To prevent any deterioration of shareholder rights linked to the revision of Swiss law on public limited companies, the Ethos Foundation is strengthening its voting guidelines for the 2023 annual general meeting (AGM) season. Ethos fears in particular a transfer of power from the AGM to the board of directors in connection with the introduction of the capital fluctuation margin, the fact that it will be more complicated for shareholders to include an item on the agenda of an AGM or the possibility for companies to organise exclusively virtual AGMs. Ethos is also strengthening its expectations in terms of climate reporting and concerning succession plans for boards of directors.
The annual general meetings of the Ethos Foundation and Ethos Services SA were held this morning in Bern. All the items on the agenda were approved, starting with the climate action plan which should enable Ethos to achieve its goal of net zero CO2 emissions by 2050. This afternoon, a conference dedicated to the sustainable and inclusive economy will will bring together a panel of experts who and will be broadcast live from 1:45 p.m. on the Ethos Foundation website (in French or German).
On Monday, the bank published its responses to the request for information filed by the Ethos Foundation and seven Swiss pension funds concerning the “Greensill” and “Swiss Secrets” cases. These answers are a first step to enable shareholders to better understand the Greensill affair. However, Ethos considers that they remain insufficient and therefore maintains its request for a special audit at the 2022 AGM in order to have them analysed and validated by an independent third party.
Ethos and seven Swiss pension funds have filed a shareholders' resolution at Credit Suisse's 2022 general meeting calling for a special audit of the bank in connection with the Greensill affair – and the “supply chain finance funds” debacle that followed – and the recent so-called “Suisse Secrets” revelations.
The real estate company announced on Friday that it has modified the agenda for its annual general meeting 2022 to lower the threshold allowing shareholders to add an item on the agenda. This decision follows Ethos' recommendation to oppose the initial proposal of the board of directors to set this threshold at 0.5% of the capital, which represented a significant deterioration of the current threshold. Considering the concerns expressed by Ethos, the board decided to review its proposal and to set the threshold at 0.25%.
Coordinated by Ethos and ShareAction, a group of institutional investors have filed a shareholders' resolution at the bank. Through a proposed amendment to the bank’s articles of association, the coalition asks that Credit Suisse improve its transparency regarding its climate impact and reduce its exposure to the financing of companies active in fossil fuels.
Ethos is concerned that the modification of the articles of association in relation to the revision of the Swiss Code of Obligations will lead some companies to revise upwards the threshold necessary to submit an item on the agenda. This is what Swiss Prime Site, the first SPI company to adapt its statutes, proposes at its 2022 AGM. Ethos therefore calls on shareholders to refuse this pejoration of their rights by opposing item 7.1 of the agenda. Ethos is also concerned that despite the lifting of sanitary restrictions in Switzerland, few companies have shown interest to organise a physical AGM this year, thus depriving shareholders of their right to be able to express themselves and ask questions to the board of directors.
The 21st edition of its proxy voting guidelines and corporate governance principles is an opportunity to strengthen the sustainability and diversity requirements of the Ethos Foundation. The criteria for approving a sustainability or a climate report submitted to shareholder approval have been detailed. In addition, the re-election of the chairperson of the sustainability committees of companies with high CO2 emissions whose transition plan is deemed unsatisfactory will be refused.
Roche shareholders are due to vote on November 26 on the agreement to repurchase 53.3 million Roche shares from Novartis. While Ethos agrees that the exit of Roche’s main competitor from its capital makes sense, it considers that the option chosen is not in the interest of minority shareholders given that the historic controlling shareholder will see his voting rights increase from 45% to 67.5% without having to make any investment.
The bank has been hit by two financial scandals (Archegos Capital and Greensill) in recent week which have raised questions on its governance and risk management processes. As a shareholder and representative of numerous Swiss pension funds, Ethos has sent to the board of directors questions in relation with these recent cases.