Uneasy lies the head that wears a crown – Zur Rolle des Verwaltungsrates in schweizerischen Publikumsgesellschaften

The board of directors of a Swiss public company is stuck between a rock and a hard place. Shareholders breathe down directors’ necks with earnings expectations, but the results are delivered by an executive management under the board’s control rather than by the board itself. The executives who run the business on a day-to-day basis know the company better than the board. This allows them to inform the directors selectively and thus to influence board decision-making. All of this sounds like a recipe for disaster, but nonetheless works well in practice.

Swiss Law allows a board of directors to manage the affairs of the company on its own or to delegate day-to-day operations to a management under its supervision, though certain key strategic, personnel and financial matters have to be resolved by the board alone. Outside of these inalienable and non-delegable matters, a Swiss company is free to structure the devolution of powers to executive management, and free to determine how…