The ethos investment Foundation has put a resolution on the agenda of the General Meeting of the CS Group of 1st June 2001 requesting the following addition to the group's Articles of Association:Art. 16 paragraph 3 (new) "The Board takes the appropriate measures to ensure its independence".
The Board of Directors must be able to carry out its work independently and objectively. To do this, it must be organised appropriately and include a sufficient number of independent members. An independent board member is someone who is not linked to the company in any way that may impair his objective participation in the work of the Board or expose him to conflicts of interest. An independent Board of Directors makes an important contribution to the success of a company, both for its shareholders and for the majority of its other stakeholders. It is for this reason that the ethos investment Foundation urges the Board of the CS Group to take all appropriate measures to ensure its independence.
During last year's General Meeting of the CS Group, the ethos Foundation opposed the election of Mr Lukas Mühlemann to the Board of Directors. During the dialogue between ethos and the CS Group, the latter confirmed that it did not wish to take any particular measures to ensure the independence of the Board of Directors, despite the fact that Mr Mühlemann held simultaneously the posts of Chairman of the Board and Chief Executive Officer.
As described in detail in chapter 2 of the ethos voting guidelines, the ethos Foundation is particularly committed to the ideal of Board independence. Indeed, a Board with a sufficient number of independent members makes an important contribution to the success of a company, both for its shareholders and for the majority of its other stakeholders.
It is for this reason that ethos has put a resolution on the agenda of the General Meeting of the CS Group of 1st June 2001. It aims to promote the independence of the Board of Directors in accordance with the codes of good practice regarding corporate governance. The resolution, and an explanatory text, are attached to this press release. Given the Swiss Code of Obligations, the only possiblity to put such a request on the agenda is via an amendment to the Articles of Association of the CS Group.
It is regrettable that the Board of Directors of the CS Group has proposed the rejection of this resolution, under the pretext that "this amendment to the statutes would have as its sole consequence the unnecessary repetition of a legal principle recognised as applying to companies quoted on the stock market". It should be noted that there are no legal principles mentioning the independence of the Board; it is only referred to in the codes of good practice regarding corporate governance. The Swiss Code of Obligations (art. 716a) only specifies that the Board must "exercise overall supervision over the persons responsible for management". The current operating rules of the CS Group show, unfortunately, that the requirement of independence of the Board is indeed necessary; on these grounds, it merits inclusion in the company's Articles of Association.
Moreover, ethos is surprised that the Board of Directors refused to publish an 8-line explanatory text, intended to inform shareholders of the reasoning behind the resolution and its implications. Such an attitude is contrary to the right of free expression of shareholders.
The ethos Foundation is convinced that all individual and institutional shareholders committed to the ideal of Board independence will support the resolution presented by ethos.
