The board of directors is responsible for supervising the company. Its duties are set forth in the Swiss Code of Obligations.
The board of directors is the supreme supervisory and organizational body. According to the Swiss Code of Obligations, the board of directors manages affairs itself or entrusts management duties to a third party (which is generally the case). In accordance with the law, the board of directors has seven non-transferable, inalienable duties (Article 716 of the Swiss Code of Obligations):
- The board of directors is the company's senior management body which issues the necessary directives
- The board of directors determines the organization of the company
- The board of directors is responsible for the organization of the accounts, financial audits and financial planning
- The board of directors is responsible for appointing and dismissing the management and drafting representation reports
- The board of directors supervises the management of the company in compliance with the laws, articles of association, regulations and directives
- The board of directors is responsible for the drafting of management reports, the preparation of the general meeting and the application of its decisions
- The board of directors must refer any case of over-indebtedness or insolvency of the company to the courts.
These senior management tasks also present certain risks for the board of directors. According to Article 754 of the Swiss Code of Obligations, the board of directors is responsible for unfair debts which damage the company, shareholders or creditors. A typical example is failure by the court to give an opinion in the event of over-indebtedness. The board of directors is jointly liable and each member may be prosecuted for the full amount of damage.
