48 of the 100 largest Swiss listed companies will propose an advisory vote of their executive remuneration at their 2012 annual general meeting (up from 45 in 2011). This progress is the result of long term constructive dialogue between Ethos and Swiss listed companies.

However, the corporate governance of many companies still falls short of best practice, which results in more opposition at general meetings and puts pressure on management to initiate a continuous improvement process.

Institutional investors are increasingly interested not only in general meetings of listed companies, but also in long term dialogue with investee companies. Such engagement leads to positive results.

Progress in Terms of Best Practice

In the context of its dialogue with listed companies, Ethos recently sent a letter to the chairmen of 56 listed companies that were not in line with certain best practice standards with regard to general meetings. Notably to companies that do not propose an advisory vote of the remuneration report, or that do not put their minutes with the exact results of the vote for each item on the agenda on their website, or do not use electronic voting. The answers of the 31 companies that responded to Ethos' letter give the following picture for 2012:

  • 48 companies will propose an advisory Say on Pay (2011: 45)
  • 94 companies will put the minutes of the general meeting on their website (2011: 89)
  • 86 companies will publish the exact results of the vote for each item on the agenda (2011: 80)
  • 51 companies will use electronic voting at their general meeting (2011: 49)

This trend is confirmed in the Ethos Engagement Pool 2011 summary results, which also include additional information. For example, 76 companies had adopted and published a code of conduct in 2011, up from 42 at the beginning of the engagement in 2006. As of today, the Ethos Engagement Pool includes 76 Swiss Pension Funds with total assets under management of approximately 110 billion Swiss franks. On behalf of its members, the pool engages the dialogue with Swiss listed companies with the aim of improving the companies' corporate governance, as well as their environmental and social responsibility.

Increasing Opposition at General Meetings

The 2012 general meeting season is now underway. As in 2011, Ethos expects increased opposition, notably on issues of executive remuneration, discharge of the board as well as capital increase requests. In 2011, the average approval rate was 86.9% for capital increase requests, 87.3% for executive remuneration and 96.3% for the discharge.