Board agendas are becoming vaster and topics are getting more complex. Although not required by law, mainly large and listed companies have set up committees with relevant expertise to support the board of directors (BoD) and help make decisions more efficiently.

The committees support the BoD in fulfilling its legal duties (according to Article 716a Swiss Code of Obligations) by assessing specific topics such as audit, compensation or sustainability in depth. The committees report to the BoD on their activities and findings. Overall responsibility for the duties delegated to the committees remains with the board.

Whereas a compensation committee is required by law for listed companies, audit committees, nomination committees, risk committees and also ESG committees are widespread. Competencies and responsibilities of the committees have to be stipulated in corresponding organizational regulations. Best practice is found in the Swiss Code of Best Practice on Corporate Governance, issued by economiesuisse.

For more information on the different committees access: 

Audit committee (AC)

The focus of an audit committee's work is the financial reporting, the internal control system, the internal and the external audit. It increasingly deals also with the non-financial reporting-process. For that, audit committee members should be independent and be experienced in these fields or even be financial experts.  

Only in the financial service industry is an audit committee required by law in Switzerland. However, the Swiss Code of Best Practice for Corporate Governance recommends setting up an audit committee. Many larger companies have already done so in recognition of the benefits of dedicated board-level resources for this important topic. 

What belongs on the 2023 audit committee agenda?

We expect a focus on eight key topics:

  • Stay focused on financial reporting and related internal control risks –job number one
  • Clarify the role of the audit committee in overseeing the company’s ESG risks
  • Maintain a sharp focus on leadership and talent in the finance organization
  • Reinforce audit quality and set expectations for communications with the external auditor
  • Make sure internal audit is focused on the company’s key risks – and is a valuable resource for the audit committee
  • Help sharpen the company’s focus on ethics, compliance, and culture
  • Stay apprised of global tax developments, and understand that tax has become an important element of ESG
  • Take a fresh look at the audit committee’s composition and skill sets

On the 2023 audit committe agenda

KPMG Board Leadership Center

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The role of the audit committee is becoming increasingly demanding in a rapidly changing environment. Good corporate governance, which includes an external audit of the financial statements, is vital in safeguarding one of the most important corporate assets: Trust


Reto Eberle
Partner, Member of the Board Leadership Center, KPMG Switzerland

Your questions – our solutions

Audit committees have to cover a wide range of issues. Time is limited, so asking the right questions is critical. Our audit committee questions series (prepared by KPMG’s Global Audit Committee Institute) is a great way to spark a conversation and consider your position.

Our experts are happy to support you personally in deepening these topics.

The AC should form its own opinion of the quality of the internal and external audit, the internal control system and the annual financial statements (see Swiss Code of Best Practice for Corporate Governance). The AC reports to the Board on its activities and findings. It recommends the Board  the financial statements to submit to the AGM for approval.

The regular reporting obligations incumbent upon listed companies include the duty  to publish annual financial statements as well as interim financial information. The preparation of the financial statements of a (listed) group is demanding process with many technical challenges. A dedicated committee with experienced members supports the Board in fulfilling its supervisory duties.

Oversight risk: Companies have become much more risk-conscious and their management and oversight more risk-driven. Not surprisingly, the audit committee's time commitment in this respect has increased substantially over the last few years. The review of the risk management processes deserves a dedicated place on its agenda.

Assessing the system of internal control: Audit committees play an important role in overseeing an organization's internal control processes. Effective audit committees perform their oversight by demanding relevant, timely and accurate information from management, the internal auditor and the external auditor, and by asking direct and challenging questions.

Reviewing and assessing financial statements: The audit committee has an important oversight role in providing the board with assurance as to the propriety of the financial reporting process. Reviewing and assessing the financial statements remains a critical last step in the committee's financial reporting oversight activities.

Accounting policies, judgments and estimates: Financial transaction and accounting issues have reached an unprecedented level of complexity. Subjective accounting standards and challenging economic and regulatory environments have put a premium on "getting the numbers right".

Fraud and whistle-blowing: The increasing complexity of global organizations – technologies, financial transactions and processes, global supply chains and third party relationships – continue to expand the opportunities for fraud in a variety of areas. Audit committees have to address the various fraud risks head-on ensuring that appropriate safeguards are in place.

Narrative reporting and non-GAAP measures: The integrity of the financial statements and the systems generating the information reported in the financial statements receives a lot of attention from management, internal audit and external audit. The same is not always true for non-GAAP measures and various narrative reporting disclosures provided to investors and other stakeholders.

