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Galapagos’ corporate governance policies

As a listed company with its registered office at Mechelen (Belgium), Galapagos NV is required to apply the Belgian Code of Companies and Associations (the "Belgian Companies Code") and the 2020 Belgian Corporate Governance Code (the “2020 Code”). Both entered into force on 1 January 2020.

For the reporting year beginning on 1 January 2021, the 2020 Code was our reference code. On 28 April 2020, following the amendment of our articles of association as a consequence of the then newly applicable Belgian Companies Code, Galapagos' supervisory board approved an updated corporate governance charter (which is available on our website, www.glpg.com). The corporate governance charter applies in addition to the law, Galapagos' articles of association and the corporate governance provisions included in the Belgian Companies Code and the 2020 Code. It describes the main aspects of corporate governance at Galapagos, including its governance structure, the terms and functioning of the supervisory and management board and its committees, and the rules of conduct.

For the reporting year beginning on 1 January 2021, the supervisory board strove to comply with the rules of the 2020 Code and no deviations from the provisions of 2020 Code occurred. As a result, this corporate governance statement does not contain any section making reference to the “comply or explain” principle.

Our governance structure

The 2020 Code requires companies to make an explicit choice for one of the governance structures provided for in the Belgian Companies Code. As of 28 April 2020, Galapagos has a two-tier governance structure as provided by the Belgian Companies Code, with the supervisory board replacing the board of directors, and the management board replacing the executive committee.

Two-tier governance structure

Two-tier Governance Structure (graphic)

The supervisory board is responsible for the general policy and strategy of the company and has all powers which are specifically reserved for it under the Belgian Companies Code. The supervisory board also supervises the management board. The management board exercises all powers which are not reserved for the supervisory board in accordance with the Belgian Companies Code.

The supervisory board has established an audit committee and a nomination and remuneration committee. Both have an advisory function. Finally, the management board has delegated the daily management of the company to one management board member, i.e. its Chief Executive Officer.

In addition to the information set out below, we refer to the Risk management and Risk factors sections of this report for a description of the most important characteristics of our internal control and risk management systems. The Risk management and Risk factors sections are incorporated by reference in this corporate governance statement.

Proposed change of governance structure

In light of the recent leadership transition, the supervisory board reviewed whether the chosen governance structure is still appropriate and decided to propose a new governance structure to the general shareholders’ meeting, being a one-tier governance structure, consisting of a board of directors and an executive committee to which certain powers are delegated by the board of directors. On the date of this report, our articles of association have not yet been amended. The supervisory board invites the shareholders of Galapagos to approve the introduction of a one-tier governance structure at the occasion of the extraordinary shareholders’ meeting to be held on 26 April 2022.