Liability Issues in Swiss Company Law: What Directors and Board Members Should Know

In Swiss company law, directors and board members carry a significant responsibility towards their companies and shareholders. However, assuming such positions also entails liability risks. This blog post aims to provide an overview of the liability issues that directors and board members in Switzerland may face. Learn what you should know to safeguard yourself legally and minimize potential liability risks.

1. Duty of Care

Directors and board members have a comprehensive duty of care towards the company and its interests. They must fulfill their tasks diligently and in the best interest of the corporation. This includes the obligation to gather information, assess risks correctly, and make appropriate decisions.

1. Organizational and Oversight Duty

Directors and board members are responsible for ensuring that the company has adequate organization and effective control mechanisms. They must ensure that the necessary processes and structures are implemented to ensure compliance with legal requirements and internal policies.

1. Liability for Breach of Duties

In case of breach of their duty of care, directors and board members can be held personally liable. There is a risk of claims for damages, both from the company itself and from third parties such as shareholders, creditors, or employees. Liability can be both civil and criminal in nature.

1. Liability Limitations and Insurance

It is possible to limit the liability of directors and board members through appropriate provisions in the articles of association. Additionally, directors and officers liability insurance can be obtained to mitigate liability risks. It is advisable to carefully examine individual liability limitations and insurance options and, if necessary, seek professional advice.

1. Avoidance of Conflicts of Interest

Directors and board members must avoid or disclose conflicts of interest to maintain their integrity and independence. It is important to create transparency and make decisions objectively and in the best interest of the company. Dealing with conflicts of interest should be clearly regulated in corporate governance.

Directors and board members bear a high level of responsibility and must be aware of the potential liability issues in Swiss company law. By fulfilling their duty of care, carrying out organizational and oversight obligations, and avoiding potential conflicts of interest, they can reduce the risk of liability. It is advisable to seek advice from one of our experienced lawyers to understand the legal aspects and take appropriate measures.

Note:

This blog post is for informational purposes only and does not constitute legal advice. For specific questions related to liability issues in Swiss company law, we recommend consulting a lawyer to obtain individual advice.