Board of directors The board as a success factor: composing the ideal board

1. Senior management body, issues the necessary directives
2. Definition of the organizational structure
3. Accounts, financial audits and financial planning
4. Appointment and dismissal of management and authorized representatives
5. Overall supervision of the management
6. Annual report and AGM
7. Submission of petition for debt-restructuring moratorium; notification of courts in the event of over-indebtedness.

* The law provides for additional rules and requirements for listed companies (as well as for other individual categories of companies, such as public companies, banks and insurance companies) with respect to the board of directors.

1. Sparring partner for the management
2. Link between shareholders and management
3. “Sensor” for relevant market developments
4. Shape the corporate strategy
5. “Controller” with respect to the company’s development and any necessary corrections

Given the extensive demands on the board of directors, the question arises as to its optimum size. As Vice President of the Board Foundation in St. Gallen, Roland Müller, lawyer and notary ME Advocat AG and himself a long-standing member of the boards of directors of various Swiss companies, advises the following basic rules: “There is no ideal number per se. Only one board mandate is required by law. However, with a one-person board, representation problems can arise. So for a smaller company with up to 50 employees, three board members are usually recommended, and for over 50 employees, five board members. In a large company with over 250 employees, the board of directors often consists of up to seven members. As a general rule, an uneven number of members is usually chosen in order to avoid stalemates and the need for the chairperson to cast the deciding vote, as far as possible.”

The chairperson of the board of directors has a special role and responsibility: They are the “head” of the board of directors and at the same time the primary contact person for management. This means that they are not only responsible for the management of the board in a supervisory function, but also have a monitoring, selection and assessment function with respect to the company’s management. Not least, the chairperson is also the only person on the board of directors who communicates externally.

Board members are often recruited through your professional or personal network. This may also include your bank. Another good place to start is with trade associations in your industry. If you are looking for a very specific expertise and experience profile or for “constructive disruptors” with a specific track record, it is a good idea to work with external specialists in personnel consulting or executive search.

Many companies have also set themselves the goal of significantly increasing the number of women on their board. This not only further strengthens their management in terms of leadership quality, but also lets them present themselves as an attractive employer for women on the recruitment market.

Expertise and experience are particularly important for a board mandate. At the same time, the person should also be a good match for the existing board team, the owners of the company and ultimately also the CEO and management. To achieve concrete results, it is important for a board team to respect each other and get on well with each other on a personal level. When a new person with a specific role joins the board team, it is critical to their success that the existing board members also genuinely accept this person and the role assigned to them.

Contrary to a common assumption, board members are not primarily concerned with monetary compensation. With few exceptions, they are primarily interested in the opportunity to make their unique contribution and help shape a company, so as to be an important part of a success story.

Approach a suitable person directly and explain to them why they would fit into your team as a member of the board and how they can assume responsibility in your company.