Culture

Markus Flik, Ph. D. Chief Executive Officer:

Recently I was asked how it is that Behr has consistently been able to outperform its competitors, year after year. I started to think about it: Was it our products? That had to be a major factor. Or Behr’s know-how and processes? They are important too. Is it our people? They are even more important. But what is it that holds all these elements together? I believe it is the inner strength of our company that empowers us to master our challenges – that won’t let us give up, and that enables us to achieve the seemingly impossible. And that inner strength is based on our corporate culture, our cultural fitness.

The overriding feature defining the company is our independence. Only by being independent are we able to bring the Behr culture to life through our actions, free of external influences. This distinctive culture enables us to attract skilled, highly committed staff and to further develop their expertise within the company. It also drives our successful partnerships. This translates into maximum performance, thus allowing us to achieve profitable growth. And profitable growth, i.e. economic success, is in turn the foundation of our independence. And so we come full circle: the Behr culture is both the cause and the effect of our company’s independence. Our customers are the focus of everything we do. It is our economic success and independence that make us such a reliable partner for them. They also sense our culture and enjoy working with us as their performance partner. Our skilled and highly motivated staff and our partners represent the depth and breadth of our competence in components, modules and systems. Customers sense our Behr culture through the performance we deliver.

So, quite clearly, our Behr culture drives maximum performance through

• Entrepreneurial spirit and creativity
• Discipline and professionalism
• Teamwork and team spirit
• Respect for the individual

and is therefore the basis of our success.

What constitutes a description of our culture? It is made up of

• The Behr Way, i.e. how we work together each day, on the job
• The Behr Values that guide our actions
• Our Leadership Model, which comprises

Leadership principles

Characteristics of a Leader, and

Leadership actions.

This document describes our culture as it was defined at the Group Forum 2006. I would like to make two additional comments:

• Some of the points mentioned are already fully lived at Behr. In other cases, there is still room for improvement. It is up to each and every one of us to reflect on these points, and tell each other about how we are going to live up to these commitments.
  
• The key to making our culture a reality is not the written word, but the extent to which each of us lives those words in practice, time and time again, day after day, as a real and lasting commitment. And again, sharing our ideas and experiences is crucial.

Our company has to compete with corporate giants with huge financial resources, and also in some areas with agile, midsize enterprises. And clearly, Behr is also changing: with our major initiative in North America, our expansion in Eastern Europe and South Africa, and the business activities we are setting up in India, China and Japan — plus the extension of our product range. All these changes make this an ideal time to refocus and further develop our corporate culture.

Furthermore, we have now grown to a size and global presence that requires us to set up some structures of the kind often found in large corporate groups. But we also have to do our very best to retain the advantages of a midsize company, i.e. speed, flexibility, and pragmatism. This is the "happy medium" that will define our culture as a company.

This culture is not some kind of blueprint, to be put into practice in exactly the same form all around the world. There are bound to be local variations, and that’s just the way it should be. But behind this local diversity, the Behr Way, our values and our leadership model should still be clearly recognizable.

The Behr culture is the glue that will hold the company together as we grow. Our task is to work together to make the contents of this document a reality. It is in our joint interest to do verything we can to build this work environment. And remember, the key to success lies within each and every one of us, and that is exactly where the effort should begin.

Version: March 2007