The statutory corporate law set out in the Swiss Code of Obligations (CO) is the main source of Swiss corporate governance regulation. The CO applies to private and public companies. As regards corporate governance, the provisions of the CO focus on transparency, shareholder rights and the principle of parity between the company's corporate bodies. The current governance rules of the CO are rather liberal and provide companies with considerable flexibility as regards the setup of their governance structure. Note that a pending revision of the CO will increase governance regulation, mainly by increasing shareholder rights.2 In this context, the Swiss Ordinance against Excessive Compensation in Listed Companies (OaEC), which came into force in 2014, will be incorporated into the CO. The OaEC introduced restrictions on several remuneration practices and gives shareholders a binding say on pay as well as the right to elect the chair of the board of directors, the members of the compensation committee and the independent proxy. The stock market law incorporated in the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (FMIA) and its accompanying ordinances also contain governance rules, in particular the shareholders' duty to disclose significant participations as well as general rules on public takeovers.
The SIX Swiss Exchange3 (SIX) issued the Listing Rules (SIX-LR)4 and various implementing directives and circulars. These regulations set the ground for good governance with binding rules on periodic financial reporting and, in particular, ad hoc disclosure rules applicable to all SIX-listed companies. The SIX-LR are complemented by the Directive on Information in relation to Corporate Governance (SIX-DCG)5 and the Directive on the Disclosure of Management Transactions (SIX-DMT)6. The SIX-DCG requires listed companies to include a chapter on corporate governance in their annual report. The SIX Exchange Regulation, the independent regulatory body within the SIX organisation, issues focus review letters indicating the topics on which SIX's assessment will focus in the relevant reporting period.7 The SIX-DMT requires companies to disclose transactions in its shares and related instruments by members of the board of directors or the management board. SIX is empowered to enforce its regulation through the SIX Exchange Regulation and the Sanctions Commission, which investigate violations and may impose sanctions. Their decisions and sanctions can be appealed to the independent Appeals Panel and, ultimately, to the SIX Arbitration Court.
Further, economiesuisse8 issued the Swiss Code of Best Practice for Corporate Governance (Code)9 primarily for public corporations. The Code contains non-binding recommendations and guidelines with a special focus on the rights and duties of shareholders and the board of directors. The core objectives are ensuring transparency as well as checks and balances between management and control by the means of comply or explain.
Independent proxy advisers (such as Ethos and zRating) regularly issue voting guidelines and corporate governance principles on which they base their proxy voting services and recommendations. Corporate governance is a key focus area of those regulations. Despite such regulations being non-binding, they have a significant influence on shareholders' voting and public perception.
Besides the regulation applicable to listed companies in general, there are specific rules on corporate governance applicable to banks, investment companies and insurance companies. The circulars on corporate governance, risk management and internal controls at banks and insurance companies, respectively, and the circular on remuneration schemes of financial institutions issued by the Swiss Financial Market Supervisory Authority, are most relevant in this context.
For further information on corporate governance in Switzerland consult https://thelawreviews.co.uk/edition/the-corporate-governance-review-edit...
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