Corporate law reform: Changes concerning the Board of Directors
The Federal Law on Amendments to the Swiss Code of Obligations, which the Federal Councils passed on June 19, 2020, will comprehensively revise stock corporation law. The referendum deadline expired without having been used on October 8, 2020. The new law is expected to come into force in the second half of 2021.
The revision aims, among other things, to improve corporate governance at the board level. What is new?
Decision-making through electronic means: Art. 713 para. 2 no. 3 nCO brings about a significant administrative simplification. For the first time, the law authorizes the Board of Directors to adopt circular resolutions purely electronically (e.g., by e-mail or SMS/WhatsApp). Handwritten signatures or qualified electronic signatures are no longer required.
Procedure for conflicts of interest: Art. 717a nCO now expressly states that all members of the board of directors (and the executive management) must inform the board of directors immediately and in full about conflicts of interest concerning them. The Board of Directors must then take the necessary measures to safeguard the interests of the company.
Individual election of the board of directors' members: The Boards of Directors of all public limited companies must now be elected individually. Consequently, the election of the Board of Directors at the Annual General Meeting in corpore is no longer permissible in the case of privately held companies. Until now, this rule only applied to listed companies. A different provision in the Articles of Incorporation remains possible; likewise, the General Meeting of Shareholders may, with the consent of all shareholders represented, waive the requirement for individual election (Art. 710 para. 2 no. 2 nCO).
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