Outlook for the 2025 Swiss AGM Season: Challenges, Board Reputation and Stakeholder Management
Zurich, 20th February 2025 - The way in which decisions are made and communicated to shareholders ahead of general meetings (AGM) is having an ever greater impact on the reputation of boards of directors and their companies. AGMs are no longer just compulsory exercises. Rather, they should be seen as an important communication element for the highest management level of a company. Accordingly, more transparent communication on the development and composition of the board of directors, a clear presentation of remuneration decisions and transparency on the strategic relevance of sustainability efforts are once again expected to be in the focus of this year's AGMs. At the same time, companies continue to be confronted with diverging demands from the various stakeholder groups.
It seems that certain governance issues are here to stay. In addition to a prudent approach to challenging geopolitical developments and measures to strengthen the resilience of their companies, boards must constantly deal with the reputation-relevant issues of remuneration and sustainability and their related external perception. Management remuneration in Switzerland was perceived as (too) high by institutional shareholders in 2024. At the same time, more than ten years after the Minder Initiative, the transparency of variable remuneration was still considered insufficient. Thus, remuneration committees will once again be the focus of particular attention in 2025.
For regulatory reasons, the length of sustainability reports to be published in 2025 will continue to increase. The new disclosure requirements will lead to even more data points that will be available to market participants for their analysis. It is crucial for companies to understand how these data points are used, and which disclosures are of particular relevance to the various stakeholder groups. This is the only way for companies to prevent or at least address potential misinterpretations by key market participants such as institutional investors, rating agencies and proxy advisors. At the same time, boards and executive management must continue to strengthen their understanding of which non-financial objectives are actually of strategic relevance in order to present a credible capital allocation.
For the 2025 AGMs, it is expected that shareholders will increasingly assess the effectiveness and comprehensibility of companies’ sustainability measures when voting on sustainability reports.