Board of directors of a Swiss AG (Verwaltungsrat)

How the Swiss board of directors works

Every Swiss stock corporation (AG) has a board of directors (Verwaltungsrat) of one or more members (Art. 707 CO), elected by the general meeting (Art. 698 CO). There is no upper limit, and Swiss law does not reserve seats for employees. A company cannot hold a seat itself; its representative can be elected in its place (Art. 707 para. 3 CO). The Swiss AG has a single-tier structure. A German AG must split governance between a management board (Vorstand) and a supervisory board (Aufsichtsrat), whereas in Switzerland one body carries both roles.

In a non-listed company the board elects its president (Art. 712 CO) unless the articles give that power to the general meeting, and members serve three years unless the articles set another term, six at most (Art. 710 CO). In a listed company the general meeting elects the president and each member individually, until the next ordinary general meeting.

Non-transferable duties

Art. 716a CO lists the duties the board can neither delegate nor be deprived of: overall management and the necessary directives; the company's organisation; accounting, financial control and financial planning; appointing and dismissing the people who manage and represent the company, and supervising them; the annual report, the preparation of the general meeting and the implementation of its resolutions; filing for a debt restructuring moratorium and notifying the court when the company is over-indebted. Listed companies add the compensation report. The board can hand day-to-day management to a CEO or an executive board through organisational regulations (Art. 716b CO), and these duties still stay with the board.

Representation and domicile

The board represents the company externally (Art. 718 CO). It can delegate representation to members (delegates) or to third parties (directors, Direktoren) and appoint registered attorneys (Prokuristen, Art. 721 CO). The register shows each person's authority, for example sole signature or joint signature by two. The company must be representable by a person domiciled in Switzerland, and that person must be a board member or a director (Art. 718 para. 4 CO). A Prokurist does not meet the requirement.

In the commercial register and the SHAB

Each board member is entered with surname, first name, place of origin (nationality for foreign nationals), place of residence, function and type of signature (Art. 119 HRegV). When a member joins, leaves or changes signing authority, the change is published in the Swiss Official Gazette of Commerce (SHAB) and takes effect on publication (Art. 936a CO). A typical notice reads: "Eingetragene Personen neu oder mutierend: Muster, Anna, von Bern, in Zürich, Präsidentin des Verwaltungsrates, mit Einzelunterschrift."

What to check on a company profile

• Signing authority: a member listed "ohne Zeichnungsberechtigung" (without signing authority) cannot sign for the company. The entries on joint signature and sole signature explain who can sign with whom.
• Board size: a single-member board concentrates all governance in one person, which is worth a question when you assess a larger AG.
• Turnover: frequent changes of board members, visible in consecutive SHAB notices, can signal instability. The company check guide lists the patterns to look for.
• President: the president chairs the board and has the casting vote unless the articles provide otherwise (Art. 713 CO). The register entry normally shows who holds the office.

For who sits on Swiss boards, see the directorship concentration guide and the gender breakdown of Swiss company officers.