The Board of Directors – An Overview

In Switzerland, the board of directors of a company limited by shares (Ltd) plays a central role in the company's management. As the most senior governing body of an AG, the board of directors is responsible for both the strategic direction of the company and its supervision. In this blog post, we aim to provide a comprehensive overview of the board of directors. We explain what the board of directors is, how it is composed, what its powers are and who elects it.

What is the Board of Directors?

The Board of Directors (BoD) of a Swiss AG is the governing body with overall responsibility for the company's business activities. It is responsible for the strategic direction and supervision of the company and ensures that the management acts in the interests of the shareholders. The Board of Directors acts within the framework of the Swiss 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 persons 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 defined in the company's statutes. As a rule, and without amendment of the articles of incorporation, a term of office is three years. Re-election 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 supervise the management and determine the strategic direction of the company. This includes setting long-term goals and monitoring operational implementation by management. In addition, the board of directors is responsible for defining the organisational structure of the company, including appointing and dismissing the management.

The board of directors' other responsibilities include preparing the annual report, preparing for the annual general meeting of shareholders and implementing capital measures such as capital increases or decreases. The board of directors is also obliged to set up an internal control system (ICS) to ensure that the company acts in accordance with legal requirements and internal guidelines.

One of the most important responsibilities of the board of directors is to represent 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 ultimate responsibility remains with the board of directors.

Who elects the board of directors?

The board of directors is elected by the shareholders at the Annual General Meeting. The Annual General Meeting offers shareholders the opportunity to decide on the composition of the board of directors and thus influence 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 corporate governance body and plays a crucial role in setting the strategic direction and supervising management. Its composition, competencies and mode of election reflect the importance given to the board under Swiss company law. By electing the board of directors at the AGM, shareholders actively influence the management and future of the company. It is therefore crucial that the board consists of competent and experienced individuals who are able to successfully manage the company and achieve its long-term goals.

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