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Legal framework
Our Group Legal department continuously monitors and assesses requirements arising out of the applicable legal framework, and it evaluates legally relevant changes and their implications for internal processes and policies. Ongoing legal monitoring is carried out for particularly relevant compliance issues by various specialist departments.
The Act for the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector, which had already entered into force in 2015, constituted a significant change in the legal framework affecting environmental or social aspects in the year under review. In accordance with the Act for the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector, the Supervisory Board of the company was required by 30 September 2015 to define a target quota for women on the company's Supervisory Board and Executive Board in the period until 30 June 2017. After extensive deliberations the Supervisory Board decided, in due consideration of the term of office of the Supervisory Board and the current mandates and contracts of service of the members of the Executive Board, to define within the specified period – without prejudice to possible decisions to the contrary that may be taken as warranted when the time comes – a target quota for women on the Supervisory Board of 30% and an anticipated continued quota of zero for the Executive Board. Should events result in the currently unforeseeable 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.
In addition, we monitored the development of the Act to Strengthen Companies' Non-Financial Reporting in their Management Reports and Group Management Reports (CSR Directive Implementation Act) and initiated appropriate measures for implementation of the law after its entry into force at the beginning of 2017.
Conduct of energy audits
By means of the Act on Partial Implementation of the European Energy Efficiency Directive dated 15 April 2015 the Federal Republic of Germany enacted into law the mandatory conduct of regular energy audits at large enterprises. Under the legislation, large enterprises that have a turnover of more than EUR 50 million and employ more than 250 staff are now required to conduct an energy audit for the first time by no later than 5 December 2015 and every four years thereafter. An exemption from the obligation to carry out an energy audit is available solely for companies that have an energy management system in accordance with DIN EN ISO 50001 or for those that have successfully implemented a validated environmental management system as defined by the directive, known specifically as EMAS III (Eco-Management and Audit Scheme), or have concrete plans to do so by the stipulated deadline. With this in mind we decided in 2015 to convert the existing environmental management system according to DIN EN ISO 14001 to the more comprehensive environmental management system EMAS in 2016 and, going forward, to publish an annual EMAS III environmental statement in the EMAS Register and on our website.
Tax framework
As a globally operating reinsurance undertaking, we are subject to the tax laws of the respective national legal systems. We pay the incurred taxes according to the applicable legal provisions of the countries in which we operate.
The tax expenditure of our company in the 2016 financial year was EUR 65.0 million lower than in the previous year at EUR 391.2 million (previous year: EUR 465.2 million). This change is largely attributable to the decrease in pre-tax profits compared to the previous year. In addition, unlike in the previous year there was no effect associated with a change in trade tax. The effective tax rate amounted to 24.2% (previous year: 27.3%).
In order to ensure that going forward, as in the past, we continue to file complete and correct tax returns on a timely basis despite the growing complexity of tax claims from our international operations, we are currently working on implementation of a "Tax Compliance System". In this regard it is necessary to identify all relevant task areas and responsibilities, set out clear rules for them in a company-wide guideline and translate them into practice in the context of processes. The task areas in question are not exclusively those handled by the Taxation Department. In May 2017 our new Group Tax Guideline was adopted with this in mind.