As a European Company (SE) based in Germany, the formal structure of our corporate governance is determined by national law. The fundamental hallmarks are the two-tier system with its transparent and effective split into the management of the company (Executive Board) and its oversight (Supervisory Board), the composition of the Supervisory Board with representatives of the shareholders and employees as well as the shareholders' rights of co-administration and supervision at the General Meeting. The interaction between these bodies is regulated in German stock corporation law as well as in the company's Articles of Association. In addition, our corporate strategy, the Corporate Governance Principles and our Code of Conduct form the basis of our enterprise management.
Overall responsibility for enterprise management and Group-wide risk management as well as for the definition of the Risk Strategy rests with the Executive Board of our company. The Supervisory Board takes responsibility for advising, and especially for monitoring and supervising, the Executive Board in its management of the company and also with respect to risk management.
The avoidance of conflicts of interest is assisted by the control mechanisms stipulated in law and in the Articles of Association that exist between the Executive Board, Supervisory Board and General Meeting. In order to assure the provision of independent advice to and oversight of the Executive Board by the Supervisory Board, no more than two former members of the Executive Board shall belong to the Supervisory Board. Members of the Supervisory Board may not take on any governance function or consulting tasks at significant competitors of the company.
Our stakeholders have the opportunity to report critical issues to the company's highest governance body. All stakeholders, and especially shareholders, have recourse to the Supervisory Board with which they can raise their objections. Our shareholders exercise their voting right at our Annual General Meeting, in particular by determining the members of the Supervisory Board, ratifying the acts of management of the Executive Board and Supervisory Board, adopting the resolution on the appropriation of profit and through their right to ask questions and receive information. In this connection, too, every shareholder is able to directly address questions or comments. Within the framework of our established governance structures, critical concerns – including in relation to sustainability matters – are communicated on an ongoing basis to both the Executive Board and the Supervisory Board. In accordance with the practice adopted by the Supervisory Board and Executive Board, critical concerns are immediately addressed and dealt with at the meetings of the Supervisory Board and its committees.
When appointments are made to the Executive Board and Supervisory Board, Hannover Rück SE is guided by a number of considerations including the principle of diversity. Wide-ranging qualifications, expertise and relevant experience on the part of the members of the Executive Board and Supervisory Board facilitate a nuanced evaluation of the commercial opportunities and risks associated with business operations and enable balanced and professional actions and decisions to be taken on this basis. Due consideration is given to the aspect of diversity when members of the Executive Board and Supervisory Board are appointed. In addition to specialist and personal qualifications (competencies), this aspect encompasses in particular age, gender, education and professional career. With a view to ensuring that the concept of diversity is applied on an ongoing basis, an assessment is made in the context of every new appointment to the Executive Board or Supervisory Board as to whether the envisaged appointment is also in keeping with the diversity concept. We report at length on the concept of diversity in our Group Annual Report 2018 from page 126 onwards.