Board supervision of executive management
Swiss Re’s Board of Directors maintains effective and consistent oversight and monitors the execution of responsibilities it has delegated to executive management through the following control and information instruments.
Participation of Board members at executive management meetings
The Chairman of the Board is invited to all meetings of the Group EC and Business Units and receives the corresponding documentation and minutes.
The Board committees are entitled to conduct or authorise special investigations at any time and at their full discretion into any matters within their respective scope of responsibilities, taking into consideration relevant peer group practice and general best practice. The committees are empowered to retain independent counsel, accountants or other experts if deemed necessary.
Involvement of executive management in meetings of the Board of Directors
As a matter of principle, all members of the Group EC are requested to attend the regular meetings of the Board of Directors as advisers. The members of the Group EC do not attend the constitutional meeting of the Board of Directors following the Annual General Meeting. The entire Group EC was present at five regular and one extraordinary Board meetings in 2013. At four meetings one member of the Group EC was absent. At two meetings the presence of only a part of the members of the Group EC was requested.
Involvement of executive management in Board committee meetings
As a matter of principle, selected members of the Group EC as well as further senior management members participate at Board committee meetings as advisers. The Charters of the Board committees specify management participation at committee meetings. A detailed summary of executive management participation in Board committee meetings is provided in Work methods of the Board of Directors and its committees.
Periodic reports to Board of Directors
A comprehensive Executive Report on business developments, including major business transactions, claims, corporate development and key projects, is provided to the Board of Directors at each of its regular meetings.
Executive management furthermore regularly provides the Board of Directors with specific written reports containing:
- risk management issues and related actions;
- the legally required update on the solvency of the Swiss Re Group, Swiss Reinsurance Company Ltd, European Reinsurance Company of Zurich Ltd and Swiss Re Corporate Solutions Ltd;
- a detailed analysis of the loss reserves development of the major Group companies;
- the use of derivative financial instruments within the Group;
- an overview of the activities of the assurance work of Operational Risk Management and by the Business Risk Review, by Group Internal Audit and Compliance – including key risk indicators and significant losses and issues;
- major pending legal matters such as litigation and arbitration, investigations and inquiries, as well as information about key legal developments and risks;
- material compliance matters, including assessments of compliance risks and related mitigation efforts;
- an update on the most important regulatory issues and supervisory developments; as well as
- a description of trends and forecasts regarding the economic environment and the Property & Casualty and Life & Health re/insurance and financial markets.
Swiss Re’s Risk Management function provides regular risk reports to the Board of Directors, which are discussed in depth by the Finance and Risk Committee. These reports cover Swiss Re’s compliance with the Group’s risk tolerance criteria, major changes in risk and capital adequacy measures and a description of the Group’s main risk issues, including related risk management actions. The Finance and Risk Committee regularly reports to the full Board of Directors as deemed appropriate.
Duty to inform on extraordinary events
As soon as the Group CEO or the Group EC becomes aware of any significant extraordinary business development or event, it is obliged to inform the Board of Directors immediately. The Board has specific reporting procedures in place for this eventuality.
Right to obtain information
The Board of Directors has complete and open access to the Group CEO, the Group CFO, the Group CRO, the Group Chief Strategy Officer, the Group General Counsel, the Group Chief Compliance Officer and the Head of Group Internal Audit. Any member of the Board of Directors who wishes to have access to any other officer or employee of the Group will coordinate such access through the Chairman.
Any member of the Board of Directors may demand at Board meetings to obtain information on any aspect of the Group’s business. Any member may, in such meetings, request that books and records be produced for timely inspection. Outside Board meetings, any member can direct a request for production of information and business records to the Chairman.
Group Internal Audit
Group Internal Audit (GIA) is an independent assurance function, evaluating the adequacy and effectiveness of the Group’s internal control environment. It helps the Group accomplish its objectives by applying a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
GIA applies a risk-based approach, performing its own risk assessment as well as making use of risk assessments performed by the Group’s Risk Management and other assurance functions (after reviewing the quality of the assurance work performed). Based on the results of the risk assessment, GIA produces an annual Audit Plan for review and approval by the Audit Committee. The Audit Plan is updated on a quarterly basis according to the Group’s evolving needs. GIA provides formal quarterly updates on its activities to the Audit Committee, which include audit results, the status of management actions required, the appropriateness of the resources and skills of GIA and any changes in the tools and methodologies it uses.
The Head of GIA meets at least once per quarter with the Audit Committee, and immediately reports any issue which could have a potentially material impact on the business of the Group to the Chairman of the Audit Committee.
GIA is an integral part of the Group’s Integrated Assurance Framework and coordinates its activities with those of the other assurance functions as well as the external auditor whilst still ensuring its independence. As part of this process it reviews the quarterly Assurance Report, which provides a summary of key issues as well as the assurance activities across the Group.
GIA has unrestricted access to any of the Group’s property and employees relevant to any function under review. All employees are required to assist GIA in fulfilling its duty. GIA has no direct operational responsibility or authority over any of the activities it reviews.
GIA staff govern themselves by following the Code of Ethics issued by the Institute of Internal Auditors (IIA). The IIA’s International Standards for the Professional Practice of Internal Auditing constitute the operating guidance for the department.
For information regarding the external auditors, please refer Auditors.