SMI – Supervisory Board Study 2019

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Matthias Oberholzer
June 27, 2019
7 min read
Next Generation BoardsDEIDiversity & CultureBoard and CEO AdvisoryExecutive SearchDiversity, Equity, and Inclusion Advisory
2019 marks the first year in recent history that every company on the SMI includes at least one woman on its supervisory board. 

​Russell Reynolds Associates recently undertook an analysis of the composition and compensation of the boards of the 20 companies on the Swiss Market Index (SMI). 

Key Takeaways 

  • The proportion of women among SMI supervisory board members continues to increase, reaching a high of 27 percent in 2019. Nonetheless, men still hold most board chair and committee chair positions.
  • SMI supervisory boards are also exceptionally international, as 57 percent of SMI directors do not hold a Swiss passport.
  • Compensation for board members of SMI companies varies widely. At the extremes, UBS board members receive four times as much as Swatch board members.

Gender representation has improved on supervisory boards, but is still lacking when it comes to power positions: 

2019 marks the first year in recent history that every company on the SMI includes at least one woman on its supervisory board. In total, 55 of the 206 SMI board seats are occupied by women; an increase from 21 percent to 27 percent over the past two years. Among newly-appointed supervisory board members this year, women comprised 31 percent, surpassing 30 percent for the second year in a row.1 

SMI Supervisory Board 2019.jpg

While this represents progress, it puts SMI companies on par with large public companies in other countries. As an example, women have comprised at least 30 percent of the supervisory boards of Germany’s DAX 30 corporations since 2018, in part due to legal requirements. 

The proportion of women on the 20 SMI supervisory boards varies significantly from company to company. Nine already exceed 30 percent, including Zurich Insurance Group (45 percent) and Swatch (40 percent). On the other end of the spectrum are SGS and SIKA, each with only one female supervisory board member. 

Regionally, the differences are rather small: the percentage of women in the German-speaking part of Switzerland lies at 27 percent and is slightly higher than the 25 percent in the Romandie. More significant differences exist when comparing industry categories: the percentage of women on SMI boards in the technology sector is 33 percent, ahead of financial services at 28 percent, manufacturing at 25 percent and professional services at 22 percent. 

Taking a closer look at appointment trends among SMI board members, we find women tend to be named to supervisory boards earlier in their careers than men. On average, they are six years younger (56 years old and 52 when taking office) than men (62 years old, 58 when taking office). Average board tenure for women is 7 years, shorter than men’s average 9 years. 

Looking at supervisory board chairpersons and committee chairs, the SMI administrative bodies are still dominated by men. Only one supervisory board – Swatch – is chaired by a woman, and just 11 of 69 supervisory board committees (16 percent) are headed by women.

smi supervisory board 2019 image 2.jpg

High levels of international representation: 

More than half (57 percent) of SMI supervisory board members do not hold a Swiss passport. Twenty-eight percent are European, 29 percent are from outside of Europe. This makes Swiss supervisory board members far more international than those in neighboring countries. For example, the percentage of foreigners among German DAX 30 board members is 30 percent, approximately half that of Swiss boards.  


Overboarding and cross-linkage in Switzerland’s supervisory space:

On average, an SMI-listed company supervisory board member holds 4.6 mandates and is in office for 5.7 years. However, the count includes all mandates, not only those of the SMI. Overall, this is considered a reasonable average commitment level – well in line with German guidelines, for example – and does not pose a concern. 

Of the 206 supervisory board seats associated with SMI companies, the vast majority – 176 – are held by unique individuals, with just 15 directors holding two seats each. 

Looking at board composition more broadly, membership may seem highly concentrated, as 80 percent of all SMI companies are connected through supervisory board and executive board members holding seats on each others’ boards. However, there are significant differences between organizations. Nestlé is linked to five other SMI companies, Roche to four, and Adecco, Givaudan, LafargeHolcim and Lonza all are linked to three other companies. Five SMI companies are linked with two other companies, five others are linked with just one other company and four – Richemont, Swatch, Swisscom, UBS – are not linked at all.  

Large differences in pay among SMI companies:

As part of our study of SMI supervisory boards, we also investigated director compensation for 2018. Taking all SMI companies into account, the average compensation for a supervisory board member (not including board chairs) is 349,000 Swiss francs, or approximately $351,000. However, there are large differences among companies. At the extremes, a UBS supervisory board member receives four times as much as a Swatch supervisory board member. 

The discrepancy becomes even larger when comparing chairperson compensation. Average chair compensation is 2.5 million Swiss francs ($2.5 million), but the best-paid supervisory board chairman (UBS) receives 23 times more than least-paid (SGS). 

The gap between the CEOs is substantial as well, with the highest-paid CEO (UBS) receiving 7.7 times as much as the least-paid (Swisscom). On average, an SMI CEO receives 7.2 million Swiss francs ($7.2 million). Non-CEO executive committee members get roughly half of that amount, or 3.5 million Swiss francs ($3.5 million). 

The wide variations in board and executive pay is likely due to a number of factors, including the relative size and regulatory obligations of each company, variations in ownership structures, and the fact that some board mandates are part-time while others are full-time.  

SMI in summary:

SMI supervisory boards are making good progress toward achieving robust female representation. To build on this momentum, the next step is for those boards to consciously work toward a balance of power between male and female members in terms of board and committee leadership roles. SMI companies should also continue to groom and promote qualified female executives to top executive management positions, in order to ensure the pipeline of female board candidates remains strong. 

Overall, considering all governance criteria including tenure, breadth of experience and director workload, SMI supervisory boards perform well. 

Overboarding and cross-linkage among boards is a topic to watch, but current levels in SMI companies are not particularly high. Meanwhile, levels of international representation on Swiss supervisory boards are likely to remain high, in keeping with the exceptionally international group of executives employed by Swiss companies.


1 Based on results from the 18 general assemblies that occurred as of June 2019.