ARYZTA : Corporate Governance Report

ARYZTA AG Annual Report 2022

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Corporate Governance

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Letter from the Lead Independent Director and Chair of the

Governance & Nomination Committee

Dear Shareholder,

On behalf of the Board of Directors of ARYZTA AG, we wish to thank you for the overwhelming support and trust that you have placed in the Board.

The Board is very pleased with the Group's progress in the past fiscal year and we hope that you, as shareholders, welcome the transformation. The Group is now a better performing, leaner and more efficient company. We have faced and continue to face a very challenging macro environment with unprecedented inflation, war in Ukraine, COVID pandemic and BREXIT. In the circumstances, the Board is firmly of the view that under the leadership of Urs Jordi as interim CEO, we have the right executive management team in place to deliver the Group's transformation.

As the Lead Independent Director and Chair of the Governance and Nominations Committee ("NomCo"), we are pleased to inform you that following the request of the Board, Urs Jordi has agreed to continue in the dual role of Chair and interim CEO. We want to update you on the Board's decision to request the Chair, Urs Jordi, to continue as interim CEO.

Background

The roles of Chairman and CEO were initially combined as a dual mandate at the end of 2020 following an active investor campaign which led to the re-organization of the management. It was clear to the Board at that time that Urs Jordi was the best placed to take on the role of interim CEO considering his:

• extensive international experience of the food business and specifically the B2B frozen bakery industry;
• knowledge of the Company thanks to his prior experience in the Group;
• Leadership skills and proven track record in initiating and successfully delivering operational improvements;
• high approval rating for his appointment and re-election as Chairman with support from significant investors and stakeholders.

The Board's view is that the delivery of the latest results demonstrate that this decision, combined with the robust governance processes in place, was the correct one for all stakeholders.

Governance processes - Jörg Riboni (Lead Independent Director)

In order to best support the dual mandate, the Board first decided to appoint a Lead Independent Director ("LID") in November 2020. This appointment was made in line with the Swiss Code of Best Corporate Governance practices and together with the support of external independent legal advice, the Board prescribed specific powers and responsibilities for the LID as set out in our Organizational Regulations.

Governance

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The Board appointed me as LID following the AGM in 2021. In my role of LID, I convene frequent non-executive board sessions with the other four independent non-executive members of the Board. In accordance with the Organizational Regulations, I am empowered to hold a non-executive session, without the presence of the Group CEO, at any time

to discuss any matters. In addition to the appointment of the LID, for good governance purposes, the Board ensures that the Chairman is not a member of any of the main Board Committees. Further, I am satisfied that all non-executive board members have significant international business experience in board and executive roles and demonstrate and express independence of judgement, in line with the Swiss Code on Good Corporate Governance.

Recruitment Process - Gordon Hardie (Chair of NomCo)

I was appointed Chair of the Governance and Nomination Committee ("NomCo") in November, 2021. My predecessor had initiated the CEO recruitment process in 2020 and had appointed an external independent recruitment firm to support the NomCo and Board in conducting this important recruitment search. Once appointed as Chair of NomCo and with the support of my NomCo committee members, I continued to progress this recruitment search. Over the course of 2021, we interviewed several potential candidates leading to a shortlist of candidates who were interviewed by the Board. The Board was keen to identify a candidate with (i) proven track record in delivering operational transformation; (ii) in-depth knowledge of and senior management experience in the food industry; (iii) multi-year revenue growth; and (iv) strengthening the capabilities needed to be competitive in the future.

While the Board met with a number of candidates, given where the business is in terms of its turnaround progress, the extraordinary challenges of the new inflationary environment, rises in the price of energy, raw materials, interest rates and a potential economic slow down, the Board is convinced that it is in the best interests of the business and its key stakeholders

to preserve the stability and momentum of the current leadership. Urs Jordi has the ideal skillset and track record to lead the team through the turnaround phase. The Board is satisfied that it will then be in the best interests of the business to appoint a CEO who can focus on delivering the next stage of development of the business.

The Board has full confidence in Urs Jordi in his role as Chairman and interim CEO and the governance processes which it has put in place to ensure that any potential conflict issues are addressed.

In light of the above, the Board believes it is the right and prudent decision to temporarily extend the dual role and continue the surrounding governance oversight mechanisms. The Board believes this is in the best interest for all stakeholders.

Governance

Jörg Riboni, Lead Independent Director	Gordon Hardie, Chair NomCo
30 September 2022	30 September 2022

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Corporate Governance at ARYZTA

As a Board, we are committed to strengthening the corporate governance standards and practice at ARYZTA to deliver against the expectations of all stakeholders. Driving this approach is a Board that is focused on delivering the highest standards of governance.

During FY 2022, the Board has continued to work on improving our corporate governance practice in line with the principles of the Swiss Code of Best Practice for Corporate Governance ("Swiss Code for Corporate Governance"), including the appointment of

a Lead Independent Director and commencing a thorough review of the governance framework, policies and practices.

We are focused on ensuring meaningful and transparent reporting and on continuing to strengthen our governance processes in order to deliver lower governance risk, grounded in our values and governance framework. We commit to all stakeholders that our long term performance and high governance standards will go hand in hand.

ARYZTA Board and Executive Management

There was no significant change to the Board of Directors of ARYZTA AG (the 'Board') and

Executive Management in the 2022 financial period.

