As part of its anual review, the Ethos Foundation is tightening its guidelines on the exercise of voting rights and the priciplesof corporate governance. The Foundation Board already approved the amendments in September, according to the press release issued on Wednesday. The document serves as the basis for the voting recommendations that Ethos will make to shareholders for general meetings (AGMs) in Switzerland and abroad in 2025.

The background to this is the new rules for sustainability and climate reporting. Since 2024, larger listed Swiss companies have been required to submit their sustainability report to the AGM for a vote. Meanwhile, Ethos is addressing its evaluation of the 2024 AGM season. Additionally, developments in legislation and best practice corporate governance standards in Switzerland and abroad are being considered.

Sustainability Reports: Deteriorations Are Now Also Covered

The first change concerns requirements for the approval of sustainability reports. They are clarified. In 2024, Ethos observed that some companies stopped publishing key indicators or failed to submitted their climate targets to the Science Based Targets Initiative for approval. The updated guidelines now also address declines in transparency or sustainability strategy - setbacks that have become more common with the rise of the anti-ESG movement, which likely feels validated by Trump's election victory.

The second change relates to the composition of boards of directors. Firstly, the maximum number of mandates that a person may hold on the boards of listed companies will be reduced. A non-executive director may now hold a maximum of four mandates instead of the previous limit of five. If this number is exceeded, Ethos recommends opposing the person's election.

Board of Directors: At Least 30 Percent Women

A limit on the number of mandates in large, unlisted companies – with a turnover exceeding 450 million euros and more than 1,000 employees – is also being introduced. This is intended to take account of the particular workload due to the size and complexity of such companies.

Requirements for gender diversity on boards of directors will also be strengthened. Ethos will decline to re-elect the chair of the nomination committee – or the board chair if no such committee exists – if  women do not make up at least30 percent of the board.

Legal Transition Period Expires in Just Over a Year

This reflects the voting rights advisor's view that the representation of women remains inadequate. Many companies are still a long way from achieving the statutory women's quota of 30 percent. Ethos points out that the transitional period granted by the legislator for achieving the quota expires on January 1, 2026.

The third change concerns delisting. Since 2024, listed Swiss companies have been obliged to submit their delisting plans to shareholders for a vote. A new sub-capital on delistings has therefore been included in the guidelines.

Delisting: Fair Treatment of all Shareholders

They are intended to ensure that all shareholders are treated fairly and equitably. «n particular, they should have the opportunity to sell their shares via a public takeover bid before the company goes private.»

Founded in 1997, the Ethos Foundation currently has 254 members (pension funds, collective foundations, insurance companies, foundations), which insure around 2.4 million people and manage total assets of 376 billion Swiss francs.