The Board of Directors - An Overview

In Switzerland, the board of directors of a corporation (AG) plays a central role in corporate governance. As the highest governing body of an AG, the board of directors is responsible for both the strategic orientation of the company and its supervision. In this blog post, we want to provide a comprehensive overview of the board of directors. We explain what the board of directors is, how it is composed, what competencies it has, and who elects it.

What is the board of directors?

The board of directors (VR) of an AG in Switzerland is the leading body that bears overall responsibility for the company's business activities. It is responsible for the strategic orientation and supervision of the company and ensures that the management acts in the interest of the shareholders. The board of directors operates within the framework of the Code of Obligations (OR) and the statutes.  

Composition of the board of directors

The composition of the board of directors can vary, depending on the size and structure of the company. In principle, the board of directors must consist of at least one member. However, in practice, it usually consists of several people in order to cover a broader spectrum of expertise and experience. The members of the board of directors are elected for a specific term of office, which is specified in the company's statutes. Typically, without adjustment of the statutes, a term lasts three years. Reelection is possible, and in many companies, it is common for board members to remain in office for several terms.

Competencies and tasks of the board of directors

The main task of the board of directors is to oversee the management and determine the strategic direction of the company. This includes setting long-term goals and monitoring the operational implementation by the management team. In addition, the board of directors is responsible for defining the organizational structure of the company, including the appointment and dismissal of the management.

Other duties of the board of directors include preparing the annual report, preparing the general meeting of shareholders, and implementing capital measures such as capital increases or decreases. The board of directors is also obligated to establish an internal control system (ICS) to ensure that the company operates in accordance with legal requirements and internal guidelines.

One of the most important competencies of the board of directors is representing the company externally. It acts on behalf of the company and makes decisions that legally bind the company. In practice, this task is often delegated to the management, but the ultimate responsibility remains with the board of directors.

Who elects the board of directors?

The board of directors is elected by the general meeting of shareholders. The general meeting gives shareholders the opportunity to decide on the composition of the board of directors, thereby influencing the strategic direction of the company. Shareholders can elect individual members of the board of directors or accept the entire list of proposed candidates.  

Conclusion

The board of directors is the central body of corporate governance and plays a crucial role in setting the strategic orientation and overseeing the management. Its composition, competencies, and the manner of its election reflect the importance that the board of directors holds in Swiss corporate law. With the election of the board of directors by the general assembly, shareholders actively influence the management and future of the company. Therefore, it is essential that the board of directors consists of competent and experienced individuals capable of successfully leading the company and achieving its long-term goals.

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