The Board of Directors is responsible for PolyPeptide’s overall direction and oversight of management, and holds the ultimate decision-making authority, with the exception of matters reserved for shareholders.

We believe that the composition of our Board of Directors should reflect PolyPeptide’s objectives, strategic requirements, geographical reach and its culture. The Board of Directors should further be diverse in terms of gender, nationality, geographical/regional and business experience. In furtherance of this, the Board of Directors has determined a wide range of skills to ensure that all members are well-qualified, committed and will devote the necessary time and effort to effectively perform their responsibilities. Based on the defined set of competencies, the Board members were asked to identify their key skills highlighted by their educational and professional background and personal achievements, as illustrated in the chart below.

Board skills distribution

The Remuneration and Nomination Committee regularly assesses the set of competencies as well as each Director’s contributions to ensure that an appropriate mix of skills, expertise and diversity is represented on the Board of Directors and its Committees.

3.1Members of the Board of Directors

As of 31 December 2021, the Board consisted of six (6) non-executive Directors (including the Chairman and the Lead Independent Director), three (3) of which are independent, as outlined below:

Set out below is a short description of the business experience, education and activities of each director.

Peter Wilden

Chairman since 2021
Non-executive

Nationality: German

Year of birth: 1957

Professional background

Beginning in 1991, Mr. Wilden held various senior roles within the Ferring Group, ultimately serving as Executive Vice President and CFO of Ferring Pharmaceuticals between 2000 and 2017. During his tenure with the Ferring Group, Mr. Wilden also served as member of the board of directors for various subsidiaries of the Ferring Group. Following his resignation as Executive Vice President and CFO in 2017, Mr. Wilden has continued to hold various directorships and advisory roles within the Ferring Group. Due to the Group’s ongoing business relationship with the Ferring Group, which is also considered a related party, Mr. Wilden is assessed as not independent.⁹

Prior positions at PolyPeptide

• None

Outside mandates at listed companies

• None

Outside mandates at non-listed companies

• Vice-Chairman of Schlumberger AG, Austria (since 2014)
• Executive Chairman of Ferring International Center SA, Switzerland (since 2002)

Outside mandates at non-profit organizations

• Director of the Suisse Polar Foundation, Switzerland (since 2018)
• Chairman of Project HOPE Suisse International Foundation, Switzerland (since 2015)
• Director / Vice-Chairman of Project HOPE, USA (since 2012)

9 Ferring Group is disclosed in note 23 to the consolidated financial statements as a related party because it is related to the Company through the Esperante Investments Group (formerly: C&P Investors Group) ownership structure. For further information, see note 23 “Related parties” of the consolidated financial statements in the Financial Report 2021.

Former outside activities and functions

• Director of Ferring Ventures SA (previously named Trizell Holding SA), Switzerland (2014–June 2021)
• Director / Chairman of the Audit Committee / Vice-Chairman of Lonza Group AG, Switzerland (2004–2014)
• Executive Vice-President and CFO of Ferring Pharmaceuticals, Switzerland
  (2000–2017)
• Director of Trace Biotech AG, Germany (1999–2002)
• Director of Group Finance of Ferring BV, The Netherlands (1995–2000)
• Vice-President Finance & Accounting and Technical Operations of Ferring Arzneimittel GmbH, Germany (1993–1996)
• Director of Finance at Ferring Arzneimittel GmbH, Germany (1991–1993)
• IT Consultant at MaK Data System GmbH (within the Krupp Steel Group), Germany (1988–1991)
• Management Assistant, Krupp MaK Maschinenbau GmbH, Germany (1986–1988)
• Scientific Assistant within the IT-Group at the Institute of World Economics, Germany (1983–1986)
• Tax Inspector at the Inland Revenue Service, Germany (1980–1981)

Education

• PhD in Economics, University of Kiel, Germany (1991)
• MBA in Industrial Economics, University of Kiel, Germany (1986)
• Education Tax Inspector at the German Inland Revenue Service, Germany
  (1977–1980)

Key skills: Industry experience; Leadership / management; Finance / accounting / risk management; Data / digital; Environmental, social and governance (ESG); Strategy / development / execution

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Patrick Aebischer

Vice-Chairman and Lead Independent Director since 2021¹⁰
Non-executive

Nationality: Swiss

Year of birth: 1954

Professional background

Since 2000, Dr. Aebischer has served as a Professor of Neurosciences at the Swiss Federal Institute of Technology Lausanne (EPFL), Switzerland. He has received numerous honors, including the Robert Bing Prize of the Swiss Academy of Medicine and the Pfizer Foundation Prize for Clinical Neurosciences. Dr. Aebischer holds various academic advisory positions as well as various positions in non-profit foundations and scientific advisory boards.

10 Dr. Patrick Aebischer has been a Senior Partner and member of the Investment Advisory Committee of NanoDimension Management Limited since 2017. In 2021, PolyPeptide decided to commit to a limited investment in a partnership managed by NanoDimension Management Limited. Dr. Aebischer abstained from voting on this item (see also section 3.5.2.2 “2021 Board of Director meetings and key topics” of this Corporate Governance Report). The indirect business relationship between PolyPeptide and Dr. Aebischer resulting from said commitment is considered comparatively minor. Thus, Dr. Aebischer is considered independent within in the meaning of
art. 14 Swiss Code of Best Practice for Corporate Governance and section 4(d) of the Organizational Regulations.

