Sustainability Report 2015
Management structure
As a European Company (Societas Europaea – SE) based in Germany, the formal structure of corporate governance at Hannover Re is determined by national law. The fundamental hallmarks of corporate governance are a two-tier system with its transparent and effective split into the management of the company (Executive Board) and its oversight (Supervisory Board). Overall responsibility for enterprise management and Group-wide risk management as well as for the definition of the risk strategy rests with the Executive Board of Hannover Re. The Supervisory Board takes responsibility for advising and monitoring the Executive Board in its management of the company and also with respect to risk management. In accordance with the principle of co-determination, the Supervisory Board is made up of representatives of the shareholders and the employees. The shareholders exercise their rights of co-administration and supervision in the context of the General Meeting.
Composition of the Executive Board
The Executive Board of Hannover Re is composed of seven members, who are appointed by the Supervisory Board. Along with their qualifications, the Supervisory Board also pays attention to diversity in the selection of members of the Executive Board. In view of currently ongoing Board contracts, Hannover Re has set itself a target of zero for the quota of women on the Executive Board by 30 June 2017. In case of an appointment of a new member of the Executive Board, the Supervisory Board shall give preference to a potential female candidate in case of equal personal aptitude and professional qualifications.
Composition of the Supervisory Board
The Supervisory Board of Hannover Re consists of nine members. They are appointed for a term of office until the end of the General Meeting that ratifies the acts of management for the 2018 financial year. Pursuant to statutory requirements and the Participation Agreement, the employees are represented by three members. Given that members of the Supervisory Board cannot at the same time belong to the Executive Board, a high degree of independence in the oversight of the Executive Board is assured.
When it comes to selecting the shareholder candidates who are proposed to the General Meeting for election to the Supervisory Board, care is taken to ensure that the individuals in question have the necessary knowledge, abilities and specialist experience. The anticipated commitment to a sustainable increase in the value of the company is similarly a central criterion in the selection of candidates. The principle of diversity is also taken into account when making a selection. Allowing for the term of appointment of the Supervisory Board, Hannover Re has therefore determined that it will achieve a target quota of 30% for women on the Supervisory Board by 30 June 2017.
In order to deal with complex matters and depending on the specific circumstances of the company, the Supervisory Board forms committees under its Rules of Procedure. These are currently the Standing Committee, the Finance and Audit Committee and the Nomination Committee. Appointments to the committees are crucially guided by the respective specialist aptitude required by the committee members.
In addition, ad hoc training activities are held as necessary in order to further enhance the expertise of the Supervisory Board. Thus, for example, training was provided for the Supervisory Board in 2016 in connection with the implementation of the new solvency regime Solvency II.
Avoidance of conflicts of interest
The avoidance of conflicts of interest is ensured through the control mechanisms stipulated in law and in the Articles of Association that exist between the three governance bodies. In order to assure the provision of independent advice to and oversight of the Executive Board by the Supervisory Board, no more than two former members of the Executive Board shall belong to the Supervisory Board. Members of the Supervisory Board may not undertake any executive role or consulting functions at significant competitors of the company.
Avenues for dialogue on critical issues
As a general principle, all Hannover Re's stakeholder groups have the opportunity to report potentially critical issues to the company's highest governance body. Within the framework of Hannover Re's established governance structures, critical concerns – including in relation to sustainability matters – are communicated on an ongoing basis to both the Executive Board and the Supervisory Board.
The shareholders of Hannover Re exercise their co-determination right at the Annual General Meeting of the company, in particular through the appointment of members of the Supervisory Board, the ratification of the acts of management of the Executive Board and the Supervisory Board, the resolution on profit appropriation and through their right to ask questions and obtain information.
The right of the employees to have their say in the company is ensured through the SE-Employee Council, the joint German Employee Council of Hannover Re and E+S Rück and through the three employee representatives on the Supervisory Board elected by this joint Employee Council.