Top Liability Risks for Board Members in Switzerland
Understanding Board Member Liability in Switzerland
Becoming a board member (Verwaltungsrat) of a Swiss company — whether AG or GmbH — is a position of trust, responsibility, and legal accountability. While it offers influence and prestige, it also exposes individuals to significant personal liability in the event of misconduct, negligence, or non-compliance.
Swiss law imposes strict duties on board members, especially when it comes to protecting creditors, shareholders, and the public. Whether you're a resident director or an appointed external board member, it's crucial to know the legal boundaries — and risks — of your role.
Top Liability Risks for Board Members in Switzerland
✅ Violation of Fiduciary Duties
Board members must act in the best interest of the company — not for personal gain or third parties. Any conflict of interest, self-dealing, or breach of loyalty may lead to personal liability and civil claims.
✅ Negligent Management or Supervision
If the board fails to oversee company operations, detect fraudulent behavior, or ensure basic compliance, it can be held liable. Passive members who “sign but don’t check” are just as exposed.
✅ Failure to Maintain Proper Accounting
Swiss law mandates that board members ensure the company maintains accurate financial records. If the accounting is incomplete or manipulated — even unknowingly — board members may face both civil and criminal consequences.
✅ Insolvency Mismanagement
One of the most critical risks: If a company is over-indebted or near insolvency, the board must take immediate action. Failing to notify the auditors or file for bankruptcy in time can result in personal liability for losses.
✅ Violation of Tax or Social Security Laws
Unpaid VAT, social security contributions, or withholding taxes? Board members can be held personally liable for these debts, especially if they failed to implement proper payment controls.
✅ Misrepresentation to Authorities or Investors
False statements made in official filings, investor materials, or reports can trigger criminal investigations, reputational damage, and liability for damages.
📌 For a legal overview, see the Swiss Code of Obligations (Articles 717–754), which outlines the duties and liabilities of board members:
🛡️ Conduct ongoing due diligence – don’t accept mandates without reviewing the company’s finances and risk profile.
🛡️ Ensure regular reporting and financial controls are in place.
🛡️ Document key decisions and board resolutions thoroughly.
🛡️ Consider liability insurance (D&O) to protect against unexpected claims.
🛡️ Appoint qualified service providers for accounting, tax, and compliance.
RB Swiss Group – Your Strategic Partner for Safe and Compliant Board Mandates
At RB Swiss Group, we provide not only Swiss resident board members but also ensure that they are trained, briefed, and supported by compliance professionals. Whether you're forming a holding company, expanding internationally, or seeking a legal representative in Switzerland — we help minimize liability while maximizing operational efficiency.