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‘On boards of directors diversity is essential’

Cornelia Ritz Bossicard leads swissVR, an independent Swiss association of board members. She explains the role that boards of directors and their members play in steering businesses.

A director of the board for several companies, Bossicard became president of swissVR in 2018.

The aim of swissVR is to strengthen the skills of Swiss boards by offering a forum for sharing experiences, organising company visits, publishing surveys and reports, and providing training together with several partner organisations.

Switzerland has more than 100,000 public companies, ranging from large multinationals listed on the stock exchange to small and medium-sized entreprises (SMEs).

SWI What are the main tasks that board members have?

Cornelia Ritz Bossicard: Swiss law stipulates that board members have seven non-transferable and inalienable duties. Of these tasks, I would highlight three key elements. First is defining strategy. In other countries – Germany, for example – this is the responsibility of management and not the board. Second is structuring the organisation, including appointing the CEO. Third is financial control, including the obligation to inform a competent court without delay in the event of excessive debt – this is another specific Swiss feature.

Cornelia Ritz Bossicard

After completing her Masters degree in business administration at the HEC Lausanne and Berlin’s Freie Universität, Cornelia Ritz Bossicard worked for almost 20 years in the auditing field at PwC in Lausanne, Zurich and Silicon Valley.

She is currently a member of several boards of directors, including IVF Hartmann (chair) and the chocolate maker Läderach. She is also president of the board of trustees of the Caesar Ritz Niederwald Foundation, a member of the board of directors of the Migros Cooperative Association, and a member of the board at the federal technology institute ETH Zurich. Since 2018, she has been president of the swissVR association.

SWI: What qualifications should board members have?

C.R.B: All members must have strategic skills, leadership and financial expertise. In addition, collectively, they should cover specific fields of knowledge – for example, digital transition – depending on the needs of the company. It is of course important that the members of a board of directors work as a team.

SWI: What are the differences between the board of a family-owned SME and that of a start-up or a large multinational company?

C.R.B: All boards face the same basic challenges. However, their role varies a little, depending on the ownership and financial arrangements of the companies.

For example, in the case of a very small company with a single shareholder and zero debt, the board plays mainly an advisory role. In the case of an SME with minority shareholders, it is the board’s responsibility to ensure that the interests of all shareholders are protected. In the case of listed companies, the board of directors must of course be at home with the specific rules of the stock exchange, particularly with regard to financial transparency, ad-hoc communication and insider trading.

SWI: In the United States and France, for example, it is common for the same person to be chair of the board and CEO. What about in Switzerland? 

C.R.B: Legally, this dual function is possible, except in certain cases, such as in banks. However, I don’t recommend it because the positions of chair and CEO are both jobs in their own right: the opportunity to create a tandem shouldn’t be missed.

Naturally, in the case of young companies, it is understandable that both positions are held by the same person, usually the founder and main shareholder. In the case of family-owned SMEs, this dual role is not uncommon either. However, in the case of large companies – especially those listed on the stock exchange – this is rarely the case. If it should prove absolutely necessary, it is important to counterbalance this with an independent lead director.

SWI: In a Swiss limited company at least one person entitled to represent the company must reside in Switzerland. Why?

C.R.B: In a Swiss corporation, all the directors, managers and shareholders can be foreigners. However, at least one member of the board of directors (or one director) with signing rights must indeed reside in Switzerland. I think legislators wanted limited companies to have some minimal connection to Switzerland. In addition, in case of problems it’s important for the courts to have access to a responsible person who is physically present in Switzerland.

SWI: In some countries, the law encourages the presence of foreign directors in large companies. Is this true in Switzerland too?

C.R.B: Swiss law is silent on this point, but it’s simply not an issue here. According to the latest Schilling report, 36% of board members are foreigners at the 92 largest Swiss companies. This percentage rises to 61% for the top 20 companies listed on the Swiss stock exchange.

SWI: In the case of listed companies, Swiss law encourages a minimum participation of 30% of women on boards of directors but only 20% in management. How can this difference be explained?

C.R.B: The difference between these two percentages may be surprising, but it is easier to recruit a board member from outside than it is to recruit a member of the management.

SWI: Despite a record increase in women’s appointments last year, their representation on the boards of major companies listed on the Swiss stock exchange is barely over 30%. Are you in favour of quotas?

C.R.B: On boards of directors diversity is essential and it is important to bring together very different profiles – skills, ages, nationalities, genders, etc. But above all I am convinced that each company should be free to choose the diversity that best suits its needs. With this in mind, I am not in favour of quotas for women.

SWI: How do companies identify candidates for their board of directors? To what extent can Swiss nationals abroad be considered for these roles?

C.R.B: Proposals for candidates usually come from existing board members, shareholders and CEOs. It’s quite rare for companies to use the services of headhunters or online platforms. It is not very common for board positions to be advertised. If, for example, a Swiss company is seeking to conquer the US market, it’s of course possible that a Swiss national living in the United States would be an interesting candidate. In the case of listed companies, the search for a new board member is conducted very discreetly, as it’s important not to stray from the specific rules of ad-hoc communication.

SWI: Can board meetings be held abroad or even virtually? Can the minutes be drawn up in a foreign language?

C.R.B: Swiss law is flexible on these points. If the company’s articles of association allow it, board meetings can be held abroad or by video-link. In addition, decisions can even be taken by means of circulars. The minutes can be written in foreign languages, but if extracts are to be submitted to Swiss authorities – such as to inform a cantonal commercial register of the election of a new member of the board of directors – these extracts must in principle be written in the language of the canton in question.

Edited by Samuel Jaberg

Translated from French by Catherine Hickley/gw

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