What is Annual general meeting (AGM)?
An Annual General Meeting (AGM) is a mandatory yearly gathering of a company’s shareholders, where important decisions regarding the company’s governance, financial performance, and future direction are made. In Switzerland, an AGM is required for companies such as Aktiengesellschaft (AG) and Gesellschaft mit beschränkter Haftung (GmbH), ensuring transparency and accountability to shareholders.
Key Features of an AGM in Switzerland
- Agenda and Voting
- The AGM typically covers a range of important topics, such as the approval of the financial statements, election of board members, dividend declarations, and any changes to the company’s Articles of Incorporation.
- Shareholders have the right to vote on key decisions. Votes may be conducted in person or via proxy, depending on the company’s provisions.
- Mandatory Reporting
- The company’s management must present the financial performance for the year, including the balance sheet, income statement, and other reports, to give shareholders a clear understanding of the company’s status.
- External auditors may also present their report on the company’s financial statements.
- Shareholder Rights
- Shareholders are entitled to ask questions, suggest motions, and vote on various matters, including the election of board members or approval of financial statements.
- They also have the right to review the company’s corporate policies and suggest changes.
- Legal Requirements
- Under the Swiss Code of Obligations (CO), companies must hold an AGM at least once a year. For an AG, the meeting must be held within six months after the end of the fiscal year.
- The meeting must be held in Switzerland and cannot be waived by shareholders, though virtual meetings are becoming more common due to technological advancements.
Importance of an AGM
- Corporate Transparency: The AGM ensures that shareholders are kept informed about the company’s financial status and management decisions.
- Shareholder Engagement: It provides shareholders with a platform to voice their opinions, participate in the decision-making process, and influence the company’s direction.
- Legal Compliance: Holding an AGM ensures that the company complies with Swiss corporate law and provides legal protection for both shareholders and management.
The Annual General Meeting is a key event in Switzerland’s corporate governance framework, fostering transparency, accountability, and shareholder involvement in decision-making.