Overview

Environmental, social and governance (ESG) issues have grown in importance and become key focus areas in Europe, the US and other key jurisdictions.

Environmental, social and governance (ESG) issues dominated corporate governance discussions in key jurisdictions during 2019. There is an understanding that corporate actions do not take place in a vacuum, but within a dynamic landscape of evolving ESG issues and risks. ESG issues are linked to a variety of areas, for which the boards already have oversight, meaning those issues cannot be viewed in isolation. It is not surprising that many of the main corporate governance trends in 2019, such as diversity, scrutiny of executive remuneration, and workforce and stakeholder engagement, are to some extent related to the wider discussion around ESG issues. We expect the ESG trend to intensify further over the next few years. One reason for the increased focus on ESG issues is the greater transparency with respect to corporate reporting in general and ESG disclosures in particular. Companies are increasingly asked about their approach to sustainability and corporate social responsibility. They recognise that a good reputation, including a well-developed response to ESG matters, can be a strategic asset. A failure to respond appropriately to ESG issues can be a long-term and strategic risk. Employees, in particular millennials, contribute to the focus on ESG issues as they expect their companies to reflect their values. Finally, investors are also increasingly focusing on ESG issues.

Swiss Re Sustainability event

The Sustainable Leadership Series “Responsible investing in practice” at the Swiss Re Centre for Global Dialogue in Rueschlikon in September 2019 brought together market participants from the public and private sectors, including institutional investors, wealth managers, policymakers, non-profit organisations and academia. The event served as a platform to share first-hand insights on the implementation of sustainable investing strategies, discuss policy developments and look at latest trends in stewardship across a fast-evolving market.

Information on compensation

Information on compensation, shareholdings and loans of the members of the Board of Directors and the Group Executive Committee (Group EC) are included in the Compensation Report in this Financial Report.

Swiss Re’s corporate governance framework

Swiss Re’s corporate governance framework ensures sustainability, fosters transparency and facilitates a quality assessment of the Swiss Re Group’s organisation and business. The Board of Directors has ultimate responsibility for the success of Swiss Re Ltd (SRL) and the Group within a framework of effective and prudent controls. It is responsible for the overall direction, supervision and control of SRL and the Group and of the Group Executive Committee (Group EC), as well as for supervising compliance with applicable laws, rules and regulations. Such responsibilities are non-transferable and rest with the entire Board. The Board of Directors has delegated the management of SRL and the Group to the Group EC.

Swiss Re’s governance documents

Swiss Re’s Code of Conduct provides key principles that guide Swiss Re in making responsible decisions and achieving results using the highest ethical standards. It is built on the five Swiss Re Corporate Values: Integrity, Team Spirit, Passion to Perform, Agility and Client Centricity. The Corporate Governance Guidelines set out Swiss Re’s harmonised governance principles and standards, ensuring a consistent and tailored corporate governance approach across the Group. The Articles of Association define the legal and organisational framework of SRL as the Group’s holding company. The Bylaws define Swiss Re’s governance framework and include the responsibilities of the Board of Directors and the Group EC and their members. The Board Committee Charters outline the duties and responsibilities of the Board Committees and form part of the Bylaws. The Bylaws and the Board Committee Charters are not publicly available.

2019 key focus areas

Cyber risk

In light of Swiss Re’s ever-increasing cyber risk exposure, cyber risk was added as a standing agenda item to the Finance & Risk Committee (FRC) meetings. In April 2019, the FRC was presented, in addition to an update on global cyber regulations, with the results of the yearly internal Cyber Risk Assessment which compares Swiss Re Group’s maturity with financial industry peers. In June 2019, the FRC discussed the positive results of testing Swiss Re’s cyber security stance (including red teaming, incident response simulations and table-top exercises) from both the attacker’s and defender’s point of view. In October 2019, the FRC discussed the three-year Cyber Defence Programme and considered next steps. Finally, the December meeting highlighted that cyber security is an ongoing journey, and as Swiss Re is a knowledge company based on data, security must be part of our DNA. While Swiss Re has launched its cyber defence successfully, a continuous focus is needed to strengthen and adapt its existing security capabilities to address the ever-changing threat landscape.

Swiss Re Summit

We held the Swiss Re Summit at our headquarter in Zurich on 3 December 2019. We brought together the boards and executive teams of the Group and Business Units and the board members of the most important subsidiaries to share experiences, discuss current issues and hear about key trends affecting Swiss Re and the industry at large. The Summit focused on the strategy for the Group as well as for the individual Business Units.

The Group’s CEO and CFO shared insights into our technology strategy, recent R&D achievements and efforts undertaken by the Swiss Re Institute and spoke about the financial and capital targets for the coming years. The three Business Unit CEOs outlined their respective strategies and talked about some of the challenges they currently face. The day ended with a panel discussion on sustainability, which is an integral part of our strategy and our day-to-day business. The Summit was preceded by an Audit Summit, where the members of the SRL Audit Committee met with the members of the Audit Committees of the ten most important Group companies. The participants discussed important ongoing projects as well as the impact of upcoming accounting changes and internal and external audit topics, including the transition to the newly selected External Auditor.

Corporate Governance Refresher Training

In September 2019, we held two Corporate Governance Refresher Training sessions, which our internal Swiss Re stakeholders could join via conference call. The Head Corporate Governance Group presented the Group’s corporate governance framework and documents, with a focus on the Corporate Governance Guidelines as well as the Bylaws. The participants discussed practical examples relevant for the applicability of the Bylaws. The training concluded with Q&A and feedback sessions.

