December 2014

On November 28, 2014 the Swiss Federal Council presented a preliminary draft of the corporate law reform and started the consultation procedure. The main proposals are:

  • Implementation of the Ordinance against Excessive Compensation in Public Companies into the Swiss Code of Obligations with certain more stringent rules (e.g., a prohibition of prospective say-on-pay votes and of compensation for non-compete covenants exceeding 12 months).
  • A target gender quota of 30% for the board of directors and the executive committee of publicly listed companies based on a «comply or explain» approach.
  • An obligation for major companies in the exploitation of natural resources industry to disclose payments made to public authorities.
  • Numerous changes in «traditional» corporate law, such as the permissibility of a share capital denominated in foreign currency, a minimum par value below one cent, a «capital band» to give companies more flexibility to increase and reduce their share capital, clarification of the requirements for distributions out of the capital reserves and interim dividends, and the enhancement of shareholders’ rights and remedies.

The consultation period runs until March 15, 2015. The date of enactment is still uncertain and not to be expected before 2017. Nevertheless, companies (in particular listed companies) should already consider the draft in their planning.