Directors’ Duties in Switzerland

>> Liabilities and Penalties in Switzerland

Exercise your responsibilities carefully as  the consequences for failure to do so can be severe. In addition to the liability set out above, there are further situations where liability of directors may arise:

  • In general, you are personally liable before the company for damages caused by your acts or omissions in the exercising of business functions and breaches of legal or contractual
  • However, you will not be liable where the act or omission resulted from activities prior to your assignment.
  • In addition, you may become personally liable when the company’s assets become insufficient for the satisfaction of its creditors, and in case of a delay to file for bankruptcy. It should be noted such liability will only exist if there is a clear and severe breach of the legal or contractual obligations and if you acted with intent or, at least, negligently.

Either the breach of duty itself, or the imposition of one of the sanctions described above, may lead to disciplinary action being taken against you and/or limitations upon you being able to continue in your role

In addition, civil action can be brought against  the directors by shareholders or third parties.

Generally a company can be held liable for  the crimes committed by its directors or employees only if the individual director or employee who actually committed the crime cannot be identified due to the improper internal organisation of the company.

Indemnity and directors and officers  (“D&O”) insurance

The personal liability of directors is imposed by the law and cannot be limited, eg in the articles of association or by an indemnity agreement.

Indemnity agreements are not common practice in Switzerland but often a D&O insurance is put in place to protect directors (premiums to be paid by the company). At each annual general meeting, the shareholders decide on the discharge of the board members.

Delegation of authorities

The board of directors may delegate responsibilities and powers, except for its nontransferable and inalienable duties to the CEO, the management or individual directors. Regularly the daily management is transferred

to the management or a CEO. Provided that the members of the board can prove that they acted with all due diligence when selecting, instructing and supervising the persons to which duties have been delegated, they should not be held liable under Swiss law.


Latest version updated 10th April 2018

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