Inrate AG

Highlights of the General Meeting Season 2018

For the tenth time this year, the zRating study on corporate governance in Swiss public companies was published. This year, zRating analyzed the corporate governance of 176 listed Swiss companies on the basis of 59 criteria. The analysis was based on the Annual Reports 2017 and the General Meetings for shareholders 2018. The criteria were weighted in a scoring model and evaluated with points. The sum of the points was a maximum of 100.

The top places in this year's overall ranking

The highest scores were achieved by Sunrise Communications (87 points), followed by Burkhalter (81 points) and Schaffner (79 points). While Sunrise Communications had already reached third place in the previous year, Burkhalter moved up 67 places. As a result of the resolutions passed at the extraordinary General Meeting on June 11, 2018, Sika was even able to improve by 126 places. The increase of HIAG Immobilien's ranking by 65 places is also worth mentioning. All four companies undertook an extensive revision of the Articles of Association and in particular strengthened the shareholders' participation rights. In the case of Sunrise, Burkhalter and HIAG, the Board of Directors delegated the delisting authority to the General Meeting. Christophe Volonté, Head of Corporate Governance at Inrate, comments: "Companies can move in the right direction even without a revision of stock corporation law, as the company's articles of association provide the necessary freedoms." In this context, however, there is still a lot of room for improvement. Minority shareholders should have more influence in the BoD election through unrestricted and transparent nominee registration or certain election modes such as "majority of the minority". In addition, the entire voting process could be improved by block-chain technology.

Board members close competence gaps in digitization

Board members are often assessed in terms of their independence (including proximity to major shareholders or other conflicts of interest), the proportion of women, the number of third-party mandates held by members and their term of office or age. Surprisingly, the most important factor, the competence of the Board of Directors, is often neglected. According to our findings, zRating is the first and only voting rights advisor to systematically take into account the competencies of the Board members since 2017 and thus contributes to a more comprehensive Board assessment. Today, the business world is faster, more complex and more international. It is therefore inevitable that this is reflected in the Board of Directors, that the Board of Directors is broadly based and combines as many competencies as possible. In 2018, 13 committees were able to close their competence gaps completely. In 20 % of the committees, all competencies are now available, compared with 14 % in the previous year. The gaps mainly concerned the digitization competence. Around 20 % of all newly elected members have digitization competencies (10 % of existing members).

Further important findings of the zRating Study 2018

The zRating 2018 study also highlights significant findings on ESG criteria in compensation systems, shareholder engagement, board structures and minority shareholders in the context of BoD elections in five key areas. It also presents the overall ranking of this year's zRating, explains our unique methodology and describes and explains the catalogue of criteria on which the zRating is based.

This year Inrate has also established an independent "zRating Board of Experts". The main objective of the Board is to record the development of corporate governance from various angles. The independent expert view should ensure the further development and quality assurance of the voting recommendations (directive) and the governance rating (catalogue of criteria).