Virtual General Meeting in Switzerland: Legal and Technical Requirements

Since the revision of Swiss corporate law, general meetings can now be held entirely virtually on a permanent basis. This opens up new opportunities for companies: Shareholders can participate regardless of their location, logistical and organizational burdens can be reduced, and processes related to the general meeting can be further digitized.

However, a virtual general meeting is much more than just a video broadcast with electronic voting. The legal requirements for the exercise of shareholders’ rights also apply in a virtual setting. At the same time, the technical infrastructure becomes a key component of the proper conduct of the meeting.

Companies should therefore plan legal, organizational, and technical aspects together from the very beginning.

What is a virtual general meeting?

At a virtual general meeting, shareholders participate in the meeting exclusively through electronic means. Unlike a hybrid general meeting, there is no physical venue where shareholders can attend in person.

The Swiss Code of Obligations distinguishes, in particular, between:

• In-person General Meeting: Participation at one or more in-person meeting locations;
• Hybrid general meeting: an in-person general meeting with additional electronic participation;
• Virtual General Meeting: Conducted entirely by electronic means and without a physical meeting location.

These provisions were permanently enshrined in the Swiss Code of Obligations under the new stock corporation law, which took effect on January 1, 2023.

What are the legal requirements?

The virtual general meeting is governed in particular by Articles 701d through 701f of the Swiss Code of Obligations.

1. Legal Basis

A fully virtual general meeting is permitted only if the company's articles of incorporation provide for this option.

Companies whose articles of incorporation do not yet contain a corresponding provision must therefore first have the general meeting approve an amendment to the articles of incorporation.

2. Independent Proxy Holder

In the case of a virtual general meeting, the board of directors must generally designate an independent proxy in the notice of meeting.

This is mandatory for publicly traded companies. For privately held companies, the articles of incorporation may provide for an exception, subject to the statutory requirements.

3. Shareholder rights must continue to be fully protected

The key provision governing the technical structure is Art. 701e of the Swiss Code of Obligations.

The Board of Directors governs the use of electronic funds and must ensure that:

1. the identities of the participants have been confirmed;
2. votes cast at the general meeting are transmitted in real time;
3. any participant may submit motions and take part in the discussion;
4. the voting results cannot be tampered with.

Consequently, holding meetings virtually must not result in any restriction of shareholders’ participation rights. Rather, the technology must enable shareholders to properly exercise their rights digitally as well.

The article “Virtual General Meeting: Legal Framework and Practical Guide” by WEKA.

The technical platform will become part of corporate governance

The law does not mandate any specific technology or platform. For the company, however, this technology neutrality does not mean that the technical implementation can be designed arbitrarily.

On the contrary: Since key shareholder rights are exercised through the platform, its functionality is directly relevant to the proper conduct of the general meeting.

A professional solution should therefore offer significantly more than a traditional video conference.

From a business perspective, the following areas in particular should be reviewed.

Secure Identification and Access Control

Only authorized persons may be granted access to the general meeting and to the corresponding shareholder functions.

To this end, personalized login credentials, individual activation codes, or additional authentication methods can be used, for example.

The technical solution must also take into account that not every participant has the same rights. For example, shareholders, authorized representatives, members of the board of directors, the auditor, the notary, independent proxy holders, and technical operators may require different roles and permissions.

Ideally, the eligibility check is performed directly based on the shareholder data relevant to the general meeting.

Integration with the share register

For companies with registered shares, the virtual shareholders' meeting should not be considered in isolation from the share register.

Before the general meeting, the following must be clearly established:

• who is eligible to participate;
• how many shares or votes a person holds;
• what powers of attorney are in place;
• what instructions have already been given to the independent proxy;
• how changes made between the invitation and the general meeting are handled.

Reliable coordination between the shareholder registry, the registration process, and the general meeting system reduces manual interfaces and the associated sources of error.

Electronic voting must be transparent and reliable

Electronic voting is one of the most business-critical functions of a virtual general meeting.

The system must ensure that all shares entitled to vote are correctly taken into account and that the voting results cannot be falsified.

In practice, therefore, the following functions—among others—are important:

• clear allocation of voting rights;
• proper consideration of powers of attorney and representation arrangements;
• controlled start and end of a vote;
• immediate calculation of the result;
• Comprehensive documentation of the reconciliation;
• clear presentation of the results to the chair;
• Protection against multiple or unauthorized voting.

