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The board of directors<\/strong> is the supreme governing body of a Swiss company. Its duties are set by the Swiss Code of Obligations (CO), which grants it non-transferable and inalienable powers<\/strong> (Art. 716a), a duty of care<\/strong> (Art. 717) and reinforced financial duties<\/strong> since the 2023 reform (Art. 725 ff.). This guide explains the board’s obligations, its general principles and its specific duties \u2014 the framework of corporate governance for any Swiss SA.<\/p>\n<\/div>\n The Board of Directors (BoD) plays a fundamental role in the management and direction of a company. Its responsibilities are governed by both general principles and specific duties, clearly defined in the Swiss Code of Obligations. These guidelines establish the non-transferable and inalienable powers of the Board of Directors, as well as the specific duties it must assume.<\/p>\n In accordance with Article 716a of the Swiss Code of Obligations, the BoD is vested with non-transferable and inalienable powers. The exclusive powers of the Board of Directors include, but are not limited to:<\/p>\n Additionally, the board of directors has the option to delegate to its members, individually or grouped in committees, the responsibility to prepare and execute its decisions, as well as supervise specific areas. It ensures that its members have the necessary information.<\/p>\n The Board of Directors has the duty to exercise rigorous financial control, establishing the company’s financial plan and exercising high-level oversight over those in charge of management. This oversight aims to ensure compliance with prevailing laws and regulations.<\/p>\n Under Article 717 paragraph 1 of the Swiss Code of Obligations, the BoD is bound by a duty of diligence. This obligation requires prudent and careful conduct in managing the affairs of the company.<\/p>\n Among the specific duties imposed on the Board of Directors, the maintenance of an early warning system holds a prominent place. This system is based on balance sheet tests and involves constant monitoring of the solvency of the company.<\/p>\n Article 725 paragraph 1 of the Swiss Code of Obligations states the obligation to monitor the solvency of the company. In the event of insolvency risk within six months, including a possible request for a concordat moratorium, the Board of Directors must take remedial measures.<\/p>\n The Board of Directors must also be vigilant regarding capital loss, as defined in Article 725a of the Swiss Code of Obligations. When equity falls below share capital, reserves, and accumulated losses, corrective measures or proposals for measures are necessary.<\/p>\n In cases of overindebtedness, as described in Article 725b of the Swiss Code of Obligations, the Board of Directors has the duty to file for bankruptcy, except in exceptional cases provided by law.<\/p>\n In summary, the Board of Directors is entrusted with general and specific obligations aimed at ensuring the financial health and legal compliance of the company, closely monitoring key indicators such as solvency, capital loss, and overindebtedness. Adhering to these obligations is essential to ensure the viability and compliance of any business.<\/p>\n Swiss corporate governance rests on two levels: binding law and soft law. The Swiss Code of Obligations<\/strong> sets the binding duties of the board (Art. 716a, 717, 725 ff.), while the Swiss Code of Best Practice for Corporate Governance<\/strong> (economiesuisse, revised in 2023) provides non-binding recommendations aimed mainly at listed companies. The 2023 revision of Swiss company law reinforced the board’s financial duties, remuneration transparency for listed companies and gender representation on governing bodies.<\/p>\n Every Swiss company must also be represented by at least one person domiciled in Switzerland \u2014 for an SA, a member of the board or an officer (Art. 718 para. 4 CO). For a company owned from abroad, My Swiss Company SA meets this requirement through its Swiss resident director and manager service<\/a>.<\/p>\n Under Article 716a CO, the board holds exclusive, non-transferable powers: directing the company’s overall strategy, setting the organizational structure, defining accounting and financial control, appointing and revoking management, supervising management, preparing the management report and the general assembly, and \u2014 for listed companies \u2014 the remuneration report.<\/p>\n<\/p><\/div>\n Under Article 717 para. 1 CO, board members must act with diligence \u2014 prudent and careful conduct in managing the company’s affairs \u2014 and safeguard the company’s interests in good faith. Breaching this duty can engage their personal liability (Art. 754 CO).<\/p>\n<\/p><\/div>\n The board must monitor solvency (Art. 725 CO) and take remedial measures if insolvency is likely within six months; act on capital loss (Art. 725a); and, in case of over-indebtedness (Art. 725b), notify the court, except in the exceptional cases provided by law. These financial duties were reinforced by the 2023 reform.<\/p>\n<\/p><\/div>\n<\/section>\n The board of directors of a Swiss company holds non-transferable powers (Art. 716a), a duty of care (Art. 717) and reinforced financial duties (Art. 725 ff.) on which its members’ liability depends. Sound governance means documenting these duties and maintaining a credible presence in Switzerland \u2014 including at least one resident representative. My Swiss Company SA \u2014 Corporate Services Provider in Geneva, Lucerne and Zug \u2014 supports the governance and administration of Swiss companies, including Swiss resident director and manager services<\/a>. To go further on the director’s role, see our guide on the role of a company director in Switzerland<\/a>.<\/p>\n<\/div>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The Board of Directors is essential for the management and direction of businesses, with its responsibilities defined by the Swiss Code of Obligations. This framework regulates its unique and inalienable powers, as well as its specific duties in the exercise of its functions.<\/p>\n","protected":false},"author":3,"featured_media":3883,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[38],"tags":[51],"class_list":["post-4796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trustee-manager-mandate","tag-en"],"_links":{"self":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts\/4796","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/comments?post=4796"}],"version-history":[{"count":3,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts\/4796\/revisions"}],"predecessor-version":[{"id":12258,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts\/4796\/revisions\/12258"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/media\/3883"}],"wp:attachment":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/media?parent=4796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/categories?post=4796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/tags?post=4796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Contents<\/h3>\n
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Board of Directors’ obligations and specific duties under the Swiss Code of Obligations<\/h2>\n
General principles<\/h3>\n
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Specific duties<\/h3>\n
Legal framework and the Swiss Code of Best Practice<\/h2>\n
FAQ: duties of the board of directors in Switzerland<\/h2>\n
What are the non-transferable powers of the board of directors in Switzerland?<\/h3>\n
What is the board’s duty of care?<\/h3>\n
What must the board do in case of insolvency or over-indebtedness?<\/h3>\n
Sources<\/h2>\n
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Conclusion<\/h2>\n