Corporate Governance: Our understanding

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Our Understanding

Corporate governance report1

Corporate governance stands for a form of responsible company management and control geared to long-term creation of value.

The German Corporate Governance Code contains the main legal rules to be observed by listed German companies. In addition, it includes recommendations and proposals based on nationally and internationally recognised standards of good and responsible management. We apply the highest standards to our operations and activities and therefore comply with all the recommendations and proposals of the German Corporate Governance Code. By adopting international guidelines such as the UN Global Compact, the Principles for Responsible Investment and the Principles for Sustainable Insurance, we further demonstrate our commitment to corporate responsibility.

Efficient practices on the Board of Management and Supervisory Board, good collaboration between these bodies and with the Group’s staff, an organisational structure that fits the purpose of the Group, and efficient processes for conducting business are core elements of good corporate governance. They help to secure the confidence of investors, clients, employees and the general public in our corporate activities.

More information on corporate governance can be found at There, you can also find the Statement on Corporate Governance in accordance with Sections 289f and 315d of the German Commercial Code (HGB) and the Declaration of Conformity by the Board of Management and Supervisory Board with the German Corporate Governance Code in accordance with Section 161 of the German Stock Corporation Act (AktG). The remuneration report can be found on page 27 ff. of the combined management report.

Corporate legal structure

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (Munich Reinsurance Company) has three governing bodies: the Annual General Meeting, the Board of Management and the Supervisory Board. Their functions and powers are defined by law, the Articles of Association, the Co-determination Agreement applicable to Munich Reinsurance Company, and by rules of procedure and internal guidelines. Employee co-determination on the Supervisory Board is governed by the Co-determination Agreement concluded pursuant to the German Act on the Co-Determination of Employees in Cross-Border Mergers (MgVG). There, the principle of parity co-determination on the Supervisory Board has been strengthened by taking into account staff employed in the rest of Europe.

The supervisory requirements for (re)insurance companies, especially the German Insurance Supervision Act (VAG) and the European supervisory regulations (Solvency II implementing rules) are placing additional demands on corporate governance. They include specific rules on various issues such as business organisation or the qualifications and remuneration of members of the Board of Management, Supervisory Board members and other individuals.

Annual General Meeting

The Annual General Meeting regularly reaches a resolution on the appropriation of profits and approval of the actions of the Board of Management and Supervisory Board. Besides this, the Annual General Meeting elects the shareholder representatives on the Supervisory Board and, in particular, votes on changes to the Articles of Association and on individual capital measures. Certain corporate contracts also require the approval of the Annual General Meeting to become effective.

The principle of “one share, one vote” applies at the Company’s Annual General Meeting. With the aim of making it easier for shareholders to take part and exercise their voting rights, the Company offers the possibility of postal and electronic voting as well as online participation in the Annual General Meeting.

Board of Management

Pursuant to Article 16 of the Articles of Association, the Board of Management consists of at least two members; beyond this, the number of members is determined by the Supervisory Board. When appointing the Board of Management, the Supervisory Board pays due regard to diversity. In 2017, the Board of Management of Munich Reinsurance Company had nine members, two of whom were women.

The Board of Management is responsible for managing the Company, in particular for setting the Company’s objectives and determining strategy. In doing so, it is obliged to safeguard Company interests and endeavour to achieve a sustainable long-term increase in the Company’s value. It should take account of the interests of shareholders, employees, and other stakeholders of Munich Reinsurance Company. The Board of Management is responsible for effecting adequate risk management and risk control in the Company. It must ensure that statutory requirements and internal Company guidelines are abided by, and works to achieve their compliance by Group companies.


The Company’s Group Compliance division (GComp) manages the compliance activities of Munich Re (Group) through Group-wide terms of reference, monitoring their implementation by means of the compliance management system (CMS). The CMS is the methodical framework for the structured implementation of early warning, risk control, consulting and supervision functions, as well as for the monitoring of legal frameworks.

At the instigation of the Board of Management, another channel has been established to complement the external, independent ombudsman and thus strengthen compliance within Munich Re: the compliance whistleblowing portal. Staff members and third parties can use this portal to anonymously report any activity that may cause reputational damage, suspected criminal behaviour such as bribery and corruption, contraventions of antitrust laws, insider trading rules and data protection laws, and any other violations of applicable legislation.

Further information about compliance and the keyfeatures of the CMS can be found at

Collaboration between Board of Management and Supervisory Board

The Board of Management and the Supervisory Board cooperate closely for 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. The Board of Management reports regularly and as needed to the Supervisory Board about all questions relevant to the Company. Beyond this, the Board of Management reports to the Audit Committee on specific topics falling within the latter’s scope of responsibility. The Supervisory Board has defined the Board of Management’s information and reporting obligations in detail. Specific types of transaction, such as certain investments and divestments, require the Supervisory Board’s consent. The Supervisory Board’s approval is also required for sideline activities assumed by members of the Board of Management, and for important transactions involving members of the Board of Management or persons or undertakings closely associated with them.

