Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006
Internal regulation of the Board of Management
Munich Re’s Board of Management had 11 members at the
end of the 2006 financial year. It was trimmed down to nine
members as of 1 January 2007, with a further reduction to
only eight members as at 1 March 2007. Pursuant to Article
16 of the Articles of Association, the Board of Management
must comprise a minimum of two persons; beyond this,
the number of members is determined by the Supervisory
Board. Rules of procedure issued by the Supervisory Board
regulate the distribution of responsibilities and cooperation
on the Board of Management, which has had two committees
since 1 January 2006 – one for Group operations
and one for reinsurance operations – in order to enhance
the efficiency of its work.
Statutory regulations and provisions in the Articles of
Association governing the appointment and dismissal
of members of the Board of Management
The legal parameters for the appointment and dismissal
of members of the Board of Management are specified in
Sections 30–33 of the German Co-Determination Act and
Sections 84 and 85 of the German Stock Companies Act.
Munich Re’s Articles of Association do not deviate from
this. The Supervisory Board appoints the members of the
Board of Management and may dismiss them at any time
for good cause. On initial appointment, members of the
Board of Management are usually given contracts for a
term of between three and five years. Extensions of up to
five years are possible and – in exceptional cases – members
of the Board of Management may also be appointed
by a court of law.
Authorities of the Board of Management with particular
regard to the option of issuing or buying back shares
Pursuant to Article 4 of the Articles of Association, Munich
Re’s Board of Management is authorised to implement certain
capital measures (Authorised Capital Increases 2004
and 2006, Contingent Capital Increase 2003 I and 2005).
Furthermore, by resolution of the Annual General
Meeting of 19 April 2006, the Board of Management was
authorised to buy back and use the Company’s own shares.
The complete wording of the resolution adopted on agenda
item 5 can be accessed on our website (www.munichre.com)
at any time. With the share buy-back – resolved and
announced on 7 November 2006 for a maximum total
purchase price of €1bn – the Board of Management has
partially exhausted this authorisation. Additional information
is available on page 178 and of course on the internet.
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Management report_Corporate governance report
Collaboration between Board of Management and Supervisory
Board
The Board of Management and Supervisory Board cooperate
closely to the benefit of the Company. The Board of
Management coordinates the Company’s strategic approach
with the Supervisory Board and discusses the current state
of strategy implementation with it at regular intervals. It
reports regularly to the Supervisory Board. Certain types
of transaction, such as investments of substantial size,
generally require the Supervisory Board’s consent.
Supervisory Board
The Supervisory Board monitors the Board of Management
and gives counsel where appropriate. Certain transactions,
such as major investments or capital measures,
require its approval, but it is not authorised to take management
action. The Supervisory Board also appoints the
external auditor of the financial statements. Remuneration
of the members of the Supervisory Board is regulated in
the Articles of Association, i.e. is determined by the shareholders.
In compliance with the law and the Company’s Articles
of Association, Munich Re’s Supervisory Board has 20
members. Half are elected representatives of the employees,
and half representatives of the shareholders, elected
by the Annual General Meeting.
Munich Re’s Supervisory Board has four committees:
the Standing Committee, the Personnel Committee, the
Audit Committee and the Conference Committee.
Annual General Meeting
At Munich Re’s AGM, the principle of “one share, one
vote” applies. Shareholders may exercise their voting
rights personally or authorise a proxy appointed in writing,
a bank or a shareholders’ association to cast their votes.
Munich Re also offers its shareholders the opportunity to
have their voting rights exercised in accordance with their
personal instructions by one of the proxies nominated by
the Company.
Significant agreements which take effect, alter or
terminate upon a change of control following a
takeover bid
Based on our underwriting policy, our reinsurance agreements
include a clause that grants both parties to the
agreement a right of extraordinary cancellation in the
event that “the other party merges with another company
or its ownership or control undergoes a material change”.