On Tuesday, Ethos published the 24th edition of its voting guidelines and governance principles, which will apply during the 2025 general meeting season. Ethos is reinforcing its expectations with regard to the availability and diversity on boards of directors.
As it has done every year since 2001, the Ethos Foundation has updated its voting guidelines and governance principles to take into account recent developments in corporate governance and sustainability, as well as changes in the legal framework and best practices. This document, published on Tuesday, is essential as it is the basis for all the voting recommendations that Ethos will make during the 2025 annual general meeting (AGM) season, both in Switzerland and internationally.
For this new edition, two important changes directly related to the composition of the boards of directors were adopted by the Ethos Foundation board. Firstly, it was decided to reduce the maximum number of directorships that a person may hold on the boards of listed companies. A non-executive director may now hold a maximum of four directorships, as opposed to five previously. If this number were to be exceeded, Ethos would recommend opposing the person's election or re-election at the AGM. It should be noted that chair mandates count double, as was previously the case.
“Successive crises, disruptive technologies, sustainability or digital responsibility issues and changes in the various transitional, legislative or physical risks require board members to be more available and more responsive”, explains Vincent Kaufmann, CEO of Ethos,
Ethos has also strengthened its requirements with regard to gender diversity on boards of directors. Ethos will now oppose the re-election of the chairperson of the nomination committee (or of the board of directors if there is no such committee) if the board does not include at least 30% women.
This tougher stance is in response to a worrying situation. While Swiss companies had five years under the law, i.e. until January 2026, to meet the 30% quota for women on their boards, a recent study by Ethos shows that they are still far from achieving it. More than half the companies in the SPI (56.4% of them) had not yet reached this quota this year. Even more worryingly, 36 of them still had no women on their boards.
Finally, although Ethos has already defined its requirements for approving sustainability and/or climate reports in its guidelines since 2022, this new edition clarifies Ethos‘ expectations, in particular with regard to companies’ climate strategy. In particular, any deterioration in the transparency of the report or in the sustainability strategy itself will now be better taken into account. During the 2024 AGM season, it was noted that some companies had stopped publishing key indicators from one year to the next, while others had reneged on certain commitments made in the past, such as the willingness to submit their climate targets to the Science Based Targets initiative for approval.
