SWITZERLAND Law and Practice Contributed by: Lorenzo Olgiati and Pascal Hubli, Schellenberg Wittmer Ltd
3.3 Board Composition Regarding the composition of the board, current Swiss company law is flexible and the shareholders enjoy broad discretion. Swiss company law contains no rules on the maximum number of seats and no age restrictions on board members. However, listed Swiss companies must observe the gender representation guidelines (see 7.1 ESG Requirements ). Regulated Industries In regulated industries – particularly in the financial sector – the members of the executive bodies of supervised institutions must satisfy the requirement of proper business conduct and possess the required knowledge and experience (“fit and proper”). Assur - ance of proper business conduct covers matters of personal character (including criminal records) and professional qualifications required for the proper management of a supervised entity. The principal cri - terion used in assessing a person’s suitability is their past and present business activity. As to the require - ments regarding the composition of the board relating to independent directors, see 3.5 Independence of Directors . 3.4 Appointment and Removal of Directors/ Officers Only the shareholders’ meeting can appoint or remove the board of directors. This is permissible whenever a shareholders’ meeting is held and its agenda pro - vides for the respective election or removal (see 4.3 Shareholder Meetings ). For listed companies, the chairperson of the board, each member of the board and the members of the compensation committee must be appointed and (re-) elected individually and annually. In non-listed compa - nies, the elected board members may resolve on the board’s organisation, constitution and their members’ functions, including the appointment of the chairper - son. Unless otherwise provided by the articles of associa - tion, the shareholders’ meeting passes resolutions on the election and removal of any director by an abso - lute majority of the votes represented at the respective meeting.
Officers, in particular members of the executive man - agement, are generally appointed and removed by the board of directors, unless the articles of association or organisational regulations provide otherwise. There are generally no statutory restrictions on who may be appointed as a board member, in particu - lar with regard to nationality, age or maximum term of office. However, the company must be capable of being represented by at least one person who is resident in Switzerland. The residency requirement is deemed satisfied if either one person with sole signa - tory authority resident in Switzerland, or two persons with joint signatory authority resident in Switzerland, are registered in the commercial register. In regulated industries, such as banking or insurance, additional fit-and-proper requirements may apply. 3.5 Independence of Directors Swiss company law does not require business corpo - rations to have independent directors. The SCBP, however, emphasises that well-founded decisions can emerge only by exchanging ideas and critical views among the members of the board of directors and the executive management. Therefore, it recommends that the majority of the board should consist of independent members. Independent mem - bers are deemed to be non-executive members of the board who: • have never been a member of the executive management or, if they have, then more than three years ago; • have never served as lead auditor or who served as lead auditor more than two years ago; and • have no or only minor business relations with the company. The board may establish further criteria for independ - ence. Importantly, in cases of cross-involvement with other boards, the independence of the member in question should be carefully examined on a case-by- case basis. According to the SCBP, the nomination committee should be predominantly composed of independent directors. For the compensation committee, only inde -
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