The Code of Best Practice for Corporate Governance was introduced in 2002 and ever since it has become an important guide for Swiss companies in drafting their interior regulations in terms of company management. From a legal point of view, the main regulatory legal frameworks on company management are the Swiss Code of Obligations, the Federal Act on Mergers, Demergers, Transformations and Transfer of Assets and the Criminal Code. A company’s Articles of Association will also contain information about the shareholders’ rights and the management board’s duties and responsibilities. Public companies in Switzerland are subject to other regulations beside the ones mentioned previously. Among theses there are the Federal Ordinance against Excessive Compensation in Public Corporations and the Federal Act on Stock Exchanges and Securities Trading (SESTA).
The powers of shareholders in Swiss companies are defined in the company’s Articles of Association. They will usually make decisions about company staff, will elect and release the members in the management board, will also name the auditors of the company and are also involved in accounting matters, such as the approval of the annual financial statement. The shareholders will decide the company’s purpose and will make decisions in merger and acquisition cases or liquidation. Shareholders must hold an annual general shareholders’ meeting.
The board of directors of companies in Switzerland is the one establishing a company’s goals, will also decide the course of action in order to achieve those goals and will decide the persons in charge with running the company’s business. Among the most important duties of the board of directors are the supervision of the company’s staff, the organization of the accounting system, the nomination and removal of the company’s management members and representatives. The board of directors must also draft the annual report and implement the general shareholders’ meeting resolutions. The board of directors will answer to the shareholders directly. There are no requirements regarding the number of the members of the board of directors, but it must be sufficient to ensure the efficiency of the decision making process. However, experienced individuals from different fields are recommended in order to ensure the company’s success.
For complete information about corporate governance and compliance management you can contact our law firm in Switzerland.
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