[Last updated: 1 January 2024, unless otherwise noted]
In 2002, SIX Swiss Exchange (then SWX Swiss Exchange) issued the Directive on Information relating to Corporate Governance (DCG). At the same time and in coordination with the implementation of the DCG, economiesuisse – the main federation of Swiss businesses – published the Swiss Code of Best Practice for Corporate Governance (the Swiss Code) that entails non-binding recommendations and guidelines for companies. The most recent version of the Swiss Code was published in 2023. The most recently revised version of the DCG entered into force on 1 January 2023.
The DCG requires an issuer to disclose important information about its board of directors and executive management (or to give substantial reasons why this information is not disclosed) in order to maintain its listing on the SIX Swiss Exchange. The DCG itself establishes the basic principles, including the principle of “comply or explain”. Details on what information is to be disclosed are indicated in the annex to the DCG.
The DCG applies to all issuers whose equity securities have their primary or main listing on the SIX Swiss Exchange, including foreign companies. It does, however, not apply to foreign companies with a secondary listing on the SIX Swiss Exchange.
The publication of information relating to corporate governance should be limited to what is essential to investors, and should be provided in an appropriate and comprehensible form. Information relating to corporate governance is to be published in a separate section of the annual report. This section may refer to other parts of the annual report or other easily accessible sources of information (such as the company’s website). For all information prescribed in the annex, the principle of “comply or explain” applies: if the issuer opts not to disclose certain information, then the annual report must include a specific reference to this effect, and contain an individual, substantiated justification for each such nondisclosure.
The topic of corporate governance has risen in importance. In early 2013, Switzerland adopted remuneration rules for listed companies (art. 95 para. 3 of the Swiss Constitution). Subsequently, these "Say on Pay Rules" were introduced in the revised Code of Obligations (nOR). Against this background, the DCG was amended and its annex now contains a number of additional items to be disclosed by issuers subject to the Say on Pay Rules as per the nOR.
The Say on Pay Rules apply to all companies incorporated in Switzerland which are listed on a stock exchange, irrespective of whether it is a domestic or a foreign stock exchange. Foreign companies listed in Switzerland are not subject to the Say on Pay Rules and are therefore exempt from the additional disclosure provisions of the DCG. It should be noted, however, that certain Say on Pay Rules provisions with respect to disclosure of the remuneration for members of the board of directors and executive committee are incorporated by reference into the DCG and are thus also binding on foreign issuers.
The DCG requires the company to disclose information on several topics, which can be summarized as follows. For issuers subject to the Say on Pay Rules (that is, listed companies incorporated in Switzerland) additional disclosure obligations apply, which are not specified in the following chart.
As outlined above (see section 4), the SIX Swiss Exchange enforces compliance with the DCG. For example, the information relating to the compensation of a company’s executive bodies and its determination must be specific and describe the methods and standards that the company applies in detail.