3 BOARD OF DIRECTORS

All the members of the Board of Directors are non-executive members. None of the Board members was formerly a member of the Management Board of Tecan Group Ltd. or any Group company during the period under review or the three preceding periods. According to the Articles of Incorporation the permitted number of other mandates of the members of the Board of Directors in the highest executive management or bodies of legal entities outside of the Company’s group is limited to six mandates in listed and six mandates in non-listed companies, foundations and other legal entities that are registered in the commercial register. Mandates in different legal entities of the same group (including in joint ventures directly or indirectly owned by such a group or the Company that are not consolidated) are counted as one mandate per group, but may not exceed the number of 20 additional mandates if counted separately. Short-term transgressions of these maximum numbers by a maximum of two mandates per category are permitted during a maximum period of six months. Mandates held by members of the Board of Directors by order of the Company shall not be subject to the limitations set out above. Conflicts of interest are prohibited by Article 7 of the Articles of Incorporation. Adherence to the Articles of Incorporation is monitored by the Board Secretary, Tecan’s General Counsel. No conflicts of interest have been identified in 2023 or previous years. Should a conflict of interest be detected, it would be addressed and if deemed material, reported to shareholders. Tecan completes external sustainability reporting and is highly rated by agencies including MSCI and ISS for its strong governance practices.

Pursuant to the Company’s Articles of Incorporation, the Board of Directors is composed of a minimum of one and a maximum of seven members, who are elected for a term of one year. Re-election after the end of the term is permitted. The Chair of the Board of Directors is elected by the General Meeting. The Board of Directors is responsible for the ultimate supervision and management of the Company, including the development of general strategies and guidelines, and for all other duties that are non-transferable under applicable law. To the extent permitted by law and provided that there is no conflict with the Company’s Articles of Incorporation and the Organizational Regulations adopted by the Board of Directors, management of the Company’s affairs is delegated to the Management Board pursuant to the Organizational Regulations. The Board’s performance is reviewed by the Nomination Committee as described in that section of this report; adherence to Tecan’s Articles of Incorporation is monitored by the Board Secretary, Tecan’s General Counsel.

Tecan’s shareholders vote to approve the appointment of Board members or the continuation of their term in office at Tecan’s Annual General Meeting. Otherwise, performance is not formally evaluated. Any report made via Tecan’s independent, third-party operated whistleblower hotline regarding the Board would be investigated by Tecan’s Compliance function, as described previously. The Board of Directors meets as often as business matters require but at least five times a year upon invitation of the Chair or, in their absence, upon invitation of another Board member. Any member of the Board of Directors may call a meeting by specifying the reasons for the meeting. The meetings usually last between four and six hours. As a general rule, the CEO and CFO attend the Board meetings and other members of the Management Board or senior management invited by the Chair attend for certain portions. At each meeting, the Chair reserves some time for discussion between the members of the board and the CEO and some time for discussion amongst the Board members only. Meetings may also be held by videoconference or by telephone. The Board of Directors passes its resolutions by an absolute majority of votes of Board members present. In the event of a tie, the Chair of the Board has the deciding vote. Resolutions may be passed in writing unless a member requests oral deliberation. Five Board of Directors’ meetings were held in the year under review. Three meetings of the Audit Committee lasting about two to three hours each were also held. In addition, there were three meetings of the Compensation Committee and several telephone conferences of the Nomination & Governance Committee. In the year under review, all members of the Board of Directors took part in all Board of Directors’ meetings and the committee members attended all of their respective committee meetings.

The Board of Directors has appointed committees composed of members of the Board to prepare and implement its resolutions and to exercise its supervisory function. The Committees are assigned with specific duties and responsibilities. All other duties and responsibilities remain with the full Board of Directors, for instance the review of the Company’s ESG approach, activities and risks and Cyber Security risks. The committees meet upon invitation of the respective Chair and as often as business requires, but at least twice a year. Committee resolutions and proposals for consideration by the entire Board of Directors are passed by a majority of votes cast, provided that there is a quorum of at least two committee members present. Resolutions may also be passed by postal vote. For specific topics (for example in connection with M&A discussions) the Board of Directors forms ad-hoc committees. Several conference calls of ad-hoc committees were held in the year under review. The Board of Directors has established three committees that are composed as follows:

The Audit Committee is composed of at least two members. The Committee’s principal duties and responsibilities are to form an opinion regarding internal and external audits and to monitor cooperation between the external statutory auditors and the Company; to assess the quality of internal audits and compliance; to review the annual financial statements (both consolidated and single- entity) and interim financial statements destined for publication and report on them to the full Board of Directors; to make recommendations to the full Board of Directors, especially with regard to the approval of annual and interim financial statements; and to monitor the independence, performance and fees of the statutory auditors and propose that they be appointed or reappointed by vote of the Annual General Meeting. This Commitee is also charged with monitoring the risk management of the Company. 

Furthermore, the Audit Committee oversees the Company's reporting obligations and compliance regarding sustainability, in particular regarding environmental, social and governance (ESG) aspects, discuss feedback from investors, proxy advisors and analysts concerning the Company's performance in ESG matters, and generally assists the Board of Directors and support the Management in responding to ESG related questions. Representatives of the external statutory auditors and the internal auditor may attend meetings of this Committee at the invitation of the Chair. The experience in financial matters of members of the Audit Committee are set out on pages 80 and 81.

The majority of members of the Compensation Committee must be non-executive and independent members of the Board of Directors. The role and responsibilities of the Compensation Committee are described in the Compensation Report on page 90 to 104.

The majority of members of the Nomination and Governance Committee must be independent and non-executive members of the Board of Directors. The Committee consists of three members. It is chaired by the Chair of the Board. The most important duties of this Committee include performance review and succession planning at the level of the Board of Directors and the Management Board; defining the selection criteria for members of the Board of Directors and the Management Board; and regularly reviewing the performance of the Board of Directors, its committees and its individual members based on a set of overall competences of the Board required for the Company. This Committee is also charged with monitoring risk management and corporate governance.

The members of the Management Board are actively involved in the various committees of the Board of Directors. The CEO, CFO, the General Counsel and the internal auditors and sometimes the external statutory auditors attend the meetings of the Audit Committee, for example. In addition, members of the Management Board meet with individual Board members on an ad-hoc basis to discuss and delve more deeply into specific topics. Through these meetings, critical concerns could be raised. No critical concerns impacting stakeholders were raised in 2023.

The Board of Directors receives monthly reports from the Group’s management information system so that it can monitor financial and operational performance. All relevant guidelines are presented to the Board of Directors or the appropriate committees for approval to ensure shared responsibility for all major decisions.

Internal Audit: Since the internal auditors report to the Audit Committee, their independence is assured. All companies are audited every three years on the basis of a risk analysis. The annual audit plan consists of audits of all major companies and is approved by the Audit Committee. A summary of significant findings and recommendations is submitted directly to the Audit Committee with copies to the CEO, the CFO and the General Counsel. The reports are also made available to the external statutory auditors. During the year under review, Internal Audit focused its efforts on strengthening the internal control system for financial reporting and compliance. Other areas audited include compliance with laws and standards; the compliance, efficiency and effectiveness of business processes; improved cyber security measures; and the implementation of recommendations made by the internal auditors. Additional information on risk management is given in Note 30 to the consolidated financial statements.