Supervisory Board

Pursuant to Munich Reinsurance Company’s Articles of Association, the Supervisory Board has 20 members. Half are representatives of the shareholders, elected by the Annual General Meeting. The other half are elected representatives of the Group’s employees in the European Economic Area.

The Supervisory Board monitors the Board of Management and gives counsel where appropriate, but it is not authorised to take management action in place of the Board of Management. In accordance with a special rule applicable to (re)insurance companies, the Supervisory Board also appoints the external auditor for the Company and Group financial statements and for the Half-Year Financial Report.

Objectives of the Supervisory Board concerning its composition, diversity, independence and competences

In accordance with Section 5.4.1(2) of the German Corporate Governance Code, the Supervisory Board has set itself the following objectives concerning its composition and has defined requirements regarding the competencies of its members:

  • The main criteria for selecting future members of the Supervisory Board are the professional knowledge, personal abilities and experience (especially of an international nature), independence, commitment to sustained corporate profitability, and enterprise of the nominated persons.
  • The Supervisory Board should have at least sixteen independent members within the meaning of Section 5.4.2 of the German Corporate Governance Code, including at least eight shareholder representatives. Members of the Supervisory Board should have no relevant conflicts of interest.
  • In selecting candidates, the Supervisory Board should pay due regard to diversity, especially in terms of age, internationality and gender. No change has been made to the objective of having at least 30% of Supervisory Board seats filled by women at the start of the next term of office. At the end of the year under review, 45% of the Supervisory Board seats were held by women. The Supervisory Board’s objective has therefore already been exceeded at this juncture.
  • When nominating candidates for election to the Supervisory Board in future, it should be borne in mind that, as a rule, no candidate should have been on the Supervisory Board for a continuous period of more than ten years at the time of election. Normally, Supervisory Board members should not serve on the Board for a continuous period of more than twelve years.

In addition, the Supervisory Board’s rules of procedure provide for a recommended age limit of 70 for candidates.

The aforementioned objectives apply to the Supervisory Board as a whole. Shareholder and employee representatives will each contribute towards meeting these objectives.

The Supervisory Board is of the opinion that all 20 of its members are to be regarded as independent within the meaning of Section 5.4.2 of the German Corporate Governance Code. The shareholder structure was taken into account. The Supervisory Board is not aware of any business or personal relationship between a member and the Company, its governing bodies, a controlling shareholder or an entity affiliated with such a shareholder, as a result of which a major and not only temporary conflict of interest could arise. The Supervisory Board assumes that the employee representatives on the Supervisory Board elected in accordance with the Act on the Co-Determination of Employees in Cross-Border Mergers and the Co-determination Agreement are independent as a matter of principle.

The Supervisory Board’s Nomination Committee selects candidates for the shareholder representatives based on a defined set of criteria. Besides the objectives mentioned, these criteria include a good overall understanding of the Company’s business model, sufficient time availability and specific skills and competence. Consequently, it must be ensured that the Supervisory Board as a whole possesses adequate knowledge, skills and experience with regard to markets, business processes, competitors, the requirements of reinsurance, primary insurance and investment, as well as having an adequate knowledge of risk management;  accounting; financial control and management accounting, and internal auditing; asset liability management; legal and regulatory affairs; compliance; and taxation. The members must collectively be familiar with the sector in which the Company operates.

The set of criteria also includes other personal qualities of the Supervisory Board members, such as corporate and international experience, a strong commitment to corporate governance and to a sustainable corporate strategy and business policy geared to creating long-term value for shareholders, strategic and problem-solving skills, and competence in dealing with change.

Additional requirements will be defined on a case-by-case basis for specific tasks to be handled by the Supervisory Board. The European Electoral Board, which is responsible for the election of the employee representatives, applies a corresponding set of criteria. In addition, the specific rules for co-determination apply.

The Supervisory Board is of the opinion that its composition meets the defined criteria and that it fulfils the competence profile.

Share trading and shares held by Board members

The Company has to be notified promptly of the acquisition or sale of Company shares (or financial instruments based on these) by members of the Board of Management and Supervisory Board and by specified persons closely related to or connected with them. This notification must take place for acquisition and sales transactions totalling €5,000 or more in a single calendar year.

Munich Reinsurance Company publishes information of this kind on its website without undue delay.

1In accordance with Section 3.10 of the German Corporate Governance Code.

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