Article 715a of the Code of Obligations regulates board members' rights to information, inspection and insight. Each board member may request information on all matters relating to their company. However, this right to information applies within board meetings to other board members and company managers, whereas outside these meetings it applies to the latter with regard to the course of business.
Board members may also request books and records to the extent necessary for performing their duties. However, outside board meetings, any request for information on a specific business transaction or for access to the company's books and records must be authorised by the board chair or, in the event that the chair rejects the request, by the board as a whole.
In a recent decision, the Federal Supreme Court considered – for the first time – whether these information rights can also be asserted on an appeal basis. Among other things, the court also commented on the type of procedure applicable in such cases.(1)
A board member made a request to the Federal Supreme Court to access the books and records of a company, including:
- its share register;
- its beneficial owners register;
- all minutes of its general and board of directors' meetings; and
- its books on the course of business.
The first and second-instance courts had dismissed the request on the ground that board members' rights to information, inspection and insight under Article 715a of the Code of Obligations cannot be enforced in court. Therefore, the courts found no legal basis for the enforcement of information rights for individual board members.
The Federal Supreme Court came to the opposite conclusion, based on a different interpretation of Article 715a and a discussion of the divergent doctrines. In particular, the court stated that:
- the purpose of Article 715a was to ensure that board members can perform their duties as management and supervisory bodies effectively and efficiently; and
- Article 715a must be considered a counterpart to board members' individual responsibilities.
If the legislature assumes that the information rights granted by Article 715a are necessary for directors to be able to perform their management and supervisory duties, this speaks in favour of the possibility of enforcing these rights on an action basis. If the law grants a claim, it must in principle be assumed that it can also be enforced in court, even if this is not expressly stated.
In addition, the Federal Supreme Court held that these information rights can be enforced – by analogy with the right of shareholders and creditors to information and inspection set out in Article 250(c)(7) of the Code of Civil Procedure – in a so-called 'atypical summary procedure'. Such procedures are based on flexibility and speed, contrary to 'normal summary procedures' in which the measure of evidence requires not only plausibility, but also a standard of proof. This is due to the fact that the assessment of such a request for information is likely to lead to difficult examinations of interests and considerations. Against this background, in an atypical summary procedure, further evidence (ie, other than documents which, in the normal summary procedure, are generally the only permissible means of proof) may, under certain circumstances, also be admissible.
The Federal Supreme Court's decision should be taken into account by board members who lack evidence or knowledge of important or necessary information, particularly if it relates to the organisation of or disputed relationships within the board of directors. Each board member is in principle fully liable for any loss or damage caused by breaches of duty by other board members or the persons entrusted with the management of the company. In general, such members cannot evade this liability by invoking a lack of knowledge.
However, the possibility of enforcing the information rights set out in Article 715a of the Code of Obligations in court does not automatically lead to full insight and information for the requesting board member. Rather, the court must decide, on a case-by-case basis, to what extent the access or information is necessary to fulfil the board member's duties of care and control.
It also seems reasonable that the action should be dealt with in the summary procedure, since the need for information should usually be of an acute nature. However, atypical summary procedures may lead to drawn-out proceedings.
For further information on this topic please contact Markus Dörig at BADERTSCHER Rechtsanwälte AG by telephone (+41 44 266 20 66) or email ([email protected]). The BADERTSCHER Rechtsanwälte AG website can be accessed at www.b-legal.ch.
Endnotes
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