Joint Report of the Executive Board and the Supervisory Board
according to section 3.10 of the German Corporate Governance Code
The German Corporate Governance Code is geared exclusively toward the conditions at a German stock corporation (Aktiengesellschaft). Merck KGaA has therefore independently examined and determined how the Code can be applied logically to a partnership limited by shares (Kommanditgesellschaft auf Aktien) to serve the interests of shareholders. In order to enable shareholders to compare the situation at other companies more easily, we have decided to base corporate governance on the conduct recommendations made by the Code Commission relating to management and supervision (governance) and to forego having our own, also permissible, code. With a few exceptions, the recommendations of the Code, the intent and meaning of which are applied, are complied with. To improve understanding, the following gives a general explanation of the company form Kommanditgesellschaft auf Aktien (KGaA)followed by the specific situation at Merck.