A Swiss board member bears substantial responsibility towards the company, shareholders and stakeholders. This role also carries potential liability. Practical precautions and knowledge of Swiss company law are essential. This article provides useful tips for avoiding liability claims.
1. Understand Swiss company law
Understand the fundamentals of Swiss company law and the rules relevant to your board duties. Keep your knowledge current and consult an experienced legal adviser where needed.
2. Carefully assess a board appointment
Before accepting a board appointment, conduct thorough due diligence on the company's finances, operations and legal position. Ensure you have sufficient information to perform your duties responsibly.
3. Fulfil your duty of care
Board members owe a comprehensive duty of care. Perform your duties conscientiously: stay informed about operations, make informed decisions and assess risks appropriately. Document your decision-making so your actions are transparent and understandable.
4. Remain independent and avoid conflicts of interest
Maintain independence and avoid conflicts. Always act in the company's best interests rather than prioritising personal interests. Disclosure of potential conflicts and compliance with ethical rules are essential to trust and integrity.
5. Responsible corporate management
Good governance and effective management are essential to minimise risk. Establish clear responsibilities and controls, appropriate compliance measures, regular reviews and internal checks.
6. Involve experts
For complex legal or financial questions, involve external experts. An experienced lawyer or auditor can provide valuable support and help avoid liability pitfalls. Professional assistance helps you fulfil your responsibilities.
7. Obtain insurance
Various Swiss insurers offer cover for corporate officers, generally called D&O insurance. This stands for 'Directors and Officers liability insurance'. Although these policies often do not cover every risk, obtaining advice on insurance is worthwhile.
Swiss board members should understand liability risks and take preventive measures. Knowledge of company law, careful acceptance of appointments, fulfilment of care duties, avoidance of conflicts, responsible governance and expert support can substantially reduce exposure. Consult one of our experienced lawyers for advice on your individual situation.