Director onboarding
“I was new” is not a defence. What to do in the six weeks before your first meeting.
You have accepted. The chair sent a warm note, you have seen the public filings, and there is a sense that the real induction will happen in the first meeting. It will not. Your duties under Art. 717 OR engaged the moment you accepted. Swiss courts do not distinguish between founding directors and arrivals of six weeks' standing when testing whether a director has met the objective care standard of an orderly and conscientious manager. What you do in the window between acceptance and first meeting will, quietly, shape your defensibility for the whole of your tenure.
1. The duties that bear on this
Care and loyalty from acceptance. Art. 717 OR imposes the duties of care and loyalty from the moment of acceptance; they do not phase in. A new director who votes for a resolution at their first meeting without the information a competent director would have demanded has breached the duty.
Conflict disclosure is immediate. Any existing mandate, shareholding, family relationship, prior advisory relationship, pending dispute with the company or its counterparties must be disclosed on appointment. Conflicts discovered later are, in Swiss practice, treated as conflicts concealed.
Prior decisions define your inherited exposure. You are not liable for decisions taken before you joined, but you are liable for your failure to address known problems inherited. A balance-sheet proximity to Art. 725 triggers that predates your appointment becomes your problem the moment you know about it.
2. The process
- Within a week of acceptance, request and read the articles of association, the organisational regulations, the committee charters, the D&O policy and schedule, and the last three years of board and committee minutes.
- Separately, request the last three years of audit reports, management letters, and the current internal-audit plan and outstanding findings register.
- Meet the chair alone; the external auditor alone; the CFO alone; the CEO alone; the general counsel or head of compliance alone. Meeting people alone is not a political statement — it is the only way to calibrate what you are being told.
- Request the register of pending and threatened litigation, the register of regulatory inquiries, and a schedule of contingent liabilities with quantified ranges.
- Read the last two annual reports not for information you already have from public filings, but for what they do and do not emphasise, and for the auditor’s critical-audit-matters commentary.
- Identify which board committee you will serve on, and read the committee’s last twelve months of minutes in detail.
- At your first meeting, ask the questions that tell the incumbent board what you understood from the documents. Not to perform; to calibrate.
3. Questions to ask the chair, the auditor, and the CFO
- Where are we on the Art. 725a and 725b balance-sheet tests under realistic and stressed scenarios?
- What is the largest contingent liability on the register, and what is our worst-case exposure?
- What is the single governance or control weakness the auditor has flagged in the last twelve months that has not been fully remediated?
- Which board decisions in the last three years produced substantive debate, and which passed without serious discussion?
- Are there shareholder relationships — controlling, minority, activist — that materially shape how the board operates?
- What is our D&O tower — limits, retention, priority of coverage, reporting obligations on new facts — and when did we last run a claim through it?
- What is our regulatory footprint, and which regulator is most active?
- How independent in practice is our audit committee from management, and how is that worked?
- Is there a pending or credibly threatened litigation I need to understand on day one?
- Who is the one person on the management team whose competence the auditor and the chair both quietly worry about?
4. The record to leave
Keep, for yourself, a dated file of the documents you read, the meetings you held, and the questions you asked. The file is not for the company; it is for you, and it documents the diligence with which you discharged your duty in the period in which Swiss courts are particularly sceptical of later-in-the-day claims of ignorance. Your first written record as a director is not your first minute entry; it is your acceptance letter and your initial conflict disclosure. Take both seriously.
5. Failure modes
The rubber-stamp first meeting. A new director who arrives, is briefed verbally by the CEO in the twenty minutes before the meeting, and votes with the majority on a material transaction discussed only in conclusory terms is a new director who has, in Swiss doctrine, breached the care duty on their first day. “I was new” does not survive scrutiny.
The inherited-problem drift. A new director identifies a problem — a reserve that looks thin, a contingent exposure that is not in the register, a control weakness the auditor keeps flagging — and waits for the next meeting to raise it. Between now and then, a decision is taken that crystallises the problem. The escalation duty begins the moment the problem is seen, not at the convenient board meeting.
Conflict concealment. A prior advisory relationship, a family interest in a major counterparty, a pending personal dispute with a director on another board — each must be disclosed on appointment. The concealment frequently emerges at the worst moment, often discovered by an opposing party in litigation.
Cognitive register. The new director’s psychology in the first weeks is dominated by three forces. Asch’s conformity pressure (Asch, 1951) — the desire to be perceived as collegial — suppresses early concerns; the director who has noticed something amiss often defers the observation in the hope that “someone else” will raise it, a pattern the pluralistic-ignorance literature anticipates. Chair and CEO briefings anchor the director’s frame of the company; alternative readings require more cognitive effort and rarely surface unless actively sought. Janis’s groupthink research prescribes the counter-measures the process list already implements — separate one-on-one meetings, independent document review, deliberate dissent — but a director aware of the psychological pressures at work will apply those counter-measures with more intention.