Prior positions at PolyPeptide

• None

Outside mandates at listed companies

• Director of Logitech SA, Switzerland (since 2016)
• Director of Nestlé SA, Switzerland (since 2015)

Outside mandates at non-listed companies

• Chairman of Vandria SA, Switzerland (since 2021)
• Senior Partner of NanoDimension Management Limited, Cayman Islands (since 2017)
• Chairman of the Novartis Venture Fund, Switzerland (since 2014)
• Chairman of Amazentis SA, Switzerland (since 2007)

Outside mandates at non-profit organizations

• Director of Fondation «Geneva Science & Diplomacy Anticipator», Switzerland
  (since 2019)
• Director of Fondation du domaine de Villette, Switzerland (since 2018)
• Chairman of Fondation ArtTech, Switzerland (since 2017)
• Director of Fondation Defitech, Switzerland (since 2017)
• Director of Jacobs Foundation, Switzerland (since 2017)
• Chairman of Swiss Polar Foundation, Switzerland (since 2016)
• Director of Fondation Claude Nobs, Switzerland (since 2015)
• Director of Fondation du Festival de Verbier, Switzerland (since 2015)

Former outside activities and functions

• Director of Lonza Group AG, Switzerland (2008–2020)
• Professor of Neurosciences, Swiss Federal Institute of Technology Lausanne (EPFL), Switzerland (2000–2019)
• President of EPFL, Switzerland (2000–2016)
• Founding scientist and Director of Modex Therapeutiques Inc., Switzerland (IPO 2000 on SIX) (1996–2004)
• Professor and Medical Director of the Surgical Research Division at Lausanne University Medical School Hospital (1992–2000)
• Founding scientist and Director of CytoTherapeutics Inc., USA (IPO 1996 on NASDAQ) (1989–1999)
• Professor, Brown University, USA (1986–1990)

Education

• MD, University of Geneva, Switzerland (1980)
• Dr. in medicine, University of Geneva, Switzerland (1983)

Key skills: Industry experience; Leadership / management; Data / digital; Environmental, social and governance (ESG); Strategy / development / execution; Independence

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Erik Schropp

Member since 2021
Non-executive

Nationality: Dutch

Year of birth: 1964

Professional background

Currently, Mr. Schropp is CEO of Esperante Investments Group (formerly: C&P Investors Group), and a director of Draupnir Holding B.V. (one of the Company’s significant shareholders, see section 1.2 “Significant shareholders” of this Corporate Governance Report).¹¹ As a result of these roles, Mr. Schropp is assessed as not independent.

Prior positions at PolyPeptide

• Director of PolyPeptide Laboratories Holding B.V., The Netherlands, and PolyPeptide Laboratories Holding (PPL) AB, Sweden (2017–2021)

Outside mandates at listed companies

• None

Outside mandates at non-listed companies

• CEO of Esperante Investments Group (since 2020)
• Director of SEVER Life Sciences B.V., The Netherlands (since 2019)
• Director of Draupnir Holding B.V., The Netherlands (since 2008)
• Director of Esperante B.V., The Netherlands (since 2008)
• Director of Svar Life Science AB, Sweden (since 2008)
• Director of Ferring Foundation B.V., The Netherlands (since 2008)

Outside mandates at non-profit organizations

• None

Former outside activities and functions

• Director of FinVector Oy, Finland (2020–2021)
• Director of Altacor Ltd., United Kingdom (2014–2017)
• Group Financial Officer, C&P Investors Group, The Netherlands (2008–2020)
• Group Tax & Finance Director, C&P Investors Group, The Netherlands (2005–2008)
• International Tax & Finance Director, Ferring Pharmaceuticals, The Netherlands and Denmark (1999–2005)
• International Tax Manager, Unisource N.V., The Netherlands (1996–1999)
• Tax Manager, Arthur Andersen, The Netherlands (1988–1996)

Education

• Master's degree in Economics & Tax, Erasmus University, The Netherlands (1988)

Key skills: Leadership / management; Finance / accounting / risk management; Data / digital

11 Draupnir Holding B.V. is disclosed in note 23 to the consolidated financial statements as a related party because it is related to the Company through the Esperante Investments Group (formerly: C&P Investors Group) ownership structure. For further information, see note 23 “Related parties” of the consolidated financial statements in the Financial Report 2021.

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Jane Salik

Member since 2021
Non-executive (since 17 August 2021)

Nationality: American

Year of birth: 1953

Professional background

Ms. Salik joined PolyPeptide in 1996 as President of PolyPeptide Laboratories Inc., where she was responsible for sales and marketing, and overall management, administration and strategic planning for the company. In 2006, she was appointed CEO during which time she guided PolyPeptide through a period of significant growth, expansion of sales and profits, expanding into new geographies and establishing a culture of innovation and execution of best practice. Ms. Salik resigned as CEO on 29 April 2021 and was a member of the Executive Committee of PolyPeptide until 17 August 2021. Due to her recent operational management roles at the Group, Ms. Salik is assessed as not independent.

Prior positions at PolyPeptide

• President, PolyPeptide Laboratories, Inc., USA (1996–2006)
• Group CEO (2006–April 2021) and Executive Committee member (2006–
  August 2021)
• Director of PolyPeptide Laboratories Holding B.V., The Netherlands, as well as certain of its direct and indirect global subsidiaries (2003–2021)

Outside mandates at listed companies

• None

Outside mandates at non-listed companies

• None

Outside mandates at non-profit organizations

• None

Former outside activities and functions

• Vice President of Sales and Marketing, Bachem California, USA (1986–1996)
• Technical services biochemist, product manager and marketing manager, Boehringer Mannheim, USA (1980–1986)

Education

• PhD in Molecular and Cellular Biology, SUNY Stony Brook, USA (1980)
• B.A. in Biology, Lafayette College, USA (1975)

Key skills: Industry experience; Leadership / management; Environmental, social and governance (ESG); Strategy / development / execution

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Beat In-Albon

Member since 2021
Independent; Non-executive

Nationality: Swiss

Year of birth: 1952

Professional background

From 2016 to 2018, Mr. In-Albon was Head of Strategic Projects at Lonza AG, Switzerland, on a part-time basis ahead of his retirement. Previously, Mr. In-Albon served as Senior Vice President and Chief Operating Officer Specialty Ingredients and was a member of the Executive Management Committee of Lonza AG, Switzerland, from 2012 until 2015.

