Corporate Governance report
In past years Hannover Re was in compliance with all recommendations of the German Corporate Governance Code (DCGK). This continued to be the case in the present year, insofar as implementation of the German Corporate Governance Code as amended 14 June 2007 is concerned. We diverged with respect to one item of the Code as amended 6 June 2008. The item in question involves a recommendation adopted with the most recent amendment of the Code to the effect that a severance cap should be included when new management contracts are drawn up or existing ones renewed. The reasons for our decision are explained in the Declaration of Conformity contained in this report.
An independent survey of acceptance of the Code's recommendations and suggestions conducted by the Berlin Center of Corporate Governance found that Hannover Re once again - as in previous years - ranked as one of the leaders among MDax-listed companies when it came to compliance with the provisions of the Code. On average, companies listed on the MDax satisfied just 74 of the 80 recommendations of the Code as amended 14 June 2007, leaving the level of acceptance unchanged at 92.4%.
As we had already explained at this juncture in the previous year, good enterprise management and supervision in the spirit of state-of-the-art Corporate Governance continues to be enshrined in Hannover Re's business practices as a matter of course. This is already evident from the fact that the Executive Board and Supervisory Board consistently address changes in the relevant legal framework conditions in a timely manner and the latest legal developments are promptly codified in internal corporate standards. The company's Business Principles, for example, were subjected to a thorough review in order to maintain Hannover Re's very good reputation and - by setting high standards - to shape a lasting and above all favourable image of our company in the perception of our shareholders, business partners and the public at large.
With an eye to the theme of compliance, we informed you last year that explicit responsibility for this issue is now enshrined within the schedule of responsibility of the Executive Board and the Balance Sheet Committee of the Supervisory Board. Since then, the Executive Board has regularly briefed the Balance Sheet Committee in detailed reports on the latest developments and activities in this area. The goal of these efforts is to prevent any infractions of the law and to ensure that every single employee and officer at Hannover Re conducts themselves with integrity, irrespective of whether the matter at hand is one of antitrust law, compliance with national and international embargo regulations or equal treatment and non-discrimination.
The resolutions adopted by the Government Commission on the German Corporate Governance Code on 6 June 2008 regarding the further refinement of the Code in the area of management board remuneration were discussed at length by the Supervisory Board. In this regard, it was agreed that the company should comply with the recommendation contained in Item 4.2.2 Para. 1 of the Code. At its first meeting of 2009 the full Supervisory Board will therefore decide upon the remuneration system for the Executive Board, including the major contractual components, and subsequently subject this to regular review.
The activities described here testify to the considerable significance that the Executive Board and Supervisory Board attach to the issue of Corporate Governance. All these efforts are driven by the goal of bringing about sustained growth in the value of the company and strengthening and consolidating on a lasting basis the trust placed in the enterprise by our shareholders, business partners, clients, employees and the general public. On this basis Hannover Re supports the principles of value-based and transparent enterprise management and supervision as defined in the German Corporate Governance Code (DCGK) and recognises their importance in guiding its activities.
In the year just-ended we again devoted considerable attention to our communication with the financial market and developed an impressive range of Investor Relations activities. For further details please see the section entitled "The Hannover Re share" in this Annual Report
Remuneration report for the Executive Board and individualised disclosure of the remuneration received by Supervisory Board members pursuant to Items 4.2.5 and 5.4.7 of the German Corporate Governance Code
The information regarding these items is provided in the remuneration report.
Securities transactions pursuant to Item 6.6 of the German Corporate Governance Code
With regard to this information we would also refer the reader to the remuneration report.
Shareholdings pursuant to Item 6.6 of the German Corporate Governance Code
Information in this respect is similarly provided in the remuneration report.
Share-based payment pursuant to Item 7.1.3 of the German Corporate Governance Code
Information regarding this topic is provided under Item 8.3 of the notes and in the remuneration report with respect to the members of the Executive Board.