Statement on Corporate Governance

Joint Report of the Executive Board and the Supervisory Board according to section 3.10 of the German Corporate Governance Code including Statement of Compliance

The German Corporate Governance Code is geared exclusively toward the conditions found in a German stock corporation (Aktiengesellschaft) and not toward a corporation with general partners (Kommanditgesellschaft auf Aktien) such as Merck KGaA. Merck KGaA has resolved to apply the Code logically to serve the interests of its shareholders. In order to enable shareholders to compare the situation at other companies more easily, we base corporate governance on the conduct recommendations made by the Code Commission relating to management and supervision (governance) and forego having our own, equally permissible, code. The recommendations of the Code, the intent and meaning of which are applied, were complied with in the period between the last Statement of Compliance and June 14, 2012, i.e. during the period of validity of the version of the Code dated May 26, 2010, with one exception, and since the change in the Code announced on June 15, 2012 with two exceptions. In the future, the recommendations of the Code will again be complied with, subject to the approval of the General Meeting. Further details can be found at Statement of Compliance.

For a clearer understanding, the following gives a general explanation of the Kommanditgesellschaft auf Aktien (KGaA) company form. The specific situation at Merck is then described and additional references are made to the General Meeting and shareholder rights.