Prior positions at PolyPeptide

• None

Outside mandates at listed companies

• Chairman of Evolva Holding SA, Switzerland (since 2020)

Outside mandates at non-listed companies

• Chairman of Hans Kalbermatten Thermalbad AG, Switzerland (since 2021)
• Director of Deccan Fine Chemicals Pvt. Ltd., India (since 2019)

Outside mandates at non-profit organizations

• Vice-Chairman of Lonza Arena AG, Switzerland (since 2020)

Former outside activities and functions

• Director / Chairman of Escientia Switzerland AG, Switzerland (2020–2021)
• Head of Strategic Projects at Lonza AG, Switzerland (2016–2018)
• Senior Vice President and COO Specialty Ingredients / member of the Executive Management Committee, Lonza AG, Switzerland, (2012–2015)
• Director of Siegfried AG, Switzerland (2009–2012)
• Executive Vice President of Industrial Services, SGS SA, Switzerland (2009–2012)
• Executive Vice President of Life Science Services / Member of the Operations Council, SGS SA, Switzerland (2008–2009)
• Senior Vice President / Head of Organic Fine- & Performance Chemicals / member of the Executive Management Committee at Lonza Group AG, Switzerland (2006–2007)
• Senior Vice President / Head of Organic Fine- & Performance Chemicals / member of the Executive Management Committee of Lonza AG, Switzerland (2003–2006)
• Various positions at Lonza AG, Switzerland, in the fields of Agrochemicals and Organic Fine Chemicals (starting 1983)

Education

• Master of Business Administration in Political Economy, University of Fribourg, Switzerland (1987)
• PhD in Economic Science, University of Fribourg, Switzerland (1983)

Key skills: Industry experience; Leadership / management; Finance / accounting / risk management; Law / regulatory; Environmental, social and governance (ESG); Independence

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Philippe Weber

Independent¹²; Non-executive
Member since 2021

Nationality: Swiss

Year of birth: 1965

Professional background

Mr. Weber is a member of the board of directors of Niederer Kraft Frey AG, Zurich (since 2008) and has been a partner of Niederer Kraft Frey AG, Zurich since 2002. He is an attorney-at-law admitted to the Swiss bar.

Prior positions at PolyPeptide

• None

Outside mandates at listed companies

• Vice chairman of Leonteq AG, Switzerland, and Leonteq Securities AG, Switzerland (both since 2020)
• Director of Medacta Group AG, Switzerland (since 2019)
• Director of EDAG Engineering Group AG, Switzerland (since 2015)

Outside mandates at non-listed companies

• Director of NorthStar Holding AG, Switzerland (since 2018)
• Director of Banca del Ceresio SA, Switzerland (since 2017)
• Director of Newron Suisse SA, Switzerland (since 2007)
• Partner at Niederer Kraft Frey AG, Switzerland (since 2002)
• Company Secretary of CLS Group Holdings AG, Switzerland (since 2002)

Outside mandates at non-profit organizations

• None

Former outside activities and functions

• Chairman and managing partner of Niederer Kraft Frey AG, Switzerland (2015–
  March 2021)
• Director of Robert Aebi AG, Switzerland (2004–2017)

Education

• PhD in law (summa cum laude), University of Zurich, Switzerland (1995)
• LL.M. (with distinction), European University Institute (EUI) in Fiesole, Italy (1994)

Key skills: Leadership / management; Law / regulatory; Environmental, social and governance (ESG); Strategy / development / execution; Independence

12 Philippe Weber is a Partner at Niederer Kraft Frey AG (NKF), which acted as legal adviser to PolyPeptide in connection with its IPO and other ongoing legal matters. Refer to the section 4.2 “2021 compensation of the Board of Directors” of the Remuneration Report 2021 for disclosure of the fees received by NKF in relation to ongoing legal matters. The business relationship between PolyPeptide and Mr. Weber is considered comparatively minor. Thus, Mr. Weber is considered independent within in the meaning of art. 14 Swiss Code of Best Practice for Corporate Governance and section 4(d) of the Organizational Regulations.

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3.2Other activities and vested interests

Except as disclosed in the biographies of the members of the Board of Directors, no further activities or vested interests are carried out outside of PolyPeptide.

3.3Mandates and other permitted activities

As required by OaEC and in the interest of good governance, our Articles of Association limit the number of functions in superior management or administrative bodies of legal units other than with PolyPeptide that Directors are allowed to hold at one time.

Pursuant to art. 23 of the Articles of Association, the Directors may have the following other functions in the superior management or administrative bodies of legal units obliged to register themselves in a Swiss commercial register or a foreign equivalent thereof:

• up to four (4) mandates as member of the board of directors or any other superior management or administrative body of listed companies; and, in addition,
• up to ten (10) mandates as member of the board of directors or any other superior management or administrative body of legal entities that do not meet the above mentioned criteria.

With respect to the additional activities of the Directors, mandates in companies that are under uniform control or the same beneficial ownership are deemed to be one mandate.

