evaluation

The Supervisory Board of Fresenius SE & Co. KGaA deliberated on the efficiency evaluation in accordance with clause 5.6 of the Code at its meeting in March 2011.

It reviewed the efficiency of its activities through an open discussion within the full Supervisory Board. A companyspecific questionnaire covering the salient points for a selfevaluation served as the basis for the discussion. Among other things, this included the organization and structuring of the meetings, the amount of information, and how this information was provided. These self-evaluations showed that the Supervisory Board was efficiently organized, and that the cooperation between the Management Board of the general partner and the Supervisory Board of Fresenius SE & Co. KGaA worked very well.

Cooperation between general partner and Supervisory Board of Fresenius SE & Co. KGaA

Good corporate governance requires trusting and efficient cooperation between the Management and the Supervisory Board. The Management Board of the general partner and the Supervisory Board of Fresenius SE & Co. KGaA closely cooperate for the benefit of the Company. Open communication is of great importance. The common goal is to sustainably increase the company value according to the corporate governance and compliance principles. The general partner and the Supervisory Board of Fresenius SE & Co. KGaA coordinate with each other, especially with regard to the Company’s strategic focus. As the monitoring body, the Supervisory Board of Fresenius SE & Co. KGaA also needs to be fully informed about operating performance and corporate planning, as well as the risk situation, including risk management and compliance. The general partner provided this information in full and in compliance with its duties.

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