November 2016

After a preliminary draft had been put forward in 2014 and consultation proceedings were carried out, the Swiss Federal Council presented on November 23, 2016 its new draft of the corporate law reform along with the explanatory report (Botschaft) and submitted it to parliament. The main proposals of the draft and the main differences to the preliminary draft of 2014 are:

  • The Ordinance against Excessive Compensation in Public Companies is implemented into the Swiss Code of Obligations. Several proposals to further tighten the compensation régime for listed companies have been dropped.
  • A target gender quota of 30% for the board of directors and 20% for the executive committee of publicly listed companies on a "comply or explain" basis is proposed. This is in line with the preliminary draft except that the percentage for the executive committee has been reduced.
  • Major companies in the exploitation of natural resources industry would be required to disclose payments to public authorities (as already included in the preliminary draft).
  • Numerous changes in "traditional" corporate law, such as facilitating the process of incorporating and dissolving companies under simple circumstances, permitting 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 capital reserves and interim dividends, and the enhancement of shareholders' rights in terms of better corporate governance.

The draft law is now being submitted to parliament. While the new law will not be enacted before 2018, in particular listed companies should already consider the draft law in their planning.