22 December 2023

Non-financial report (Swiss CO): duties of the General Meeting and Board of Directors

  • Articles
  • Compliance
  • Legal
  • Governance / ESG
  • Regulatory Compliance

What are the formal obligations of the board of directors and the general meeting of share-holders regarding the non-financial report pursuant to Art. 964 et seq. of the Swiss Code of Obligations?

  • Dr. Martin Eckert

    Legal Partner

  • Stephan F. Greber

    Legal Associate

  • Adrian Peyer

    Legal Partner

I. Board of Directors: How should approval be given? Who must sign?

In addition to the approval of the general meeting, the law requires the approval and signature of the board of directors as the highest governing body of a company limited by shares.[1]

The approval of the Board of Directors must be given by means of a formal resolution. This is governed by Art. 713 CO and any possible internal organisational regulations. Resolutions may, for example, be passed by circular resolution or at a physical meeting of the Board of Directors, the minutes of which must be signed by the chairperson and the keeper of the minutes.

According to the wording of Art. 946c CO, the minutes must be signed by the highest governing body and therefore – e contrario – not by the individual members of the Board of Directors. In our opinion, it is therefore sufficient for the non-financial report to be signed by the chairman of the Board of Directors (and one other board member, depending on the signing rights) after it has been formally approved by a recorded Board resolution.[2]

The formal approval of the non-financial report by the Board of Directors is decisive. In this context, the signing of the report is merely declaratory and has no effect beyond approval.[3] By requiring a signature, the legislator emphasises the personal responsibility of the members of the board of directors for the accuracy of the report.[4]

II. General Shareholders' Meeting: Approval or acknowledgement?

There are differing views on whether the general meeting must actually approve the non-financial report or whether an acknowledgement is sufficient.[5]

The wording of Art. 964c CO expressly requires the approval of the general meeting of shareholders. The legislator uses the same term "approval" in connection with the "approval" of the annual financial statements by the general meeting of shareholders (see Art. 698 para. 2 no. 4 CO). In our opinion, the rules for the annual financial statements should therefore be applied analogously.

The term "approval" also contradicts the wording of Art. 735 para. 3 no. 4 CO, where the legislator expressly refers to the acknowledgement of the remuneration report.[6] Acknowledgement by the general meeting would not be in line with the intention of the legislator and is not sufficient.[7] The argument in favour of a purely consultative vote is therefore not convincing.

Consequently, in our opinion, the non-financial report must be submitted to the general meeting of shareholders, which may approve or reject it with or without reservation (cf. Art. 728b para. 2 no. 4 CO).

Approval of the non-financial report by the Board of Directors and the General Meeting is also a prerequisite for publication.[8] The consequence of non-approval is therefore that the report cannot be published as required by law. We therefore believe that the Board should ensure that the report is revised and resubmitted for approval. In our opinion, the requirement to publish the non-financial report within six months of the annual financial statements is only a procedural requirement.

We are not convinced by the view that if the General Meeting withholds approval, the Board of Directors only needs to explain the reasons for the withholding in its next report. Nor do we find it convincing that it is then no longer necessary to resubmit the report for approval at all.[9]

III. Electronic publication and storage

Immediately after approval, the report must be published on the company's website, where it should remain accessible for 10 years (in accordance with Art. 964c para. 2 and 3 in conjunction with Art. 958f CO).

However, in our view the non-financial report may also be published on the website before approval by the general meeting. In this case, we recommend to state that the report is still subject to approval by the general meeting.

Read the interview (German only) with Dr. Martin Eckert on "Nachhaltige Unternehmensführung in der Schweiz: Empfehlungen für KMUs vor Klimaberichterstattung".

[1] Art. 964c Abs. 1 OR.

[2] gl. M. Böckli Peter, Schweizer Aktienrecht, 5. Aufl., Zürich/Basel/Genf 2022, Rz. 714.

[3] Fäh Claudio, Die Anwendbarkeit des Aktienrechts auf die Schweizerische Nationalbank, Zürich/Basel/Genf 2023 (= ZStöR 287), Fussnote 1657.

[4] Art. 325ter StGB, Fäh Claudio, Die Anwendbarkeit des Aktienrechts auf die Schweizerische Nationalbank, Zürich/Basel/Genf 2023 (= ZStöR 287), Fussnote 1657.

[5] Schenker Urs/Schenker Olivier, Praxisleitfaden zum revidierten Aktienrecht, Übersichten, Gestaltungshinweise und Handlungsempfehlungen, Bern 2023, S. 368.

[6] Kaufmann Christine/Biggoer Serge, in: Berner Kommentar, Das Aktienrecht - Kommentar der ersten Stunde, Bern 2023, § 29 Konzernverantwortung Art. 964a–c OR N 34.

[7] Kaufmann Christine/Biggoer Serge, in: Berner Kommentar, Das Aktienrecht - Kommentar der ersten Stunde, Bern 2023, § 29 Konzernverantwortung Art. 964a–c OR N 34; a. M. Böckli Peter, Schweizer Aktienrecht, 5. Aufl., Zürich/Basel/Genf 2022, Rz. 714; a. M. Forstmoser Peter/Küchler Marcel, in: Schweizerisches Aktienrecht 2020, Mit neuem Recht der GmbH und der Genossenschaft und den weiteren Gesetzesänderungen, Bern 2022, Art. 964c OR N 4.

[8] Art. 964c Abs. 2 Ziff. 1 OR; gl. M. SIX-Nachhaltigkeitshandbuch, 11.2023, S. 27.

[9] SIX-Nachhaltigkeitshandbuch, 11.2023, S. 27.
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