Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006 Management report_Corporate governance report
Such or similar clauses are typical of the industry. Munich
Re’s long-term incentive plans provide for special exercise
conditions in the event of a change of control following a
takeover bid. Beyond this, there are no other significant
Munich Re agreements that take effect, alter or terminate
upon change of control following a takeover bid.
Corporate governance topics in 2006
A code of conduct for all employees of Munich Re and the
reinsurance companies of the Munich Re Group has been
in force since 2006 and is published on our website. The
purpose of the code is to provide clear information and
guidance for employees (including members of the Board
of Management) on the basic legal and ethical requirements
they must comply with in the course of their work
for the individual Group companies.
On 1 January 2006, the Board of Management set up
two committees from amongst its ranks – one for Group
operations and the other for reinsurance operations. This
organisational distinction between Group matters and the
operative management of our reinsurance business has
proven a success. It permits a more focused deployment of
resources and enables us to manage the Group as a whole
more efficiently in its various fields of business.
As from the financial year 2006, Munich Re is publishing
the remuneration of the Board of Management in
individualised form for the first time (see remuneration
report).
Last year, the Supervisory Board again reviewed the
efficiency of the Board of Management’s activities. The
main focus was on the content and timing of reports from
the Board of Management to the Supervisory Board. This
was assessed as generally positive and efficient, as was
the improvement in the efficiency of the Supervisory
Board’s work in the financial year 2006.
Recommendations and suggestions of the German
Corporate Governance Code
In November 2006, the Board of Management and the
Supervisory Board published the following declaration of
conformity, in accordance with Section 161 of the German
Stock Companies Act:
”Since 24 July 2006, Munich Re has complied with all
the recommendations of the Government Commission’s
German Corporate Governance Code of 12 June 2006
(published on 24 July 2006).
Since the last declaration of conformity in November 2005,
Munich Re has fulfilled – with only one exception – the recommendations
of the Government Commission’s German
Corporate Governance Code in the version of 2 June 2005
(published on 20 July 2005). The exception involved the
since-deleted recommendation in item 4.2.4 sentence 2 of
the German Corporate Governance Code (individualised
disclosure of the Board of Management’s remuneration in
the notes to the consolidated financial statements).”
Munich Re also complies with all the suggestions of
the Code with only one exception. This concerns item 5.4.7
paragraph 2 sentence 2 of the Code, which suggests that
the result-related remuneration of members of the Supervisory
Board should include components based on the
company’s long-term performance. We consider that a
convincing remuneration model for this is still lacking and
that our remuneration model, approved by the Annual
General Meeting in 2005, is a good solution in terms of
corporate governance.
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