In addition, procedures should be established for handling changes, corrections, or exceptional situations during a General Meeting.

Comments, Questions, and Amendments

A virtual general meeting must not become merely a broadcast of prepared presentations.

Article 701e of the Swiss Code of Obligations (OR) expressly requires that participants be able to make motions and participate in the discussion.

The technical platform should therefore provide a clear process for speaking, asking questions, and making motions.

Depending on the event concept, the following options, for example, can be combined:

• written questions via the AGM platform;
• digital registration to request the floor;
• Live video or audio connection with a shareholder;
• a structured handoff of the floor to the chair;
• Recording and processing of unsolicited counterproposals.

In particular, the process for handling spontaneous motions should be rehearsed both logistically and technically before the general meeting.

The moderation team must know how a motion is recorded, reviewed for legal compliance, entered into the voting system, and then put to a vote.

Live Streaming and Real-Time Communication

Stable video and audio transmission is essential for a virtual general meeting. It’s not just about high-quality video.

The key point is that, pursuant to Art. 701e of the Swiss Code of Obligations, communication may take place immediately.

Companies should therefore pay attention to the following points, among others:

• sufficient system capacity for the expected number of participants;
• as little delay as possible in the transmission;
• reliable audio and video connections;
• Browser and device compatibility;
• no unnecessary installations or technical hurdles for shareholders;
• several voice channels, if necessary;
• Accessible design of the user interface.

For meetings with an international audience, simultaneous interpretation or parallel audio channels may also be required.

IT Security and Data Protection

A virtual general meeting processes various types of sensitive corporate and personal data. In addition to shareholder master data, this may include login information, shareholding data, proxies, requests to speak, and voting information.

The issue of information security should therefore be taken into account as early as the selection of a technical service provider.

For example, the following should be reviewed:

• Location of the data centers;
• Encryption during data transmission and storage;
• Access and authorization concepts;
• Multi-factor authentication for administrative accounts;
• Protection against unauthorized access and cyberattacks;
• Monitoring the systems during the event;
• Logging of security-related activities;
• Backup and recovery strategies;
• Dealing with subcontractors;
• Deletion and retention policies;
• Compliance with the Swiss Data Protection Act.

For electronic communication solutions, the FDPIC recommends, among other things, appropriate technical and organizational security measures, encryption, and a thorough review of data processing practices and the service providers used.

For publicly traded companies in particular, therefore, the range of features a platform offers should not be the sole deciding factor. Information security, data protection, and operational stability should all be part of the evaluation.

Redundancy and reliability are particularly important

At an in-person general meeting, a technical glitch can often be resolved through organizational measures. In contrast, at a fully virtual general meeting, the technical infrastructure itself serves as the meeting space.

A failure can therefore have much more serious consequences.

Article 701f of the Swiss Code of Obligations (OR) provides as follows: If technical problems arise during the general meeting that prevent it from being conducted properly, the meeting must be repeated. Resolutions adopted before the technical problems arose remain valid in principle.

Companies should therefore define a specific business continuity and emergency response plan for the general meeting.

These may include:

• redundant Internet connections at the production site;
• redundant streaming and system components;
• ongoing technical monitoring;
• defined escalation levels;
• Backup systems;
• alternative communication channels;
• Shareholder Support Hotline;
• Clearly defined decision-making authority in the event of technical malfunctions.

It is equally important to distinguish between an individual problem faced by a single participant and a systemic disruption that impedes the proper conduct of the general meeting.

How to handle such situations should be determined in advance with the legally responsible parties.

A detailed test run is essential

A virtual general meeting should not be convened for the first time on the day of the event.

It is recommended to conduct a comprehensive end-to-end test before the general meeting.

In doing so, all relevant roles should be included as much as possible:

• Chairman of the Board of Directors or Chair;
• Board of Directors and Executive Management;
• Corporate Secretary or Legal;
• Investor Relations;
• independent proxy;
• Auditor;
• a notary's office, if applicable;
• Direction and Production;
• Technical general assembly service provider.

During the rehearsal, it is important to test more than just the planned procedures.

Exceptional situations are especially valuable:

What happens if a vote has to be repeated?

What happens if a spontaneous counterproposal is made?

How is a shareholder connected live to speak?

What happens if the Internet connection is interrupted?

In the event of a technical glitch, who decides whether to suspend or continue the general meeting?

Such a trial run is therefore not only a technical dress rehearsal, but also a test of organizational governance.

