Who belongs to the board of directors of a bank

Swiss banks often rely on broad-based boards of directors. However, bigger isn’t always better.

The Bank’s Board of Directors is an important component of corporate governance, as it is responsible for monitoring and controlling business activities. This also raises the question of the appropriate size of the supreme supervisory body. It is often heard that boards of directors are increasingly exhausting themselves on the fronts, and therefore these bodies should be increased in terms of staff.

It’s not that simple. The optimal level depends, among other things, on the bank’s history, ownership structure, desired diversification, or modus operandi. Experts usually recommend seven to nine members to work efficiently and effectively and adequately staff the committees, which is becoming more and more important.

Consider advice

According to one investigation From the Lucerne University of Applied Sciences and Arts (HSLU), Swiss banks have maintained this range well over the years. In two-thirds of the 73 banks surveyed, the board of directors consists of seven to nine members. The average is 7.1 members.

The spectrum ranges from four to 13 board members. Zürcher Kantonalbank (ZKB) is at this extreme, and its board of directors is still heavily influenced by politics. The regional institutes Bank BSU and Bank Zimmerberg, whose board of directors consists of four people, show that things can be on a smaller scale.

tendency to shrink

Interestingly, according to the study authors, the size of the board of directors does not necessarily depend on the size of the bank. In this respect, there can be no excuse for the Bank to surround itself with as many people as possible on the Board of Directors simply because of its size. More crucial, for example, is what culture of discussion and error is cultivated or which mindsets are represented.

According to the study, the size of the supervisory board has decreased slightly over the past ten years. While the average in 2021 was 7.8 members, in 2022 this figure was 7.1 members. The decline in retail banks was more noticeable.

correct career ladder

At least the competencies gathered in the board of directors are as important as their size. In general, front-line sales experience is key for leaders to rise to the top ranks of a company, ie finews.ch mentioned.

In order to qualify for election to the Board of Directors, responsibility for the results of the business unit is a key requirement. Men in particular bring this backpack with them, while women score lower on this experiment.

The roots of the gender imbalance in the board of directors go back to the early stages of the career ladder. This continues in CEO positions and also results in no female candidates for a seat on the Board of Directors.