The following mandates shall not be subject to the limitations set forth in art. 23 of the Articles of Association:

• mandates in companies which are controlled by the Company or which control the Company;
• mandates held at the request of the Company or companies controlled by it; no member of the Board of Directors shall, however, hold more than ten (10) such mandates; and
• mandates in associations, charitable organizations, foundations, employee welfare foundations and other similar organizations; no member of the Board of Directors shall, however, hold more than fifteen (15) such mandates.

3.4Election and term of office

According to our Articles of Association, the Board of Directors consists of a minimum of three (3) members. As prescribed by Swiss Law, all members of the Board of Directors, including the Chairman, have to be elected individually, and may only be removed, by a shareholders' resolution. The maximum term of office for a member of the Board of Directors is one year. In this context, one year means the time period between one general meeting and the next or, if a member is elected at an extraordinary shareholders' meeting between such extraordinary shareholders' meeting and the next general meeting. Re-election is possible. The Company’s Articles of Association do not contain a limitation on the number of terms served or the age of members of the Board of Directors, including the Chairman.

The Board of Directors appoints the secretary who does not need to be a shareholder or a member of the Board of Directors.

The members of the Remuneration and Nomination Committee (individually) as well as the independent proxy (the “Independent Proxy”) are also elected by the general meeting for a one-year term as required by the OaEC.

If the office of the Chairman of the Board of Directors is vacant, the Remuneration and Nomination Committee is not complete or the Company does not have an Independent Proxy, the Board of Directors shall appoint a substitute for the time period until the conclusion of the next general meeting that must be (with the exception of the Independent Proxy) a member of the Board of Directors.

Please refer to section 3.1 “Members of the Board of Directors” of this Corporate Governance Report for information relating to the time of first election to office of the Company’s current Directors.

3.5Internal organizational structure

3.5.1Allocation of tasks within the Board of Directors

3.5.1.1General

Our Board of Directors is responsible for the ultimate direction of PolyPeptide, supervision of our management and holds the ultimate decision-making authority, with the exception of matters reserved for shareholders.

The Board of Directors determines PolyPeptide’s strategy, the allocation of resources, and the management framework. It is also responsible for setting the organizational structure, accounting, financial control and financial planning. In addition, the Board of Directors takes responsibility for all sustainability and environmental, social and governance (“ESG”) related issues.

The internal structure of our Board of Directors is set out in the Organizational Regulations, which determines the corporate bodies of PolyPeptide, defines their responsibilities and competences regarding the management and regulates the functioning and cooperation of the various bodies involved in PolyPeptide’s management. Subject to applicable law and the Articles of Association, the allocation of tasks within the Board of Directors is determined annually by the Board at its first meeting following the general meeting in accordance with section 2.1.1 of the Organizational Regulations.

To operate effectively and allow in-depth focus in specific areas, the Board of Directors has three standing committees (each, a “Committee”):

The Board of Directors may form additional ad-hoc and standing committees for particular areas within the scope of its duties to deal with specific issues. In 2021, no such additional ad-hoc or standing committees were formed.

Each Committee generally comprises two or more members of the Board of Directors with its own charter governing its duties and responsibilities. The Committees have no decision-making authority of their own, and the Board of Directors remains ultimately responsible for the tasks delegated to the Committees by Swiss law, the Articles of Association or the Organizational Regulations.

At least annually, the Board reviews its own performance, as well as the performance of each of the Committees. Such assessment seeks to determine whether each of the Board and the Committees function effectively and efficiently. For 2021, the self-assessments were prepared by the Company based on customary industry evaluations and questionnaires, and reviewed and commented on by the Chairman. In light of the recent IPO, the assessments largely focused on the efficiency and effectiveness of the Board and its Committees. This annual review was finalized during the first quarter of 2022.

Peter Wilden is currently serving as the Chairman of the Board of Directors.

3.5.1.2Lead Independent Director

The Lead Independent Director is an independent member of the Board of Directors and is elected by the Board of Directors for a term of one year or until the conclusion of the next general meeting. If the Chairman is indisposed, the Lead Independent Director will take the chair at the meetings of the Board of Directors and the shareholders' meeting. In particular, the Lead Independent Director will chair the meeting of the Board of Directors or the shareholders' meeting if the Chairman is required to abstain from the deliberation and decision-taking in case the following items are on the agenda: (i) assessment of the work of the Chairman; (ii) decision of the Board of Directors on the request to the shareholders' meeting for the re-election or not of the Chairman; (iii) decision about the compensation of the Chairman; and (iv) any other matters in which the Chairman has a conflict of interest. The Lead Independent Director is entitled to call a meeting of the Board of Directors whenever he or she deems fit.

Patrick Aebischer is currently serving as the Lead Independent Director and Vice Chairman.

3.5.2Working methods of the Board of Directors

3.5.2.1Overview

Meetings of the Board are held as often as the business requires, but as a general rule at least four (4) times per year, including (i) in the first quarter, inter alia, to approve the annual report and the agenda and invitation to the upcoming general meeting; (ii) immediately after the general meeting, inter alia, to constitute the Board; (iii) in the third quarter, inter alia, to approve the half year financials; and (iv) in the fourth quarter, inter alia, to approve the budget for the next financial year. For each of these meetings, the Chairman also generally selects key business or strategic topics for more in-depth focus and discussion, such as near-term capital expenditures strategy. Meetings of the Board are convened by the Chairman if and when the need arises or whenever a Director or the CEO, indicating the reasons, so requests in writing. If the Chairman does not comply with any such request within 14 days, the Lead Independent Director is entitled to call the meeting.

