What is Proxy voting?

Proxy voting is a mechanism that allows shareholders of a company to delegate their voting rights to another person, known as the proxy, to vote on their behalf at shareholder meetings. This system is commonly used in companies with a large number of shareholders, especially when shareholders are unable to attend meetings in person. In Switzerland, proxy voting is governed by corporate governance laws and is an important part of ensuring shareholder participation in corporate decision-making.

Key Features of Proxy Voting

  • Representation at Shareholder Meetings: Through proxy voting, shareholders can ensure that their vote is counted even if they cannot physically attend the meeting. The proxy may be a fellow shareholder, a corporate representative, or a third party.
  • Voting Rights Transfer: The proxy receives the voting rights of the shareholder but is required to vote according to the instructions given by the shareholder or, in some cases, at their discretion.
  • Flexibility for Shareholders: Proxy voting allows for greater flexibility and increases shareholder engagement, as it allows for voting without the need to be present at the meeting, making it easier to participate in corporate governance.

Proxy Voting in Switzerland

In Switzerland, proxy voting is governed by the Swiss Code of Obligations and the regulations set out by the Swiss Financial Market Supervisory Authority (FINMA). These regulations ensure that the process is transparent and that shareholders’ rights are protected.

  • Voting Instructions: Shareholders typically provide their proxies with specific instructions on how to vote on the various resolutions presented during the meeting. If no instructions are provided, the proxy may vote at their discretion, depending on the company’s articles of association.
  • Legal Requirements: Companies in Switzerland are required to make provisions for proxy voting in their corporate governance documents, and shareholders must be informed of their rights to vote by proxy before the meeting. Additionally, the use of proxies must comply with rules regarding conflict of interest and transparency to ensure that the voting process is fair and accountable.

Proxy voting plays a crucial role in corporate governance, particularly in Switzerland’s highly regulated financial markets, enabling shareholders to have a voice in the decisions that affect the company, even if they are not physically present at shareholder meetings.