The importance of successful board governance

In this podcast episode you will hear:

Dr. Felix Horber, who has been Secretary General of Swiss Re since 2007. A lawyer by training, he holds a doctorate in law and is a lecturer at the University of St. Gallen. He is the author of several books, and has been a part-time member of the Zug High Court for over twenty years. Dr. Horber also considers himself a 360° lawyer: in corporate life, he practises the law. In court, he helps shape the legal situation overall. And at university, he teaches law. For Dr. Horber, it’s not entirely clear where his profession ends and his hobby begins. 

He talks to podcast host, Ingo Notthoff, about his responsibility as Secretary General, the importance of effective board governance, the organisation of board meetings, good decision-making, and diversity. Dr. Horber also gives an assessment of what corporate secretaries should currently be preparing for. Here are the key questions that this podcast episode covers:

• What are the responsibilities of a corporate secretary?
• What does good board governance look like and what relevance does it have?
• What competences does a board need?
• How diverse is Swiss Re's Board of Directors?
• What characterises a good board meeting?
• How do information flows impact decision-making?
• What should corporate secretaries currently be preparing for?

*Please note: The podcast episode is available in German

The relevance of successful board governance

Dr Horber, what are the specific tasks of a corporate secretary? 

These tasks are complex. [...] One element is to ensure that the processes at Board level work. It is also about preparing and organising the meetings of the Board of Directors. But there are also other issues that determine the annual cycle. Optimised scheduling is required, keyword: corporate calendar. You need a roadmap, a meeting schedule that lets you know exactly what will be decided by the Board of Directors and when. 

In addition, the relevant legal foundations, articles of association and organisational charts need to be created and updated on an ongoing basis. The entire corporate governance framework has to function and be adapted to changing circumstances. My area of responsibility also includes organising and preparing the Annual General Meeting. So it's an interesting, diversified range of tasks.

Board governance defines, among other things, the processes and rules of cooperation within the Board of Directors, but also with the Executive Board. What does good board governance look like to you? 

That depends on the size and typicality of the company. A large company, such as Swiss Re in our case, will have to choose a different organisation than a small SME, a medium-sized company in which the entire operational management also lies with the Board of Directors. This is the initial question: How is the company structured? The organisation has to adapt to this structure.  

Good governance certainly also includes [...] compliance with the business judgement rule. In other words, we must prepare the information for the Board of Directors in such a way that it is able to make the right decisions on a well-informed basis. The second is that these decisions must be made in compliance with internal guidelines. And the third is that the decisions that are made must be free of conflicts of interest. if these three conditions are met, the decision has been made correctly, at least from a legal perspective. 

In your opinion, what characterises a good meeting of the Board of Directors?

It starts with the preparation. With agenda setting. The Board of Directors needs to know what needs to be decided on day X. Secondly, the documents that have to be submitted must be sent to the Board of Directors in a timely manner. In our case, these documents are usually sent electronically around ten days before the Board meeting so that the members have enough time to prepare. We always say that there should be at least one weekend in between before the Board meeting so that this intensive preparation can take place.  

It is then very important that these documents are prepared at the appropriate level. Level-appropriate means that you can perhaps have a presentation with all the details that are absolutely important and central to management, in which all the details are listed. This level of granularity is not always required for documents that go to the Board of Directors. The topic can be addressed at a different level. It therefore depends on who the presentation is aimed at. There is no point in sending hundreds of pages to the Board of Directors to deal with a topic that could be covered in ten pages. You should always start with an executive summary [...] otherwise the Board of Directors won't be able to quickly get an idea of X topics that will be discussed in one day.  

Of course, a good meeting requires structured meeting management on the part of the Chairman or Chairwoman, in which time constraints are adhered to and the meeting is efficiently steered towards the goal, as a decision must be reached at the end. The discussion must therefore be channelled in a goal-oriented manner. [...] Creating the management summary is sometimes really not an easy task, I'd say compressing a hundred pages into two.

There are regular new regulatory changes and requirements for companies. How do you personally keep up to date?

It's permanent learning. You have to be constantly up to date. [...] We have education sessions, which are training sessions in the Board of Directors, in which we discuss new trends, including regulatory tasks, in depth. If necessary, experts are also involved. [...] As a company, you don't just have to look at how things are now. We also need to be aware of what lies ahead in the coming years. You have to anticipate, understand regulatory developments that are happening in other jurisdictions and try to implement them in good time. This is an ongoing process that is part of the Board of Directors' job. 

From your perspective, what should companies, and especially boards of directors, be preparing for at the moment?  

We should see potential changes as opportunities. It's the attitude, the positive basic attitude. [...] Also try to anticipate, to be proactive. Otherwise you're just reactive. If you are reactive, you are ultimately on the defensive.

If you have a topic that you position well, you should also try to present a certain persuasiveness. I don't mean gaining the power of interpretation. But you should continue to work on your own skills with a healthy level of self-confidence, always with the aim of improving. 

What I also see when I look to the future is the trend towards transparency that we have been observing for years, which will continue. And I think the level of detail in reporting - as we have now seen in the example of non-financial reporting - will also continue. These are simply trends and developments that can no longer be stopped. Whether we like them or not. That is a fact of life. 

How can you prepare for crises if you are such a large company? Can you prepare at all?

I would say that you can anticipate these crises to a certain extent. You have to determine internally, if a crisis were to occur, what the nature of that crisis is. Is it a geopolitical crisis? Is it a technical crisis? Is it a financial crisis? You have to define what types of crisis there are.

Then the company has to try to determine who is responsible for which scenarios and when. There are cases - as we have seen several times in practice with cyberattacks - in which companies have not regulated internally who is in charge in such crisis situations. Is it the board of directors, is it the management? There are various paths that lead to Rome, but it must be regulated. Manuals should be developed.

Precisely for such situations, so that at least the governance is clear. Otherwise you have to clarify the governance first instead of being able to deal with the crisis directly. So I think you can already prepare certain things.

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Dr. Felix Horber

About the author

Dr. Felix Horber has been Secretary General of Swiss Re since 2007. A lawyer by training, he holds a doctorate in law, and is a lecturer at the University of St. Gallen. He is also the author of several books and has been a part-time member of the Zug High Court for over 20 years.