Directors’ Duties in Switzerland

>> Powers and Duties in Switzerland

You must act within the powers imposed  upon you by the Swiss Code of Obligations,  the company’s articles of association and any specific power of attorney, if any. You are also required to implement the decisions approved  by the shareholders and act in accordance with any specific powers that may have been delegated by the shareholders or by the board  of directors itself.

Duties – skill and care

In exercising directors’ powers, you are required to perform the tasks with due care and in the best interest of the company.

Duties – general

As a director, you must act in a way which you think is most likely to promote the success of the company. You need to consider a number of statutory factors relating to corporate requirements, including the long term consequences of your decisions, the company’s reputation and the interests of other stakeholders such as employees, customers and the community.

Swiss corporate law provides that the directors may pass resolutions on all matters which have not been reserved to the general meeting by law or the articles of association.

Directors shall manage the business of the company to the extent it has not delegated  such management. The powers that may not  be delegated to officers or to any other third  party are:

  • approving the ultimate direction of the business of the company and giving the necessary instructions
  • determining the organisation of the company
  • determining the accounting, financial control and the financial planning of the company, to the extent necessary for the management of the company
  • appointing and removing the persons to which the board of directors has delegated the management and representation of the company
  • supervising the persons to which the board of directors has delegated the management of the company, in particular from the point of view of their compliance with the law, the articles of incorporation, by-laws and instructions from the board of directors
  • preparing the annual report and the general meeting and carrying out the resolutions adopted by the general meeting
  • notifying the bankruptcy court if liabilities of the company exceed its assets

Duties – other

There are many other areas of law that impose duties on directors and senior managers. Matters likely to be of particular relevance, depending upon the nature of the entity and its activities,  are set out below.

Tax, VAT, social security regulations

Directors must comply with all areas of tax law and regulations, and timely submit the relevant tax (cantonal, federal level, VAT, social security, etc) returns to the tax authorities and make sure that the company is able to pay taxes when they fall due.

A personal liability of directors may arise for payment of the company’s taxes on federal and cantonal levels. In particular, in case of the withholding of federal taxes and federal corporate income taxes, corporate directors of a company are jointly liable for the payment of the taxes owed by the company if the company has transferred its domicile abroad.

Corporate directors will, however, not be held liable if they can prove that they have taken all the measures which could be required from them in order to enable the company to pay the outstanding taxes.

It may constitute a criminal offence if the company fails to deliver certain information or delivers false information pertaining to withholding tax and corporate income tax collection to federal authorities.

Health and safety

Directors can be subject to criminal and civil liability for the breach of provisions regarding environment, water protection, health and safety, in particular in the case of breach of specific orders by authorities relating to the protection of the environment. The failure to prevent such breach, under various laws (depending on the respective industry), may also lead to criminal

and civil liability. Any serious accidental injuries and environmental breaches must be reported in accordance with company policy if applicable. In extreme cases, the board members may become personally liable.

In general, the company has to pay due regard to the employees’ health, in particular when issuing directives and policies.

Anti-trust laws

In general, the Cartel Act focuses on agreements between undertakings affecting competition, abuses of dominant positions and merger control. Generally, the Cartels Act follows the respective EU provisions, but taking into account the legal and economic conditions prevailing in Switzerland. It is crucial that directors have

an understanding of these regulations since violations may result into substantial damages and other adverse consequences.

Liability of directors may occur due to the violation of anti-trust laws and/or failure to prevent such a violation. Infringements of a previous Federal Competition Commission decision or of an amicable settlement approved by the Federal Competition Commission can also amount to criminal offences (Article 54, Cartels Act). An additional fine of up to CHF100,000 (approx. EUR91,500) can be imposed on the individuals responsible for such infringements. Imprisonment cannot be awarded for such infringements.


The Swiss Criminal Code prohibits active and passive bribery of Swiss officials and bribery of foreign public agents, granting and acceptance of an advantage, and (based on the statutes of unfair competition) private corruption. Regarding possible liabilities of corporate directors, the topic of bribery primarily arises with respect to possible questionable payments to Swiss or foreign officials in the framework of the acquisition of state contracts, as well as the offering or receiving of questionable payments in the framework of private tender offers. In terms of the liability of corporate directors the bribery of foreign public officials and private bribery are relevant. Notably, the provisions regarding bribery of Swiss public officials are almost identical, with the exception that they address specific Swiss officials.

Latest version updated 10th April 2018

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