Notice of meetings is given at least five (5) business days prior to the meeting. The notice must set forth the time, place and agenda of the meeting so that Directors may have a reasonable understanding of the business intended to be conducted at the meeting. Directors are provided with all necessary supporting materials at least five (5) business days prior to the meeting. In urgent cases (as determined by the Chairman in his or her discretion), a meeting may be held on appropriate shorter notice. If the Chairman deems it necessary, supporting materials may also be provided later to allow the Board to receive the latest available information. This applies, in particular, to updates on financial and other relevant data. Board meetings may be held in person, by telephone or by video conference.

The Chairman, or in his absence the Lead Independent Director, or in the absence of both, a Director designated by the attending Directors, shall chair the meeting.

If all Directors are present and agree, deviations from the formal requirements set forth in the Organizational Regulations (including those described above) are permitted; in particular, decisions can be taken in respect of items that are not listed on the agenda for the meeting.

Each Director shall disclose to the Chairman and the CEO, respectively, regarding any conflict of interest arising or relating to any matter to be discussed at the meeting of the Board as soon as the Director becomes aware of its potential existence. The Chairman (or, if applicable, the Lead Independent Director or the Remuneration and Nomination Committee) and the CEO, respectively, will decide upon appropriate measures to avoid any interference of such conflict of interests with the decision-making of the Company. As a rule, subject to exceptional circumstances in which the best interests of the Company dictate otherwise, the Director will not participate in the decision-making involving the matter at stake. The Director with a conflict will have the right to, or may be required by the Chairman and the CEO, respectively, to provide a statement of his or her view of the matter.

In principle (and as set forth by the Organizational Regulations), the CEO and the other members of the Executive Committee attend designated and selected sections of the meetings of the Board without the right to vote as guests, except where not appropriate (e.g., if particular matters relating to their performance or remuneration are discussed). For example, as a general matter all members of the Executive Committee attend Board sessions dedicated to reports from management, whereas no members of the Executive Committee are present at the non-executive sessions of the Board meetings. Other members of the Group’s senior management are expected to participate at meetings of the Board if specific issues falling within their responsibility are on the agenda. The Chairman decides if and which persons outside the Board are entitled to attend meetings of the Board as guests.

In order to pass resolutions, not less than a majority of the Directors must be participating in the meeting (whether in person, by phone or video conference). The Board may pass resolutions with the majority of the votes cast (simple majority). Abstentions count as votes uncast. In case of a tie of votes, the Chairman has the casting vote. Board resolutions may also be passed by means of circular resolutions, by letter, facsimile or pdf-document (e-mail); provided that no Director requests by phone, facsimile or e-mail within five (5) days of receipt of the proposed resolution that the resolution be deliberated in a meeting. Board resolutions by means of circular resolutions require the affirmative vote of the majority of the Directors.

3.5.2.22021 Board of Director meetings and key topics

Since the First Day of Trading on 29 April 2021, the Board of Directors met six (6) times, in a combination of in person sessions and video conferences, for an average duration of approximately two and a half hours (with individual sessions lasting between one to four hours).

The following table outlines the dates and the attendees of each meeting of the Board of Directors.

The key topics of the Board of Directors during this period included, among other things:

• Environmental, Social and Governance (ESG) Roadmap
• Review and approval of the 2021 half-year report and consolidated financial statements
• Regular review and discussion regarding the Group's year-to-date sales and full-year outlook
• Deep-dive into PolyPeptide’s near-term capital expenditures plans
• Planning and content of the Group’s 2021 annual report and topics related to the 2022 general meeting
• Approval of the new credit facility and repayment of outstanding term loan with Danske Bank
• Review and approval of investment as a limited partner investment into NanoDimension IV, L.P.¹³
• Review and approval of the Group’s budget for 2022 financial year
• Review and approval of the rules for the long-term incentive program
• Approval of the individual targets and weighting of 2021 variable short-term incentive for the members of the Executive Committee; and approval of the individual targets of 2021 variable long-term incentive for the CEO

3.5.3Working methods of the Committees

The Committees have no decision-making authority of their own, and the Board remains ultimately responsible for the tasks delegated to the Committees by Swiss law, the Articles of Association or the Organizational Regulations.

The Committees keep the Chairman of the Board of Directors informed on a current basis about all important strategic issues, transactions as well as any business situations and/or developments within their scope of responsibilities and duties. The Chairman monitors such informational duties of the Committees. The chairman of each Committee provides the full Board of Directors at their meeting with an overview of key topics discussed at the most recent Committee meeting.

Each Committee meets at such frequency as it deems necessary to fulfill its duties, normally ahead of ordinary Board meetings, which are expected to take place at least four times per year. Additional meetings may be held and may be convened at the request of either the Board of Directors or any Committee member. The Audit and Risk Committee further meets upon request of the governance, risk and compliance officer (the “GRC Officer”). Since PolyPeptide had its First Day of Trading on 29 April 2021, certain Committees have met at a reduced frequency than will be the case in the future due to the shortened period in 2021.

The secretary prepares the agenda for each meeting, keeps the minutes, and assists the Committee and the chairman to coordinate and fulfill their duties and assignments. Once signed by the Committee chairman and secretary, the minutes of each Committee meeting are made available to the full Board of Directors for their review.

3.5.3.1Remuneration and Nomination Committee

The Remuneration and Nomination Committee is entrusted with preparing and periodically reviewing PolyPeptide’s compensation policy, compensation strategy and principles as well as submitting proposals and recommendations to the Board of Directors regarding compensation matters. The Remuneration and Nomination Committee further supports the Board of Directors in preparing the compensation proposals for the general meeting. In addition, the Remuneration and Nomination Committee assists the Board of Directors in relation to the succession planning for and nomination of the members of the Board of Directors and the Executive Committee as well as the corporate governance of the Company and the Group. In furtherance of this, the Remuneration and Nomination Committee, for example, regularly assesses the set of competencies as well as each Director’s contributions to ensure that an appropriate mix of skills, expertise and diversity is represented on the Board of Directors and its Committees. The specific responsibilities and competencies of the Remuneration and Nomination Committee are set forth in art. 19 of the Articles of Association, section 5.3 of the Organizational Regulations as well as the Remuneration and Nomination Committee Charter.

