AC News Issue 52 / Q1 2016

AC News Issue 52 / Q1 2016

The Audit Committee News is a quarterly publication, exclusively in electronic format since 2013, which informs you about all of the latest trends in its core focus areas of corporate governance, risk management & compliance and corporate reporting. The AC News features articles penned by experts from Switzerland and many other countries around the world.

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Editorial

Dear Board members,

Acquisitions can help companies achieve their ambitious goals more quickly. However many things can go wrong in the course of a takeover. The implementation of an appropriate M&A process allows to select adequate targets, carefully plan and complete the acquisition and integrate the acquired business in a circumspect and goal-oriented manner into the company. Bryan DeBlanc speaks with Ulf Hoof, Head M&A at ABB, about the critical success factors and the important role played by the Board of Directors in this process.

In this issue, we also look at the concept of «good» corporate governance. Michèle F. Sutter-Rüdisser, from the University of St. Gallen (HSG), analyzes the collaboration between Management and the Board of Directors and looks more particularly at the asymmetry of information between both corporate bodies. Jörg Thierfelder and Michael Essner (Egon Zehnder) stress the importance of diversity in the Board of Directors’ composition and give advice in order to improve its efficiency. Andrea Abt, former manager at Siemens and member of several Boards of Directors, talks about the successes that have been achieved in the UK, where it has been decided to increase the proportion of women among Board members. Shqiponja Isufi reports on the progress made in Switzerland in this respect. Finally, Jörg Kilchmann and Karim Tejani examine the Boards’ ultimate challenge: the exercise of their duties when the company’s going concern is put at risk.

We hope that you enjoy reading this issue and wish you happy holidays and a happy new year.

Philipp Hallauer and Hélène Béguin

Corporate Governance

The principles of «good» corporate governance

«Good» corporate governance can have a very positive effect on a company. Any company that gives active consideration to this topic will reap competitive advantages. The overall responsibility regarding governance lies with the Board of Directors. The «culture of governance» is influenced by those who operate within, for and outside the company. Everybody contributes to the overall result.

Read more (PDF, in German)

What are the Board of Directors’ tasks if the company’s going concern is put at risk?

If a company faces financial difficulties that put at risk the company’s going concern, the Board of Directors plays an essential role to prevent the crisis. If it does not act in accordance with the law, the company’s existence will be endangered. In such a case, the members of the Board of Directors can be held personally liable, with serious consequences. 

Read more (PDF, in German)

Intelligence is not enough: how Boards of Directors (can) professionalize themselves

Boards of Directors play an increasingly important role and the requirements regarding their professionalism thus become higher. Of course, intelligence is a must. But what more can Boards of Directors do in order to better reach their high objectives? 

Read more (PDF, in German)

Women on Boards – the example of the UK

Today the 100 largest companies listed on the London Stock Exchange all have at least one woman on their Board of Directors. In the following 250 companies, only 23 Boards of Directors are composed exclusively of men. Has the British «Old Boys’ Network» failed in its mission? No, on the contrary: it has launched an initiative aiming to appoint women of excellence on Boards of Directors in order to increase their overall quality. In Switzerland, a positive evolution is also observed: one out of three vacancies was filled by a woman this year. 

Read more (PDF, in German)

The new «shareholder committee»: a dead-end street

The concept of «shareholder democracy» appeared several years ago in the discussion on the evolution of company law. One of the most recent proposals (which comes, as nearly always, from the United States) is to create a «shareholder committee». (in German)

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Audit Committee Handbook

The ninth extract of the Audit Committee Handbook is dedicated to fraud, misappropriation and whistleblowing.

Read more (PDF)

Risk Management & Compliance

Interview with Ulf Hoof, Head of M&A at ABB

In an interview with Bryan DeBlanc, Ulf Hoof uses the example of ABB to describe the main elements of a promising M&A process and explains the important role of the Board of Directors in case of a takeover.

Read more (PDF)

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