Swiss Re’s corporate governance adheres to:

• The SIX Swiss Exchange’s Directive on Information Relating to Corporate Governance (including its annex) dated 20 March 2018, effective as of 1 May 2018.
• The Swiss Code of Best Practice for Corporate Governance (Swiss Code) of 28 August 2014, issued by economiesuisse, the Swiss business federation.
• The Swiss Financial Market Supervisory Authority FINMA provisions on corporate governance, risk management and internal control system at insurers.

Swiss Re’s corporate governance also complies with applicable local rules and regulations in all jurisdictions where it conducts business.

Highlights 2019/2020

Network for Innovative Corporate Governance (NICG):

First Conference held: Board Dynamics – Information Management

Swiss Re and the University of St. Gallen (HSG) entered into a strategic research coorperation arrangement at the beginning of 2019. On 1 July 2019, members of the Swiss business community and academics from HSG met at the Swiss Re Centre for Global Dialogue. The occasion was the founding of the Network for Innovative Corporate Governance (NICG), an initiative for promoting interdisciplinary and cross-generational dialogue on the future of corporate governance and its integral development. The opening conference was dedicated to the topic “Board Dynamics – Information Management”. The conference provided a platform for the exchange of knowledge, for discussions and for addressing possible development potential. The aim was to close certain existing research gaps, to open up innovative topics and, for a broad spectrum of subject areas, to deepen and expand the existing cooperation between academia and practice. NICG is under the leadership of Professor Dr Michèle Sutter-Rüdisser (HSG) and Dr Felix Horber, Swiss Re’s Company Secretary. NICG’s guiding principle is: An innovative contribution to the further development of corporate governance requires a lively exchange and constant discussion. For further information please visit: www.nicg.net/conference

Board of Directors

Composition in 2019

• At the Annual General Meeting on 17 April 2019, the shareholders re-elected Walter B. Kielholz for a further one-year term of office as a member and Chairman of the Board of Directors.
• All other members of the Board of Directors were individually re-elected by the Annual General Meeting 2019 for a further one-year term of office as members of the Board of Directors: Renato Fassbind (Vice Chairman and Lead Independent Director), Raymond K.F. Ch’ien, Karen Gavan, Trevor Manuel, Jay Ralph, Joerg Reinhardt, Eileen Rominger, Philip K. Ryan, Sir Paul Tucker, Jacques de Vaucleroy, Susan L. Wagner and Larry Zimpleman. The Board of Directors consists of 13 members.
• The Annual General Meeting 2019 re-elected Renato Fassbind, Raymond K.F. Ch’ien, Joerg Reinhardt and Jacques de Vaucleroy as members of the Compensation Committee for a one-year term of office.

Announced composition changes in 2020

Trevor Manuel and Eileen Rominger will not stand for re-election at the Annual General Meeting 2020. The Board of Directors proposes to elect Sergio P. Ermotti, Joachim Oechslin and Deanna Ong as new members of the Board of Directors for a first one-year term of office until completion of the Annual General Meeting 2021.

Nomination Committee

At the constitutive meeting of the Board of Directors following the Annual General Meeting 2019, the Board of Directors established a Nomination Committee. The Nomination Committee’s function is to generally assist the Board of Directors in its overall responsibility to select, nominate and appoint members of the Board of Directors, the Chairman and the members of the Compensation Committee. The following Board members are members of the Nomination Committee: Renato Fassbind (Chair), Joerg Reinhardt, Jacques de Vaucleroy and Susan L. Wagner. For further information see Nominations for re-/election by the Annual General Meeting of 17 April 2020 and https://www.swissre.com/about-us/corporate-governance/board-committees.html

Group EC

Composition in 2019

• Andreas Berger (former Chief Regions & Markets Officer and member of the Board of Management of Allianz Global Corporate & Specialty SE) was appointed CEO Corporate Solutions and a member of the Group EC with effect from 1 March 2019. He succeeds Agostino Galvagni, who decided to step down as CEO Corporate Solutions at the end of 2018.
• Anette Bronder (previously a member of the Management Board at T-Systems International) was appointed Group Chief Operating Officer and a member of the Group EC with effect from 1 July 2019, succeeding Thomas Wellauer, who retired on 30 June 2019.
• Nigel Fretwell, Group Chief Human Resources Officer, and Hermann Geiger, Group Chief Legal Officer, were appointed as new members of the Group EC with effect from 1 July 2019. The Group EC had therefore consisted of 14 members since 1 July 2019; prior to that it consisted of 12 members. At the same time, Group Human Resources became a new Group Function.
• Russell Higginbotham (former CEO Reinsurance Europe, Middle East and Africa (EMEA) and Regional President EMEA) was appointed CEO Reinsurance Asia and Regional President Asia with effect from 8 July 2019. He succeeds Jayne Plunkett who decided to pursue an new opportunity outside Swiss Re.
• Urs Baertschi, previously President Reinsurance Latin America, was appointed CEO Reinsurance EMEA and Regional President EMEA and a member of the Group EC with effect from 1 September 2019, succeeding Russell Higginbotham, who was appointed CEO Reinsurance Asia and Regional President Asia.

Announced composition change in 2020

• Jonathan Isherwood (current Head of Globals Reinsurance) will succeed J. Eric Smith, CEO Reinsurance Americas and Regional President Americas, assuming responsibility as CEO Reinsurance Americas with effect from 1 April 2020 and as Regional President Americas and a member of the Group EC with effect from 14 August 2020, when J. Eric Smith retires.