The Ethos Foundation is generally satisfied with the preliminary draft put into consultation by the Swiss Federal Council. The proposed revision of the Code of Obligations as well as of several other laws significantly improves corporate governance at Swiss companies.Despite this, Ethos regrets that a number of topics are not covered. In particular, the Foundation calls for introducing an obligation to publish extra-financial information by companies, the extension of the board's due diligence to cover fundamental human rights and the environment as well as a limitation of the scope of the opting out in the Stock Exchange Act.
Ethos especially welcomes the following points in the preliminary draft of the revision of Swiss company law:
- the provisions proposed in the framework of the Minder initiative, in particular that the voting modalities foresee that variable remunerations may not be voted on prospectively.
- the various improvements to the rules of Corporate Governance, especially the lowering of the requirements for filing restitution claims, the lowering of the threshold entitling shareholders to submit a resolution or to call a general meeting as well as the introduction of an additional dividend for shareholders voting their shares at the general meeting.
However, Ethos also considers that a number of changes and additions to the proposals made in the preliminary draft are necessary. In particular, the limits for the new capital fluctuation band must be tightened and the transparency standards must be extended to commodity trading companies.
Obligation to publish environmental and social information
A number of topics are not covered in the preliminary draft despite their importance for good corporate governance. Ethos hopes that these topics find their way into the draft of the revision that the Swiss Federal Council will present to Swiss Parliament. Ethos proposes the adoption of the following topics:
- Introduction of an obligation to publish an extra-financial report which covers the main risks, the management system, the performance indicators and the results achieved in terms of environmental and social performance.
- The extension of the board's due diligence to cover fundamental human rights and the environment.
- The abolition of bearer shares. These allow shareholders to remain unidentified, which poses various governance problems, especially as regards the fight against money laundering.
- The limitation of the range of the opting out in the Stock Exchange Act. In certain situations, an opting out clause limited to a specific shareholder can be accepted, but should not be generalized.
The Ethos Foundation hopes that its proposals will be included in the final draft, which will be presented to Swiss Parliament in the following months.
