Working procedures of the Supervisory Board

In order to fulfill its responsibility to monitor the work of the Managing Board, the Supervisory Board of Lenzing AG holds meetings at least once every quarter. Twelve Supervisory Board meetings were held during the reporting year (C-Rule 36). The Supervisory Board was informed by the Managing Board about business performance as well as major transactions and measures. The Supervisory Board supervised the work of the Managing Board and provided advice regarding significant strategic decisions. The main topics discussed at the meeting included trends in the business situation, the strategic development of the Group including ESG topics and M&A projects, the status of investment projects that had been implemented, measures to mitigate the negative effects of the current economic environment, analysis and discussion of market trends for fibers and pulp, discussion of the KPIs relevant for Lenzing and their trend over the coming years, (re-)financing topics and measures, objectives and progress of the performance program that had been launched, research and development, as well as the personnel composition of the Managing Board and the distribution of responsibilities.

The Supervisory Board of Lenzing AG appointed seven committees from among its members in the 2024 financial year (C-Rules 34 and 39 of the ACCG):

Audit Committee

The Audit Committee fulfills the responsibilities defined by Section 92 Para. 4a of the Austrian Stock Corporation Act (AktG). Accordingly, it is especially responsible for monitoring the financial accounting process and making recommendations or suggestions to ensure its reliability. This committee also oversees the effectiveness of the internal control system, of internal auditing, and of the risk management system. It supervises the audit of the separate and consolidated financial statements, examines and monitors the auditor’s independence, and approves and controls non-audit services. The Audit Committee also examines the annual financial statements and prepares their approval by the full Supervisory Board, evaluates the Managing Board’s proposal for the distribution of profits, the Management Report, and the Group Corporate Governance Report. The chair of the Audit Committee defines the reciprocal communication between the auditor and the Audit Committee (C-Rule 81a of the ACCG). The committee is required to report to the Supervisory Board on its activities. In the 2024 financial year, five meetings of the Audit Committee were held. Reports from the Managing Board, the auditor, the compliance, internal audit, and risk management departments were discussed, as well as the financial accounting processes and the internal control system. In addition, the auditor’s independence was monitored. The refinancing of the Brazilian joint venture LDC was discussed and monitored as a special focus topic in 2024.

Nomination Committee

The Supervisory Board has formed a Nomination Committee. This committee makes recommendations to the Supervisory Board for appointments to fill vacant positions on the Managing Board and deals with issues related to succession planning. Recommendations are also made to the Annual General Meeting for appointments to the Supervisory Board. In the 2024 financial year, five meetings of the Nomination Committee were held. These dealt in particular with issues of succession planning for the Managing Board, succession planning for the Supervisory Board, and talent management.

Remuneration Committee

The Supervisory Board has formed a Remuneration Committee. It deals with the terms and conditions of the employment contracts with the members of the Managing Board and ensures compliance with C-Rules 27, 27a and 28 of the ACCG. In addition, the Remuneration Committee is responsible for preparing and reviewing the remuneration policy for the Managing Board members and Supervisory Board members, and for controlling the implementation of the remuneration policy for Managing Board members. The Remuneration Committee held eight meetings in the 2024 financial year, which dealt in particular with the Managing Board evaluation, target agreements, ensuring appropriate remuneration for Managing Board members in the challenging 2024 year, as well as the arrangement, adjustment or termination of employment contracts with Managing Board members.

Committee for Urgent Matters

The Supervisory Board has formed a committee to deal with urgent matters. It is authorized to make decisions in particularly urgent cases relating to transactions that require Supervisory Board approval. No meeting was held in the 2024 financial year.

Strategy, Growth and Innovation Committee

The Supervisory Board has formed a Strategy, Growth and Innovation Committee. This committee deals with reviewing the company’s strategic positioning, the monitoring of strategy implementation, as well as growth and innovation projects. In 2024, the committee primarily dealt with issues relating to strategic positioning within the competitive environment, measures to optimize the commercial organization, and M&A projects. Two meetings were held in the 2024 financial year.

ESG Committee

The Supervisory Board has formed an ESG Committee. This committee is intended to support the Managing Board, the full Supervisory Board, the Audit Committee and the Strategy, Growth and Innovation Committee in matters relating to non-financial reporting and strategic ESG issues. Three meetings were held in the 2024 financial year. This paragraph also fulfils the ESRS disclosure requirements of ESRS 2 GOV-1 paragraphs 22 b and 22 c i.

Value Creation Committee

The Supervisory Board of Lenzing AG established the Value Creation Committee in 2023 and continued in 2024 to monitor the design and implementation of the holistic performance enhancement program initiated by the Managing Board. Four meetings were held in the 2024 financial year.

The following table shows the composition of the Committees of the Lenzing Supervisory Board during the financial year 2024: