Switzerland Update: Gender Representation on the Board of Directors – Things will get Serious from Next Year!

After the AGM is before the AGM. The majority of Swiss companies completed their last financial year by the end of June, and now the boards of directors and management are slowly looking towards 2026 and preparing for the next annual financial statements. The coming year will bring a special new item to the agenda of the General Meeting for certain companies: the review of gender representation on the Board of Directors.

As part of ESG’s legislative efforts in Switzerland, a new Art. 734f has slipped into the Code of Obligations in the revision of company law. This new obligation to represent both sexes on the board of directors and on the executive board has not received much attention in recent years due to the many other innovations and the longer transition periods that apply to implementation. Rather, larger companies were busy amending their articles of association or, depending on the business area, with the first non-financial reporting or due diligence and transparency reports.

What is required

However, the five-year transitional period regarding reporting on gender representation on the Board of Directors expires in 2026 (reporting obligation for the first time from the fifth financial year after introduction, entry into force took place on 1 January 2021). Thus, in the future, companies of a certain size must have at least 30% of each gender represented on the board of directors. Art. 734f CO also prescribes a minimum representation per gender of 20% for executive boards, but the legislator has granted executive boards a longer grace period, so that they do not have to meet the statutory quotas until the 2031 financial year.

Currently, women are represented on the boards of directors of the 100 largest Swiss companies with 33%. According to the latest edition of the Schilling Report (https://www.schillingreport.ch/de/schillingreport-2025/), the media/ICT and transport/logistics/tourism sectors (37% each) increase the average, while energy (21%) and manufacturing (23%) decrease it.

The largest companies in Switzerland are therefore already relatively well positioned, while SMEs may not yet have addressed this new question with the same intensity.

Who is affected

The obligation to represent both sexes on the board of directors and the executive board affects all companies that meet at least two of the thresholds set out in Art. 727 para. 1 no. 2 CO in two consecutive financial years:

• balance sheet total of 20 million francs;
• sales revenue of 40 million Swiss francs;
• 250 full-time positions on an annual average.
   

Consequences of non-compliance

There will be various reasons why a company is not able to meet the obligation of at least 30% representation per gender on the board of directors. However, this does not automatically mean that these companies are threatened with major sanctions. If a company exceeds the aforementioned thresholds but does not have the minimum representation of both sexes on the Board of Directors, this company must account in the compensation report for (a) why the required representation was not achieved and (b) what measures the company has taken to promote of the insufficiently represented sex. Thus, as in non-financial reporting, the comply or explain approach applies.

Recommended actions

Succession planning and long-term corporate development are among the core tasks of the Board of Directors. If a board of directors has not yet actively dealt with gender representation, we recommend that the following questions be addressed internally as soon as possible:

• If our company exceeds the thresholds pursuant to Art. 734f and 727 para. 1 no. 2 CO?
• If so, how have both genders been represented on the board of directors so far?
• If one of the two genders is not yet represented by at least 30%, who is on our shortlist for succession on the Board of Directors?
• If the underrepresented sex is not on this shortlist, why is that? Does the general recruiting process need to be rethought or are there other reasons why the underrepresented sex has not yet been recruited to the required (or desired) extent?
• What support measures, especially within the framework of the internal funding structures, would we like to implement in order to be able to work towards a better representation of both genders?

Even if not all companies will immediately reach the 30% threshold for both genders on the board of directors, it is important that the board of directors critically questions itself and addresses the issue. It is a central task of the top management body to define succession planning at the board and executive level and to specify strategies for the promotion of suitable external and internal candidates. Only if the Board of Directors has clarity about its own personnel structure, succession planning and possible promotion measures can it explain itself in a meaningful and comprehensible way if the 30% threshold is not reached.

By Vischer, Switzerland, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact switzerland@transatlanticlaw.com

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