Don't forget the shareholders' perspective

A technically secure solution is only successful if it is also easy for shareholders to use.

The entire process should therefore be evaluated from a shareholder's perspective, starting with the invitation.

How many steps are required to participate in the general meeting? Is the login process easy to understand? Does the platform work on tablets and smartphones? Is it immediately clear how to vote or ask a question?

Some examples of helpful things are:

• a brief technical guide included with the invitation;
• clear, step-by-step instructions;
• system checks as early as possible;
• an opportunity to provide support before the general meeting;
• a hotline or live support during the event;
• A brief introduction to the agenda items at the start of the general meeting.

Especially when an event is being held virtually for the first time, keeping the technical barrier to entry as low as possible can significantly increase acceptance.

What should be included in the notice of meeting?

The general legal requirements for convening a meeting also apply to a virtual general meeting.

In addition, shareholders should be able to clearly understand how electronic participation works.

In addition to the standard information regarding the annual general meeting, it is therefore particularly helpful to include information on the following points:

• virtual format;
• Registration Process;
• Access to the platform;
• Delivery or activation of personal login credentials;
• minimum technical requirements;
• Procedures for Votes and Elections;
• Opportunities to ask questions, make motions, and speak;
• How to contact us if you have technical problems;

A detailed technical guide can accompany the invitation itself.

Take Special Resolutions into Account Early On

Not every general meeting consists solely of recurring standard agenda items.

If, for example, amendments to the articles of association, capital transactions, or other matters requiring public notarization are planned, the virtual conduct of such proceedings should be coordinated with the relevant notary’s office well in advance.

Unusual voting procedures, controversial agenda items, or an expected high number of speakers can also influence the technical and organizational arrangements.

The agenda should therefore be reviewed for any special considerations early in the project.

What are the benefits of a virtual general meeting?

When implemented professionally, a virtual general meeting can offer benefits to both the company and its shareholders.

Participation from Any Location

Shareholders may participate regardless of where they live. This is particularly helpful for an international shareholder base, as it reduces travel expenses and geographical barriers.

Less physical infrastructure

A large event venue, seating arrangements, access controls, and various other infrastructure services may not be necessary in some cases.

Scalability

Even with a large shareholder base, a digital platform can support a large number of potential participants without the need to provide the corresponding physical capacity.

Digitized Processes

Registration, identification, voting, questions, and results can all be handled through an integrated digital process.

New Opportunities for Shareholder Communication

Information, presentations, voting, and interaction can all be consolidated on a single platform. This opens up opportunities to tailor the shareholder experience more effectively.

Virtual doesn't automatically mean easier

Virtual general meetings reduce certain physical burdens, but at the same time shift some of the complexity to the technology.

For an in-person event, the focus is on organizing a venue. For a virtual general meeting, the platform, identification, electronic voting rights, live communication, IT security, and system reliability must all work together seamlessly.

For this reason, the decision between in-person, hybrid, and virtual formats should not be based solely on potential cost savings.

Among other things, the following are relevant:

• Structure and size of the shareholder base;
• Attendance figures to date;
• international composition;
• expected number of comments;
• Corporate governance requirements;
• technical infrastructure;
• internal resources;
• Desired shareholder experience.

Conclusion: Considering Law, Processes, and Technology as a Whole

Since 2023, the virtual general meeting has been a fully recognized form of general meeting under Swiss stock corporation law.

For companies, it offers the opportunity to further digitize the annual shareholders' meeting and enable shareholders to participate from anywhere. At the same time, this creates new demands on the technical infrastructure and organizational structure.

Therefore, what matters is not just whether a general meeting can be held virtually, but how reliably the entire process chain functions.

Shareholder registries, shareholder identification, proxy arrangements, live communication, electronic voting, shareholder rights, IT security, and emergency management should be viewed as an integrated process.

Those who coordinate these areas early on, thoroughly test the technical processes, and define clear responsibilities will lay the groundwork for a secure, efficient virtual general meeting that is easily accessible to shareholders.

Virtual General Meeting with Devigus

Devigus supports Swiss companies in preparing for and conducting annual meetings, as well as in maintaining the share register. In doing so, we combine the organizational processes of an annual meeting with the necessary technical systems and our many years of experience in conducting annual meetings.

Are you considering holding your next general meeting virtually or in a hybrid format? We’d be happy to discuss with you—with no obligation—which organizational and technical requirements are relevant to your company.

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