Corporate Governance: Is Switzerland Outpacing Europe? A Comparative Legal Analysis of Current Developments

Abstract

The article discusses the most recent corporate governance developments both in Switzerland, in the aftermath of the adoption of the so-called ‘Anti-Rip-off’ Initiative, and in the EU, based on the Action Plan ‘European Company Law and Corporate Governance’. Compared with previous EU Green Papers, the reforms envisaged in the Action Plan issued by the European Commission on 12 December 2012 are moderate and rather cautious. In Switzerland, the adoption of the ‘Anti-Rip-off’ Initiative on 3 March 2013 was a game-changing political decision for the future development of corporate governance in listed corporations. There are many parallels between the most recent developments in Switzerland and the EU. Both jurisdictions see the enhancement of transparency and the increase of shareholders' sense of responsibility when it comes to corporate governance as key objectives. At the same time, differences are emerging between the strategies used in each jurisdiction. While the EU is strengthening both the legal position and the autonomy of shareholders, Switzerland is imposing legal obligations on shareholders to ensure appropriate engagement. This raises the fundamental question of whether the aim of sound corporate governance is better served by the enhancement of transparency and shareholder rights or by intensified legislative intervention. Against this backdrop, this comparative legal article analyses selected reform efforts to strengthen the role of shareholders and to improve transparency on the part of companies, institutional investors, and proxy advisers.