Boards of Directors at Work : An Integral Analysis of Nontransferable Duties under Swiss Company Law from an Economic Perspective
Series
Dissertationen / Universität St. Gallen
Type
doctoral thesis
Date Issued
2009
Author(s)
Abstract
Board work matters. Scientific literature has recently highlighted the board as a central pillar of corporate governance. It is argued that boards are more flexible than external governance mechanisms when collecting and processing information. However, boards are also confronted with the issues of time limitations and availability of information. Ongoing legal and governance reforms worldwide require boards to demonstrate the quality of their work, namely, boards' contributions to corporate strategy, their proficiency in exercising and monitoring corporate controls, as well as demonstrating institutional competence.
Swiss Company Law explicitly states the nontransferable duties of the board within article 716a CO. However, since its enactment in 1992, a consistent interpretation of its meaning has not been achieved. Although a considerable amount of literature on the subject of nontransferable duties is available, the predominantly juristic focus has not exceeded endeavors to enhance theoretical consensus. As yet, little empirical evidence exists on how boards in Switzerland actually fulfill their responsibility.
The objective of the present study is to contribute to an improved understanding of how boards of Swiss quoted companies manage and accomplish their nontransferable duties. This objective was met through an empirical investigation and integral analysis of primary data. In order to enable a more specified appraisal of actual board work, the research strategy followed a triangulation approach in which quantitative data was collected and subjected to qualitative analysis and presentation.
The findings of this study suggest that in order to cope with the inherent complexity of their work, boards should manage and accomplish their nontransferable duties so that their limited time is not only effectively utilized, but also so that board members can invest enough personal commitment in order to be effective. In addition, the study reveals that it is vital for boards to achieve a harmonious balance between their internal and external actions in terms of guidance and directions versus delegation and in terms of control and supervision versus trust. The results of this study might be of particular interest for board members receiving peer feedback both on general perceptions of their roles and responsibilities, as well as on actual time spent on nontransferable duties. Finally, academics and the general public, such as politicians or future board members, may gain further insight into the concrete work of the board through the critical analysis provided in this thesis
Swiss Company Law explicitly states the nontransferable duties of the board within article 716a CO. However, since its enactment in 1992, a consistent interpretation of its meaning has not been achieved. Although a considerable amount of literature on the subject of nontransferable duties is available, the predominantly juristic focus has not exceeded endeavors to enhance theoretical consensus. As yet, little empirical evidence exists on how boards in Switzerland actually fulfill their responsibility.
The objective of the present study is to contribute to an improved understanding of how boards of Swiss quoted companies manage and accomplish their nontransferable duties. This objective was met through an empirical investigation and integral analysis of primary data. In order to enable a more specified appraisal of actual board work, the research strategy followed a triangulation approach in which quantitative data was collected and subjected to qualitative analysis and presentation.
The findings of this study suggest that in order to cope with the inherent complexity of their work, boards should manage and accomplish their nontransferable duties so that their limited time is not only effectively utilized, but also so that board members can invest enough personal commitment in order to be effective. In addition, the study reveals that it is vital for boards to achieve a harmonious balance between their internal and external actions in terms of guidance and directions versus delegation and in terms of control and supervision versus trust. The results of this study might be of particular interest for board members receiving peer feedback both on general perceptions of their roles and responsibilities, as well as on actual time spent on nontransferable duties. Finally, academics and the general public, such as politicians or future board members, may gain further insight into the concrete work of the board through the critical analysis provided in this thesis
Language
English
Keywords
Board
Board of Directors
Swiss Company Law
Duties
Nontransferable Duties
Board Responsibility
Board Tasks
Board Work
Verwaltungsrat
Aktienrecht
Obligationenrecht
Aufgaben
Pflichten
unübertragbare Aufgaben
HSG Classification
not classified
Refereed
No
Publisher
Difo-Druck GmbH
Publisher place
Bamberg
Number
3651
Start page
199
Subject(s)
Division(s)
Eprints ID
61739