Top Liability Risks for Board Members in Switzerland
Board Member Liability in Switzerland – What You Need to Know
Serving on the board of a Swiss company is a position of legal responsibility and strategic influence. Whether you’re a Swiss resident or an international entrepreneur, your role as a Verwaltungsrat (board member) comes with obligations defined by the Swiss Code of Obligations — and failure to comply can result in personal liability.
Switzerland’s strong legal system, business transparency, and investor-friendly climate attract companies from all over the world. But with these benefits come strict requirements for board governance and compliance.
In this article, we highlight the top liability risks for board members in Switzerland and show you how to reduce your exposure.
1. Breach of Fiduciary Duty
Every board member is legally obligated to act in the best interest of the company. Conflicts of interest, self-dealing, or advancing third-party interests over the company’s can lead to legal action — including claims for damages.
Tip: Conflicts should always be disclosed and managed transparently.
2. Failure to Supervise or Engage
Board members must actively supervise the management of the company. Turning a blind eye or rubber-stamping decisions without due diligence is not acceptable in Swiss law. A lack of engagement can be interpreted as gross negligence, especially in cases of fraud, insolvency, or accounting abuse.
3. Improper Financial Reporting
Swiss companies are legally required to maintain transparent and accurate financial records. Board members are ultimately responsible for ensuring that accounting is performed correctly and timely. If errors, omissions, or manipulations are uncovered, legal consequences can follow — even if a third party was responsible for the actual bookkeeping.
4. Delayed Response to Insolvency
If a company becomes over-indebted, the board must act quickly — including notifying the auditors and, if necessary, initiating bankruptcy. Delayed or negligent action can result in personal liability for financial losses suffered by creditors.
5. Tax and Social Contribution Violations
Swiss board members can be held personally responsible for unpaid VAT, withholding tax, or social insurance contributions. If the board fails to ensure timely payments, personal assets could be at risk — particularly if intent or negligence is proven.
6. Misleading Public Statements or Filings
Publishing false or misleading statements — whether in investor reports, the Commercial Register, or communications with authorities — can result in criminal prosecution. Honesty and accuracy in corporate reporting are not optional.
How to Limit Your Risk as a Board Member in Switzerland
✔ Conduct full due diligence before accepting a mandate
✔ Insist on regular financial and compliance reports
✔ Ensure corporate processes for accounting and governance are in place
✔ Keep written records of decisions, votes, and risk reviews
✔ Consider obtaining D&O insurance
✔ Work with experienced legal and fiduciary partners in Switzerland
SwissFirm – Trusted Board Representation for International Companies
At SwissFirm, we help founders and business leaders take advantage of Switzerland’s corporate landscape — without taking unnecessary risks.
If you're planning to incorporate a company in Switzerland and need a Swiss-resident board member, we offer secure, fully compliant solutions through our Swiss Director Service. Our board members are experienced, responsive, and supported by legal, tax, and accounting professionals.
Whether you're launching an AG, GmbH, or holding structure, we help ensure your board representation is more than symbolic — it's strategic and secure.