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How active are the shareholders of Swiss listed companies and what is their role?

Posted by
Swiss Finance Institute
on
Tuesday, December 20, 2016 - 14:00

The participation of owners in shaping their companies is an important pillar of the corporate governance framework (click here for a short overview of the governance cycle). By voting at AGMs and engaging with the company’s board, shareholders set the boundaries within which the board of directors, management, and employees can act. Shareholders’ active participation at AGMs is necessary for market discipline. Looking at shareholder participation, the most recent SFI White Paper reveals the following:

 

  • Market discipline has increased significantly in importance recently as a result of stronger shareholder rights (a consequence of the OaEC) and the increased participation of shareholders at AGMs. Average participation, measured as shares voting relative to shares outstanding, in the SFI White Paper’s sample increased from 55 percent in 2012 to 70 percent in 2016.
  • Passive investors are only passive in terms of trading activity, but can be the most active in terms of corporate governance engagement. Many of these large investors are based in the US or the UK, engage regularly with the board and management, and have a substantial impact on Swiss companies.
  • Swiss companies should provide their shareholders with more time to prepare for AGM votes, making proxy materials available earlier than the legal minimum requirement of 20 calendar days prior to an AGM.

 

Want to find out more about shareholders’ role, impact, and views? Read the SFI White Paper at www.sfi.ch/wpcorporategovernance.