Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006 Management report_Corporate governance report
Corporate governance report *
It is our conviction that good corporate governance
creates lasting value. We therefore apply the highest
standards to our operations and activities, complying
with all the recommendations of the German Corporate
Governance Code. Beyond this, we have our own Munich
Re Code of Conduct specifying ethical and legal requirements
that must be met by employees.
How we view corporate governance
Corporate governance stands for a form of responsible
company management and control geared to long-term
creation of value. Of particular importance to us in this
context are the promotion of shareholders’ interests, efficient
practices on the Board of Management and Supervisory
Board, good collaboration between these bodies,
and open and transparent corporate communications.
Continually improving our good corporate governance
is an important principle underlying our business activities.
What rules apply to Munich Re?
With its international organisation, the Munich Re Group
has to consider corporate governance rules in different
national legal systems. Clearly, we observe not only the
respective national standards but also internationally
recognised best practices. In Germany, where Munich Re
has its headquarters, corporate governance rules are laid
down above all in the German Stock Companies Act, the
German Co-Determination Act and the German Corporate
Governance Code. The latter, which entered into force in
2002 and has since been amended several times, contains
the main legal rules that must be observed by German
listed companies. In addition, it includes recommendations
and proposals based on nationally and internationally
recognised standards of good and responsible management.
Every year, Munich Re’s Board of Management and
Supervisory Board publish a declaration stating how far
the Code’s recommendations have been complied with.
The 2006 declaration of conformity can be found on
page 113.
Corporate legal structure
Munich Re is a joint-stock company (”Aktiengesellschaft”)
within the meaning of the German Stock Companies Act. It
has three governing bodies: the Board of Management, the
Supervisory Board and the Annual General Meeting. Their
functions and powers are derived from this Act and the
* Joint corporate governance report of the Board of Management and
Supervisory Board in accordance with item 3.10 of the German Corporate
Governance Code.
Articles of Association. This means that our Articles of
Association (which can be accessed on our website at any
time) are of considerable importance.
Statutory regulations and provisions in the Articles of
Association concerning amendments to the Articles
The German Stock Companies Act contains general provisions
governing amendments to the Articles of Association
(Sections 124 paragraph 2 sentence 2, and 179–181 of the
Act). These state that only the Annual General Meeting can
make resolutions on changes to the Articles of Association.
In order to be carried, a resolution must receive at least
three quarters of the votes cast by the share capital represented
in the vote. The Articles of Association may stipulate
a different capital majority (higher or lower) or other
requirements, but Munich Re’s Articles of Association do
not provide for any such special features.
The German Stock Companies Act contains special
regulations on amendments to the Articles of Association
where increases and reductions in share capital are concerned
(Sections 182–240 of the Act). Under these regulations,
all resolutions on capital measures are generally to
be made by the Annual General Meeting. Within a selfdetermined
scope, however, the Annual General Meeting
can authorise the Board of Management to initiate certain
(capital) measures (see page 100 for the authorisations
relating to Munich Re). In all such cases, a resolution of the
Annual General Meeting is required that has been adopted
by at least a three-quarter majority of the share capital
represented in the vote. Where these resolutions are concerned,
Munich Re’s Articles of Association again do not
provide for other (i.e. higher) majorities or further requirements.
The Annual General Meeting is entitled to transfer to
the Supervisory Board the authority to make amendments
to the Articles of Association that affect only the wording
(Section 179 paragraph 1 sentence 2 of the German Stock
Companies Act). This is the case with Munich Re and has
been regulated in Article 14 of the Articles of Association.
Board of Management
Duties and responsibilities of the Board of Management
The Board of Management is responsible for managing the
Company. In doing so, it must safeguard Company interests
and endeavour to achieve a long-term increase in the
value of the Company.
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