The revised economiesuisse Swiss Code of Best Practice for Corporate Governance (the “Code”) incorporates many elements of relevance to today’s companies, even to those for whom the Code does not apply directly. The changes made, effective as of 2023, underline the importance of seeing the link of governance to topics such as culture, sustainability, and diversity.
While the Code is primarily targeted at publicly listed firms, it can be understood as evidencing good governance market practices in Switzerland. It also reflects recent legal changes such as those from the reform of the Swiss Code of Obligations (CO), which took effect on January 1st, 2023. Those changes include, for example, a requirement of balanced representation of the genders on the Board of Directors and Executive Management and for reporting on non-financial matters.
Swiss market practices, of course, are also influenced by larger international developments. For example, the Code’s effort to balance legal, regulatory, and social considerations can also be seen in the UK Corporate Governance Code (last updated in 2018) and the German Corporate Governance Codex (updated annually).
Because the Swiss Code of Best Practice serves as a useful reference point, companies may wish to consider this revision in reviewing and advancing their own work on governance, risk management, compliance, culture and ESG. In this context, it would also bring value for companies to review their performance management and compensation systems and assess how well they are serving to support the company’s goals in these areas.
Among other things, HCM works with clients in helping make this important alignment. Feel free to contact Linda Kohri at linda.kohri@hcm.com or your regular contact at HCM.