The members of the Remuneration and Nomination Committee are individually elected by the general meeting for a one-year term. The chairman of the Remuneration and Nomination Committee shall be independent and is appointed by the Board of Directors. As of 31 December 2021, the Remuneration and Nomination Committee consisted of two members (Peter Wilden and Philippe Weber) and was chaired by Philippe Weber.

2021 Remuneration and Nomination Committee meetings and key topics

Since 29 April 2021, the Remuneration and Nomination Committee met three (3) times, in a combination of in person sessions and video conferences, for an average duration of approximately one and a half hours.

During the course of 2021, the key topics discussed by the Remuneration and Nomination Committee included, among other things:

• Review of remuneration principles, strategy and structure
• Establishment of rules for the long-term incentive program
• Individual performance targets and weighting for the 2021 variable short-term incentive for the members of the Executive Committee
• Individual performance targets for the 2021 variable long-term incentive for the CEO
• The structure and approach to the Remuneration Report 2021, including analysis on remuneration disclosure
• Succession planning at PolyPeptide
• Review results of reference group benchmarking in relation to the long-term incentive program as well as Board and Executive Committee remuneration

3.5.3.2Audit and Risk Committee

The Audit and Risk Committee assists the Board of Directors with respect to matters involving the financial and risk management aspects of governance. The Audit and Risk Committee focuses on assessing the adequacy and effectiveness of the Group’s internal and prudential systems and controls in relation to both financial and non-financial risks. This includes compliance with legal and regulatory obligations, insurance and related matters. The Audit and Risk Committee will also obtain reasonable assurance with respect to the activity of the Internal Audit, evaluates the external auditors regarding the fulfillment of the necessary qualifications and independence according to the applicable legal provisions and makes proposals to the Board of Directors concerning the choice of the external auditors. The specific responsibilities and competencies of the Audit and Risk Committee are set forth in section 5.2 of the Organizational Regulations as well as the Audit and Risk Committee Charter.

The members of the Audit and Risk Committee are appointed by the Board of Directors. At least one member, including the chairman, of the Audit and Risk Committee shall be independent. As of 31 December 2021, the Audit and Risk Committee consisted of two members (Erik Schropp and Beat In-Albon) and was chaired by Beat In-Albon.

2021 Audit and Risk Committee meetings and key topics

Since 29 April 2021, the Audit and Risk Committee met four (4) times, in a combination of in person sessions and video conferences, for an average duration of approximately one and a half hours.

During the course of 2021, the key topics discussed by the Audit and Risk Committee included, among other things:

• Review of 2021 half-year consolidated financial statements
• Discussions regarding various key accounting topics, including IPO cost allocation and share-based payments
• Review and monitoring of the Group’s year-to-date sales and financial performance, including key operational KPIs
• Discussions around the implementation of the Group’s Internal Audit function
• Establishment of an Enterprise Risk Management system, including the function Chief Information Security Officer, and evaluation of the Group’s key risks and mitigating strategies
• Plan and requirements for the 2021 audit of the Group’s consolidated financial statements
• Compliance and (cyber)security matters
• Implementation of a whistleblower program, including an independent whistleblower hotline
• Internal control system

3.5.3.3Innovation and Technology Committee

The Innovation and Technology Committee supports the Board of Directors and Executive Committee through the review of PolyPeptide’s technology plans and strategies, while monitoring existing and future trends in technology related to PolyPeptide’s business. The specific responsibilities and competencies of the Innovation and Technology Committee are set forth in section 5.4 of the Organizational Regulations as well as the Innovation and Technology Committee Charter.

The members of the Innovation and Technology Committee are appointed by the Board of Directors. The chairman of the Innovation and Technology Committee shall be independent. As of 31 December 2021, the Innovation and Technology Committee consisted of two members (Jane Salik and Patrick Aebischer) and was chaired by Patrick Aebischer.

2021 Innovation and Technology Committee meetings and key topics

Since 29 April 2021, the Innovation and Technology Committee met two (2) times, in a combination of in person sessions and video conferences, for an average duration of approximately two hours.

During the course of 2021, the key topics discussed by the Innovation and Technology Committee included, among other things:

• Objectives, goals and scope of the Innovation and Technology Committee
• Discussion and selected deep-dives into PolyPeptide’s four pillars of innovation (i.e., Green Chemistry and Processes, Business Development, Digitalization and Process & Analytical Performance)
• Considerations regarding potential strategic collaborations, access to experts and new business areas

3.6 Areas of responsibility between the Board of Directors and the Executive Committee

The Board of Directors’ responsibilities, duties and competencies and the procedural principles by which it is governed are specified by Swiss law, art. 17 of the Articles of Association and sections 2 through 5 of the Organizational Regulations. Importantly, the responsibilities of the Board of Directors include determining the strategy of PolyPeptide as well as the appointment, supervision and dismissal of the members of the Executive Committee.

According to art. 17 of the Articles of Association and in addition to the non-transferable and irrevocable duties set out in art. 716a CO, the Board of Directors has the further non-transferable and irrevocable duties to (i) adopt resolutions and amendments to the Articles of Association regarding the subsequent payment of capital with respect to non-fully paid-in shares, (ii) adopt resolutions and amendments to the Articles of Association in relation to increases in share capital, (iii) examine compliance with the legal requirements regarding the appointment / election of the external auditors, and (iv) execute the agreements pursuant to art. 12, 36 and 70 of the Federal Act on Merger, Demerger, Transformation and Transfer of Assets (Merger Act).

