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How are members of boards of directors in Switzerland remunerated?

swissVR Monitor II/2018 – Focus: Compensation of boards of directors members

Those sitting on a board of directors these days bear a lot of responsibility and are in the spotlight. How should this strategic management be remunerated? As revealed by our survey, in most cases a fixed sum is paid out that is geared to the time outlay. However, performance-based remuneration can make sense. We have also found out that smaller companies also actively address corporate governance issues.

The key results

The fourth swissVR Monitor is based on a survey of 344 members of Swiss boards of directors. As well as the detailed questions concerning remuneration, we also asked the persons canvassed about their assessment of the economic and business prospects, the impact of regulation and structural issues. The half-yearly survey is jointly conducted by swissVR, a leading association of board of directors members, consulting firm Deloitte and Lucerne University of Applied Sciences and Arts.

swissVR Monitor II/2018 – Focus: Compensation of boards of directors members

Interview with Reto Savoia and Cornelia Ritz Bossicard

Cornelia Ritz Bossicard, President of swissVR, and Reto Savoia, Deputy CEO of Deloitte Switzerland, answer the questions of journalist Amanda Kaynes:

  • Upon which criteria should members of boards of directors be remunerated?
  • Is variable remuneration based on the business results a sensible option?
  • Should BoD members receive additional remuneration in the event of crises and other unforeseen events?
  • What is the impact of remuneration transparency within the body?
     

It is testimony to responsible corporate governance if the remunerations of the Board of Directors and Executive Board are based on different criteria.

Reto Savoia, Deputy CEO of Deloitte

The discussions about the salaries of top managers have had a positive effect: Transparency has gained significance and become an important, confidence-building factor.

Cornelia Ritz Bossicard, President of swissVR

Assuming several mandates is something that has to be considered carefully as the work has become more time-consuming and complex over the last few years. Collectors of mandates have become obsolescent.

Prof. Christoph Lengwiler, lecturer at the Institute of Financial Services Zug IFZ, Lucerne University of Applied Sciences and Arts

Chart: Members of Boards of Directors provide information about key aspects of their remuneration

Positive business prospects remain unchanged

According to the regular economic survey carried out by swissVR Monitor, 60% of the BoD members canvassed expect their business to develop positively over the next 12 months. The business prospects are thus altogether assessed slightly more negatively than six months ago (64%) but remain more positive than the outlook for the economy (54%) and own sector (46%).

The BoD members from the IT sector (76%) and from manufacturing (73%) view their business prospects most positively, while the positive assessments for the retail sector and the consumer goods industry (57%) and for the financial services industry (51%) lie below the overall average.

About the survey

The swissVR Monitor is a survey conducted jointly by swissVR, Deloitte and the Lucerne University of Applied Sciences and Arts. Every six months, this survey will gauge the attitudes of members of Swiss company boards of directors towards the outlook for the country’s economy and their sector. It will also gauge their attitudes towards current matters of relevance to boards. Each issue of swissVR Monitor will also explore a focus topic in greater detail. The surveyed board members represent firms from SMEs to listed companies across a range of sectors. With 334 members surveyed it is an accurate reflection of the attitudes of boards of directors in Swiss companies.

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