At the Annual General Meeting (AGM) held on 17 November 2021, Urs Jordi was reelected as Chair of the Board while Gordon Hardie, Heiner Kamps, Jörg Riboni, Hélène Weber-Dubi and Alejandro Legarda Zaragüeta were all re-elected as directors of the Board. In September 2021, Luisa Delgado informed the Board of her decision not to stand for re-election at the AGM and the Board expresses its gratitude for her services to the company. Gordon Hardie, Heiner Kamps and Hélène Weber-Dubi were all re-elected as members of the Remuneration Committee.

With effect from the conclusion of the 2021 AGM, the Board is comprised as follows: Urs Jordi (Chair), Gordon Hardie, Heiner Kamps, Jörg Riboni (Lead Independent Director), Hélène Weber-Dubi and Alejandro Legarda Zaragüeta. Full biographical details of each director are set out on pages 36 to 37.

The Swiss Code of Best Practice for Corporate Governance ('Swiss Code for Corporate Governance') recommends the appointment of a Lead Independent Director, if for reasons specific to the company, or because the circumstances relating to availability of top management, makes it appropriate that the Board decides that a single person should perform both positions. The Board introduced the role of Lead Independent Director in November 2020 following the appointment of the Chair of the Board as the Interim Group CEO. Following the November 2021 AGM, the Board appointed Jörg Riboni as Lead Independent Director. Mr Riboni is a highly experienced non-executive director and is also the Chair of the Audit Committee. Given the dual role mandate of Chair and Interim Group CEO, the Board decided that the Chair would not sit on any of the main Board Committees nor does he attend the non-executive Board member meetings unless specifically invited.

In accordance with good corporate governance, the Lead Independent Director is authorised to convene and chair meetings of the Board on his own, if necessary. Further, the Lead Independent Director is authorised to assess the work of the Group CEO or any matter involving the Group CEO's conduct or capacity, the decision on the compensation

Governance

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Corporate Governance Report (continued)

package of the Group CEO and decision on the Board's proposal to the General Meeting for the re-election of the Chair. The role of the Lead Independent Director and his duties are set out in detail in the Organizational Regulations of ARYZTA AG (available on the ARYZTA website https://www.aryzta.com/about-aryzta/corporate-governance/).

We believe that ARYZTA AG has the requisite expertise and skills in place at Board level to oversee and support senior management's implementation of our multi-local turnaround plan.

During the period from 31 July 2021 through July 30 2022, the Executive Management comprised as follows: Urs Jordi (Interim Group CEO); Martin Huber (Group CFO) and Rhona Shakespeare (nee O'Brien) (General Counsel and Company Secretary).

Leadership

The Board

The Board is responsible for stewardship, governance and oversight, and for setting the strategic direction of ARYZTA, in order to deliver sustainable value. The Board is also responsible for defining risk appetite and risk mitigation/management. The Board is committed to the highest standards of corporate governance in its management of ARYZTA and its accountability to shareholders and other stakeholders. Strong leadership and strong corporate governance are integral parts of our corporate culture and the Board recognises its obligation to lead by example. Biographical details of the directors are provided on pages 36 to 37.

Board Independence

All non-executive directors are considered by the Board to be independent in character and judgement within the meaning of the Swiss Code for Corporate Governance and none of the non-executive directors are party to relationships or circumstances with ARYZTA which, in the Board's opinion, are likely to affect their independence or judgement. All of the current Board members are independent non-executive directors, with the exception of the Chair who is Interim Group CEO. The Board considers this dual role as an interim solution. The Board is very pleased with the rapid progress on the Group transformation in the relatively short time frame.

To ensure the effective oversight of financial reporting, risk management, remuneration and the future leadership of the business, the Board delegates certain functions to three main Board Committees. Further details on the role of these key Committees are provided on pages 40 to 42.

The Chair

The Chair is responsible for the effective leadership, operation and governance of the Board and its Committees. It is the Chair's responsibility to ensure that all directors contribute effectively in the development and implementation of the Group's strategy, whilst ensuring that the nature and extent of the significant risks the Group is willing to embrace in the implementation of its strategy are assessed, challenged, justified and where appropriate, accepted.

Governance

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Corporate Governance Report (continued)

Lead Independent Director

In line with the Swiss Code for Corporate Governance guidance, the Board first appointed a Lead Independent Director in November, 2020. The Swiss Code for Corporate Governance recommends a Lead Independent Director if there is a dual role of Chair and CEO. The Organizational Regulations were amended in November 2020 to establish the role and responsibilities of the Lead Independent Director. Following the 2021 AGM, Jörg Riboni was appointed as Lead Independent Director. Please see our Organisation Regulations on our website: https://www.aryzta.com/about-aryzta/corporate-governance/

Governance Framework

Details of the corporate governance framework adopted by ARYZTA (namely the Articles of Association, the Organisational Regulations and the Terms of Reference for the Committees of the Board) are available on the ARYZTA website at www.aryzta.com/ about-aryzta/corporate-governance.

Management

Board.

Supervisory

Board and

committees

Transparency	Values and
and
Ethics
Accountability
	Corporate
	Governance
Risk and	Policies &
Performance	Regulatory
Management	Framework
	Monitoring
	and internal
	control

Governance and Culture

As a Board, we are committed to ensuring we adhere to best-practice corporate governance principles and apply them in a pragmatic way that adds value to ARYZTA. Continually enhancing our corporate governance is central to our aim of ensuring the stability of ARYZTA and returning the business to a satisfactory level of performance and growth.

Governance