While the Board of Directors is responsible for PolyPeptide’s ultimate strategic direction and supervision of management, through the Organizational Regulations the Board has delegated the responsibility and authority necessary or appropriate to carry out the day-to-day and operational activities of PolyPeptide to the Executive Committee under the leadership of the CEO. Nevertheless, the Board of Directors retains certain duties (in addition to the non-transferable and irrevocable duties described above), such as annually approving the budgets and business plans for the Group, monitoring risks as well as ensuring that fundamental policies and controls are in place for compliance with applicable law and regulations. In addition, the Organizational Regulations set out specific parameters, including financial thresholds, for certain strategic, operational and financial matters that remain within the competence of the Board of Directors. This information is also set out in an authority chart, which is an annex to the Organizational Regulations.

The Executive Committee is responsible for ensuring the execution of the decisions of the Board of Directors and implementing the strategy of PolyPeptide in accordance with Swiss law, the Articles of Association, the Organizational Regulations and the resolutions of the shareholders' meeting. The Executive Committee is led by the CEO and comprises the CEO, CFO, the Director of Global Sales and Marketing, the Director of Global Operations and the General Counsel, and such other officers as may be determined by the Board of Directors, in consultation with the CEO, from time to time. The Executive Committee has a dual function in the management of PolyPeptide. On the one hand, under the leadership of the CEO, the Executive Committee is responsible for the day-to-day business of the Company (to the extent not reserved to the Board); and, on the other hand, it is responsible for the operational business of the whole Group as well as of each individual site and subsidiary (to the extent that the respective competences are not reserved to the Board or are, by law, reserved to the boards of directors of the subsidiaries).

Pursuant to the Organizational Regulations, the CEO is appointed and removed by the Board of Directors upon recommendation of the Remuneration and Nomination Committee. The other members of the Executive Committee are appointed and removed by the Board of Directors upon recommendation of the Remuneration and Nomination Committee and in consultation with the CEO.

3.7 Information and control instruments vis-à-vis the Executive Committee

3.7.1Principles of Board information

The Board of Directors has different information instruments in place to oversee, monitor and control the implementation of PolyPeptide’s strategy as well as the execution of the responsibilities delegated to the Executive Committee.

Specifically, the Organizational Regulations require the CEO, together with the other members of the Executive Committee, to regularly inform the Board and its Committees at its meetings on the current course of business and all major business matters, including anticipated opportunities and risks. In addition, the Chairman and the CEO are in contact at regular intervals with respect to all major corporate policy issues. Extraordinary matters, including significant unanticipated developments, must immediately be reported to the Chairman. In addition, the Directors shall be informed immediately of extraordinary events by way of circular letter or, if necessary, in advance by telephone, e-mail or facsimile.

Furthermore, each Director is entitled to request information concerning all of PolyPeptide’s affairs reasonably necessary to fulfill his or her fiduciary duties. For Directors requiring information or wishing to review documents outside of ordinary Board meetings, he or she must address his or her request in writing (including by e-mail) to the Chairman. To the extent necessary to fulfill his or her duties, each Director may further request in writing (including by e-mail) that the Chairman authorizes the inspection of the books and records of the Company. If the Chairman rejects a request for information, hearing or inspection, the Lead Independent Director or the Board shall decide whether to grant such request.

3.7.2Regular reports to the Board

As noted above, the Executive Committee regularly reports to the Board of Directors and its Committees at their respective scheduled meetings. In addition to these meetings, on a monthly basis the Board of Directors receives a financial report with (i) an executive summary, (ii) an assessment of the Group’s monthly and year-to-date revenue, (iii) the profit and loss statement, the balance sheet and the cash flow statement, (iv) a capital expenditure overview, (v) site financial performance overviews as well as (vi) Group KPIs, a summary of the business performance, updates on various initiatives and the Group’s outlook. These monthly reports illustrate the actual financial results to-date, along with comparisons to the previous period and the budgeted amounts, all with accompanying commentaries. Directors often react to these reports with questions that are responded to by the CFO. In addition, through the Audit and Risk Committee, the Board receives the reports of PolyPeptide’s external auditor for the full-year results and procedures performed on the half-year results.

3.7.3Enterprise Risk Management Framework

During the course of 2021, the Audit and Risk Committee, together with the CFO and members of the finance team, began implementing an Enterprise Risk Management Framework. With the assistance of a consultant, the Group has initiated a risk assessment and has begun evaluating relevant strategies to address the risks identified. While the Board of Directors retains the ultimate responsibility for risk management and for determining the appropriate level of risk that PolyPeptide is willing to accept, the Executive Committee (together with the Audit and Risk Committee) will be responsible for ensuring that the operation of the risk management framework is sound, including risk management of significant risks.

Going forward, the CFO together with the General Counsel, our newly hired Chief Information Security Officer (who joined the Group in February 2022) and other internal stakeholders will prepare an annual risk assessment report to be submitted at least once per year to the Audit and Risk Committee. In addition, the risk assessment report will be presented to the Board of Directors at one of their scheduled meetings for a deep-dive focus and discussion on risk assessment and management.

The risk assessment reports will be designed to provide a consistent, Group-wide perspective of key risks as well as any other risk areas as they are subsequently identified in the Enterprise Risk Management Framework. The objective of these risk assessments is to (i) make the principal risks to which PolyPeptide is exposed more transparent, (ii) determine treatment measures to control, eliminate and/or exploit the level of the risks while monitoring their effectiveness and (iii) ultimately improve risk management. To the extent that the ongoing evaluation of the Enterprise Risk Management Framework discovers any significant unanticipated developments, the CFO will immediately report these to the Audit and Risk Committee and the Chairman of the Board. The Directors must also be informed of extraordinary events (as described above).

