The Ethos Foundation has announced stricter guidelines for voting recommendations at annual general meetings (AGMs) in order to enhance corporate governance and sustainability practices.
The changes reflect a growing emphasis on sustainability reporting, gender diversity on boards, and fair treatment of shareholders, particularly in the context of delistings.
The new guidelines are a response to evolving regulations surrounding sustainability and climate reporting.
Larger listed Swiss companies will be required to present their sustainability reports for shareholder approval at AGMs starting in 2024.
This lack of transparency and commitment to sustainability is concerning, especially in light of the recent anti-ESG movement.
One significant change in the guidelines is the reduction of the maximum number of mandates that a non-executive director can hold on the boards of listed companies from five to four.
This decision aims to ensure that directors can dedicate sufficient time and attention to their responsibilities, thereby enhancing corporate governance effectiveness.
The guidelines will also enforce stricter requirements for gender diversity on boards.
If women do not comprise at least 30 percent of the board, Ethos will refuse to support the re-election of the chair of the nomination committee or the board of directors.
The updated guidelines also focus on delisting procedures.
Listed Swiss companies are now required to submit their delisting plans for shareholder approval.
Ethos has introduced a new sub-capital on delistings to ensure fair treatment of shareholders during this process.
The Ethos Foundation, established in 1997, represents 254 members, including pension funds, collective foundations, and insurance companies, managing total assets of 376 billion Swiss francs.
The Foundation remains committed to promoting sustainable and responsible corporate practices.