SWITZERLAND Law and Practice Contributed by: Lorenzo Olgiati and Pascal Hubli, Schellenberg Wittmer Ltd
2.3 Decision-Making Processes Shareholders’ Meeting
• overall management of the company – duty to determine the corporate strategy and allocate the corporate resources (strategic governance); • defining the fundamental organisational structure; • setting up an accounting and financial control system (including an internal control system for medium-sized and larger businesses) as well as financial planning; • appointing and removing the management/granting of signing authority to the individuals authorised to act on behalf of the company; • ultimately monitoring the individuals entrusted with management responsibilities; • preparing annual reports and shareholders’ meet - ings as well as implementing their resolutions; • filing an application for a debt restructuring mora - torium and notifying the bankruptcy court if the company’s liabilities are no longer covered by its assets (over-indebtedness); and • issuing the annual compensation report on the board’s and executive management’s compensa - tion (only for listed companies). Notwithstanding the non-transferable and inalien - able nature of these responsibilities, the board may delegate the preparation and execution of its reso - lutions to committees, but not the decision-making itself (“delegation of decision-shaping but not deci - sion-making”). Listed companies often establish an audit committee, a compensation committee and/or a nomination committee. Statutory Auditors The statutory auditors serve as a controlling body by (i) reviewing the annual accounts and the motions made by the board to the shareholders’ meeting on the allocation of the balance sheet profit and by (ii) reporting to the shareholders’ meeting whether the annual accounts comply with the statutory provisions, the articles of association and the applicable financial reporting standards. The scope of an auditor’s duties depends on the nature and size of the company in question; listed, large and mid-sized corporations are subject to an ordinary audit, while smaller corpora - tions are subject to a limited audit only.
The shareholders’ meeting is convened by the board of directors. The notice must include the agenda items and the boards’ motions (and shareholders’ motions, if any). The board must briefly explain its proposals; however, explanations for shareholders’ motions are optional. Resolutions can only be made on motions relating to agenda items that were duly notified (see 4.3 Shareholder Meetings ). Resolutions generally require an absolute majority of the votes represented. Certain important resolutions (such as the amendment of the company’s purpose, the introduction of conditional capital, of a capital band or of transfer restricted shares), require a quali - fied majority – ie, two thirds of the voting rights repre - sented and the absolute majority of the nominal value of shares represented. A requirement for a qualified majority may also be introduced for other matters by a resolution of the shareholders’ meeting which satisfies the proposed majority requirement. A universal shareholders’ meeting (ie, a meeting at which the owners or representatives of all shares are present or represented) may be held without observ - ing the formal convening requirements, provided that no objection is raised. Such a meeting may also pass resolutions in writing on paper or in electronic form, provided that no shareholder or its representative requests oral deliberation. In most companies, the principle of “one share, one vote” applies. The articles of association may, how - ever, also provide for voting shares (common in family- controlled companies). Board of Directors Resolutions of the board of directors may be passed by a (relative) majority of the votes cast at the meeting. However, the articles of association and the organisa - tional regulations may also introduce a quorum for the presence of a minimum number of board members or for a specific vote of the board. In the case of a tie, the chairperson holds the casting vote, unless the articles of association stipulate otherwise.
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