The new issue of the Ethos Discussion Papers, on the pending revision of the Swiss Company Law, is published today, coinciding with the beginning of the relevant parliamentary discussions. The revision represents an ideal opportunity to amend the corporate governance of listed companies and simultaneously strengthen shareholder's rights. While Ethos approves the Swiss Federal Council's proposals on the whole, Ethos reiterates its demand for a shareholder advisory vote on the remuneration report.
Recently, the Swiss Federal Council passed a request to Parliament for an extensive revision of the Swiss Company Law (Code of Obligations). This revision has four main objectives: to strengthen corporate governance, to ease the rules regarding the structure of the capital, to modernise the procedures at General Meetings and to reform the accounting law.
Ethos welcomes the draft revision which the Federal Council submitted to Parliament. However, there is potential for further improvement regarding the right of the General Meeting to vote on executive pay. Ethos therefore calls for an advisory vote of the General Meeting on the remuneration report as well as on the participation plans with shares and options. The demand aims at preventing excessive executive pay at listed companies in future. Furthermore, it is based on a recommendation by the European Union and current practice in several countries, notably the United Kingdom and the Netherlands.
The Committee for Legal Affairs of the Council of States will treat the draft revision of the Federal Council on August 26, 2008. The Council of States should be able to comment on the draft revision by the end of this year and the National Council is scheduled to treat it in Spring 2009.
Ethos Discussion Paper No. 3
Revision of Swiss Company Law: Important Phase for Shareholder Rights in Switzerland
The «Ethos Discussion Papers» regularly feature in-depth articles on current issues in the fields of Socially Responsible Investment (SRI) and active shareholding. They complement Ethos' quarterly publications Ethos Quarterly (current SRI issues) and Ethos Investment Focus (quarterly report on the Ethos funds).
