Ensuring good corporate governance and compliance
Swiss Re’s corporate governance forms the basis for sustainable management of the Swiss Re Group.
Swiss Re considers good corporate governance as one of the preconditions to ensure sustainability throughout all the Group’s activities and indispensable to maintaining long-lasting, valuable relationships with its stakeholders. We recognise that transparent disclosure of our governance structure fosters assessment of the quality of our organisation and business conduct.
Swiss Re’s corporate governance adheres to the SIX Swiss Exchange’s Directive on Information Relating to Corporate Governance, including its annex. It is also in line with the principles of the Swiss Code of Best Practice for Corporate Governance (Swiss Code) of September 2014, issued by economiesuisse, the Swiss business federation. Swiss Re also conforms to the Swiss Financial Market Supervisory Authority (FINMA) provisions on corporate governance, risk management and internal control systems. Swiss Re’s corporate governance furthermore complies with applicable local rules and regulations in all jurisdictions where it conducts business.
Our key focus areas in 2016 were the enhancement of Swiss Re Life Capital Ltd’s and the Business Unit Life Capital’s corporate governance framework and the comprehensive revision of the Bylaws.
In our Corporate Responsibility Report, we highlight key elements of Swiss Re’s corporate governance, in particular with respect to its structure, the independence of the Board of Directors, conflicts of interest procedures and shareholder rights. Comprehensive information on Swiss Re’s corporate governance is available in the 2016 Financial Report.
Swiss Re’s corporate governance structure
Swiss Re has a dual board structure in place: the Board of Directors is responsible for the overall direction, supervision and control of Swiss Re Ltd and the Group. It has delegated the management of Swiss Re Ltd and the Swiss Re Group to the Group Executive Committee (Group EC). This structure maintains effective mutual checks and balances between these top corporate bodies.
The Swiss Re Ltd & Group Bylaws (“SRL&Group Bylaws”) define the governance structure for Swiss Re Ltd and within the Swiss Re Group, including the responsibilities of the Board of Directors, Chairman, Vice Chairman, Lead Independent Director, Board committees, Group EC, Group CEO and of the other individual Group EC members including the Regional Presidents, as well as the relevant reporting procedures.
As determined by applicable law and the Articles of Association, the Board of Directors has non-transferable responsibilities and authorities. The Board of Directors has established Board committees, which support the Board in fulfilling its duties. The Board of Directors has delegated certain responsibilities, including the preparation and execution of its resolutions, to the following five committees: the Chairman’s and Governance Committee, the Audit Committee, the Compensation Committee, the Finance and Risk Committee and the Investment Committee.
Independence of the Board of Directors and conflicts of interest procedures
The SRL&Group Bylaws stipulate that at least three-quarters of the members of the Board of Directors must be independent. Independence is defined in line with best practice corporate governance standards. To be considered independent, a Group Board member may not be, and may not have been in the past three years, employed as a member of the Group EC, or by any subsidiary of the Swiss Re Group or may not have a material relationship with any part of the Swiss Re Group (either directly or as a partner, director or shareholder of an organisation that has a material relationship with the Swiss Re Group) other than serving as an independent board member in any subsidiary.
All the members of the Board of Directors meet our independence criteria with the exception of our Chairman. In line with Swiss Re’s independence criteria, he is not considered independent being a full-time Chairman. In addition to the independence criteria applicable to Board members in general, additional independence criteria apply for members of the Audit Committee.
The members of the Board of Directors are also subject to procedures to avoid any action, position or interest that conflicts with an interest of Swiss Re Ltd or the Swiss Re Group or gives the appearance of a conflict. Each member must disclose any conflict of interest generally arising or relating to a matter to be discussed at a meeting, as soon as the member becomes aware of the conflict, to the Chairman. The respective member must not participate in the discussion and decision-making involving the interest at stake. The Chairman informs the Board of Directors of the existence of the conflict and it is reflected in the meeting minutes.
Shareholders’ participation rights
All shares issued by Swiss Re Ltd are fully paid-in registered shares, each with a par value of CHF 0.10. Each share carries one vote. There are no categories of shares with a higher or limited voting power, privileged dividend entitlement or any other preferential rights, nor are there any other securities representing a part of Swiss Re Ltd’s share capital. Swiss Re Ltd cannot exercise the voting rights of treasury shares.
Voting right restrictions, statutory group clauses and exception rules
There are no voting right restrictions and no statutory group clauses (other than the limitations on nominee registrations). Therefore, there are no procedures or conditions for cancelling restrictions and no rules on making exceptions to them. Accordingly, no such exceptions were made in 2016.
Statutory rules on participating in the General Meeting of shareholders
The share whose owner, usufructuary or nominee is entered in the share register as having voting rights on a specific qualifying day determined by the Board of Directors entitles its holder to one vote at the General Meeting of shareholders.
Swiss Re Ltd’s Articles of Association allow any shareholder with voting rights to have his or her shares represented at any General Meeting of shareholders by another person authorised in writing or by the Independent Proxy. Such representatives need not be shareholders.
Business firms, partnerships and corporate bodies may be represented by legal or authorised representatives or other proxies, married persons by their spouses, minors and wards by their guardians, even though such representatives are not shareholders.
Changes of control and defence measures
Swiss Re Ltd has not put in place any specific measures to defend against potential unfriendly takeover attempts. Swiss Re Ltd’s Articles of Association neither contain an “opting up” nor an “opting out” provision. The Board of Directors believes that the company’s best protection is a fair valuation of its shares, and that the efficiency of a free market is preferable to artificial obstacles, which can have a negative impact on the share price in the long term.