Facts
In this case, the issue was whether the mandate of the members of the board of directors of a public limited company (Aktiengesellschaft) also ends if, contrary to Art. 699 para. 2 of the Swiss Code of Obligations (CO), no general meeting is held within six months of the end of the financial year or the election of the board of directors is not on the agenda.
The appellant (A. AG) argued that in such a case, the mandate of the board of directors would be tacitly extended. However, the Federal Supreme Court dismissed the appeal and ruled that the office of the board of directors ends in this case upon expiration of the six-month period under Art. 699 para. 2 CO.
Considerations
The Federal Supreme Court justified its decision as follows
A tacit extension of the mandate of the board of directors would contradict the inalienable right of the general meeting to elect the members of the board of directors (Art. 698 para. 2 no. 2 CO). Otherwise, the board of directors could extend its own mandate by not convening the general meeting, which would undermine the shareholders' right to vote.
As the Federal Supreme Court has emphasized in previous decisions, the expression of the will of the general meeting must be respected. If the election fails due to a deadlock, the office…