Annual General Meeting of the CS Group on 1 June 2001: The ethos Foundation resolution contributes to open the debate on the independence of the Board of Directors:
At the annual general meeting of the CS Group on 1 June 2001, the resolution presented by the ethos Foundation urging «the Board of Directors to take the appropriate measures to ensure its independence» created a debate which lasted for nearly one hour.
The Board of Directors of the CS Group opposed this resolution on the grounds that it was a «pointless repetition of a legally acknowledged principle». However, this argument is false because Swiss legislation does not embody any legal principle stipulating the independence of the Board.
At the final vote, the ethos resolution received support from 1.7% of the votes represented at the meeting, i.e. from shares in the CS Group with a value of CHF 500 million, whereas ethos itself only owns shares for CHF 28 million.
Significantly enough, even if the resolution was rejected by a majority of the shareholders, it helped not only to launch the debate in Switzerland on the notion of the independence of the Board of Directors but also to influence the attitude of the CS Group management with respect to the rules of corporate governance.
The Chairman of the Board, Mr. L. Mühlemann, in fact agreed to step down from the Nominations and Remuneration Committee of the Board of Directors. Moreover, the bank agreed to appoint a « senior board member », i.e. Mr. P. Brabeck, Vice-Chairman and CEO of Nestlé. A senior board member is notably empowered to convene a meeting of the Board without its Chairman. However, ethos regrets that this person is not independent as recommended by the codes of best practice in corporate governance.
Ethos remains convinced that an independent Board of Directors makes a significant contribution to the success of a business, for the benefit of its shareholders and the majority of the other stakeholders. For this reason, the ethos Foundation will pursue its efforts to encourage companies in which it is a shareholder to take the necessary measures to guarantee the independence of their Board of Directors.