See also “Risk management and internal audit” in the Business Review chapter of this Annual Report 2021.

3.7.4Internal controls

The Board of Directors is also responsible for designing, implementing, and maintaining the Group’s internal control system, which provides the ultimate oversight for PolyPeptide’s strategy, operations and finances. The Audit and Risk Committee supports the Board of Directors through the assessment of the adequacy and effectiveness of the Group's internal and prudential systems and controls in respect of both financial and non-financial risks, including through discussions with and reviewing reports from the external auditor, internal officers and management. PolyPeptide’s internal control system is structured to ensure the correct disclosure and adequate coverage of control over all Group activities, with particular attention on areas considered potentially at risk. The external auditor confirms the existence of the internal control system in connection with the year-end audit.

According to the Organizational Regulations, the CFO, in cooperation with the CEO, ensures good financial governance, overseeing all financial planning, budgeting (short- and mid-term), reporting and risk management activities. Furthermore, the CFO leads the implementation of systems and procedures to seek compliance with regulatory requirements for financial information, reporting, disclosure requirements and internal control. The CFO and the Audit and Risk Committee regularly evaluate the risks of material misstatements in the consolidated financial statements and assess if the risks are reduced to an acceptable level by established and planned mitigating controls and processes. Significant risks are also continuously discussed in the meetings of the Executive Committee and the Audit and Risk Committee, which both take place on a regular basis. In 2021, the Audit and Risk Committee focused on five key areas of internal controls, specifically (i) revenue, (ii) inventories, (iii) payroll, (vi) property, plant and equipment and (v) financial reporting and closing processes. During the course of 2021, the Audit and Risk Committee, together with the CFO and members of the finance team, evaluated key risks of financial misstatements in the identified key areas together with mitigating controls / processes currently in place, all of which were reviewed by the external auditor. In addition, improvement suggestions are submitted by the external auditor on a yearly basis, which are implemented by management in the following year.

3.7.5Internal Audit

The Board of Directors, through the Audit and Risk Committee, will be further supported by a newly established Internal Audit function in 2022. The Internal Audit’s mission is to ensure that PolyPeptide’s operations are conducted according to high standards by providing an independent, objective assurance function and by advising on best practice. Through a systematic and disciplined approach, Internal Audit will help us accomplish PolyPeptide’s objectives by evaluating and improving the effectiveness of our risk management, control and governance processes. As is customary across the industry, the evaluation and internal audit of our GMP activities will remain with our Quality department under the supervision of our Director Global Quality.

Internal Audit will be responsible for, among other things, (i) developing and implementing annual audit plans using appropriate risk-based methodology, (ii) evaluating and assessing significant merging / consolidating functions and new or changing services, processes, operations, technologies and control processes at the time of their development, implementation or expansion, (iii) establishing an Internal Audit quality assurance program to ensure high standards of operations, (iv) issuing periodic reports to the Audit and Risk Committee as well as the Executive Committee, (v) participating in any investigations at PolyPeptide and (vi) recommending appropriate actions to correct any deficiencies identified. Further information on the responsibilities of Internal Audit can be found in the Internal Audit Charter, which is an annex to the Organizational Regulations.

3.7.6Compliance controls

At PolyPeptide, we are committed to the highest levels of ethics and integrity in the way that we do business. We understand that this is crucial to our continued success and reputation. Our values and Code of Business Conduct and Ethics guide our everyday conduct, and to monitor our commitment, the General Counsel shall be or shall designate another person as the Group’s governance, risk and compliance officer (“GRC Officer”). Currently, the General Counsel serves as the GRC Officer.

The GRC Officer is responsible for developing and maintaining compliance policies, promoting a culture of responsibility, maintaining risk management, identifying remediation needs, providing training and taking other steps to assist the Group in meeting its legal, regulatory and ethical obligations. The GRC Officer reports to the CEO. However, the GRC Officer also has direct access to the Audit and Risk Committee and reports to the Audit and Risk Committee whenever requested or if there exists a significant compliance or risk issue that involves or implicates a member of the Executive Committee which the GRC Officer believes cannot be or has not been appropriately addressed by, or directly implicates, the CEO.

During the course of 2021, we implemented various compliance initiatives and are in the process of expanding these to respond to PolyPeptide’s ever-changing dynamic business environment. For example, PolyPeptide recently introduced an electronic learning tool aimed at reinforcing our Code of Business Conduct and Ethics. In addition, we also recently launched a whistleblower program and hotline where anybody with knowledge or suspicion of illegal activities or serious irregularities at PolyPeptide can report these observations confidentially and even anonymously. To ensure independence, PolyPeptide has mandated the operation of its whistleblower hotline to a third-party service provider. The implementation of these compliance measures is supervised by and regularly reported to the Audit and Risk Committee.

3.7.7Quality assurance

To oversee and monitor our quality assurance, the CEO has designated a Director Global Quality who reports to the CEO and formed part of the Extended Group Management¹⁴ in 2021. The Director Global Quality supervises the Group's quality control and quality assurance functions and is responsible for setting, reviewing, monitoring, revising and implementing the Group's quality management, quality control systems and quality assurance programs to comply with regulatory requirements and ensure high quality products, processes and related customer support. In addition, the Director Global Quality is responsible for providing results-oriented leadership to sustain and improve an effective and efficient international quality organization comprised of quality operations, quality systems, supplier quality and quality control / analytical development subject matter domains. Currently, Landon Piluso serves as the Director Global Quality.