Auditor selection: The audit committee should be the owner of the auditor selection process and at the end submit a recommendation to the Board for the appointment of a statutory auditor. The selection process must be structured and take into account audit quality as one important criteria. Whereas in the EU firm rotation is mandatory, in Switzerland (as well as in the US for example) it isnt.

Audit committee induction and onboarding: For any new board member – particularly when joining the audit committee – a learning curve comes with the territory. Just how steep that learning curve is and how quickly a new board member is able to contribute meaningfully to committee meetings, depends directly on the quality of the induction and onboarding process.

Chairing an audit committee: Audit committee effectiveness hinges on the chair's effectiveness. A successful audit committee chair should understand the importance of relationships with management, the auditors and other stakeholders.

Effective conversations: Getting the "right conversation" around the audit committee table is an essential component of audit committee effectiveness.

The right information: For audit committees to be truly effective, it is imperative to have both timely access to, and an understanding of, all the relevant information they need to carry out their responsibilities.

Audit committee self-assessment: The audit committee should regularly assess its own performance – and the adequacy of its terms of reference, work plans, forums of discussion and communication – with a view to highlighting skills and/or knowledge gaps and identifying areas in which the committee and its processes might be more effective.

The regular reporting obligations incumbent upon exchange-listed companies include the obligation to publish annual and interim financial statements. The core content of such statements includes comprehensive information on a company’s financial position, net assets and results of operations, along with in-depth statements about corporate governing processes regarding the preparation of financial statements and its related controls.

Robust processes will ensure high quality financial (as well as non-financial) information which is key to good corporate governance.

As we learnt to live with coronavirus, we can reflect on our experiences and draw some conclusions: What were the biggest challenges facing audit committees? Which accounting-related issues were most urgent? And what impact did these have on audits?  Which insights continue to hold true even after the coronavirus crisis subsided?

We discussed these issues with the members of several audit committees.

> Learn more about audit committees during the coronavirus crisis

With many companies having successfully concluded digital AGMs in the COVID-19 era, the revised Swiss stock corporation law now allows new AGM formats. Against this background, the future of the AGM is up for discussion.

While 2023 will, in the absence of COVID-19, see almost all companies return to the old in-person format, it remains unclear what format will emerge in the future. Will we go back to the old format for good, or will we go fully digital?

Find more publications & thought leadership articles

How to improve the effectiveness of internal and external audit?

The audit committee works closely with external and internal audit teams to safeguard quality, ensure compliance and gain valuable business insights. 

External audit

Effectiveness of the external auditor: The evaluation of external audit effectiveness is subject to increased regulator and investor focus. Not only is it core to the audit committee role but it can have an impact on any recommendations around audit tendering and/or rotation.


External audit scope: In the current environment, audit committees, regulators and other stakeholders are sharpening their focus on audit quality. A thorough review of the audit plan is an essential starting point to ensure audit quality is at the level it should be.




Private sessions with the external auditor: Meeting the external auditor in a private session where management is not present allows the auditor to provide candid, often confidential, comments to the audit committee.

Internal audit

Effectiveness of the internal audit function: An effective internal audit function can have a positive impact on the control environment of an organization and the effective design and operation of internal control. The audit committee should regularly evaluate the effectiveness of the internal audit function to ensure that the benefits to the organization are optimized.

Internal audit scope: The role that internal audit can play within an organization can be significant and of high value to the audit committee. The scope does not need to be limited to providing the audit committee with assurance over the controls implemented by management and can head toward a "consultancy" role, providing strategic support to the audit committee and company. Establishing the "right" scope for the internal audit function is not a "one size fits all" exercise.

Private sessions with the head of internal audit: Meeting the head of internal audit in a private session allows the audit committee to ask questions beyond the scope of the internal audit plan. The head of internal audit can often deliver valuable views and opinions based on the work of the internal audit team.

Nomination committee

The nomination committee is responsible for ensuring that the Board and top management have and will have the right combination of skills, backgrounds, experiences and top management have and will continue to have the right combination to navigate the company through an increasingly volatile and fast-paced global environment.

Today’s new reality presents a unique opportunity to reshape the board composition while working toward providing truly equal opportunities to reach a boardroom that is fit for the future. We explore what’s on the agenda for nomination committees in 2023:

  • Skillsets to expand and enhance ESG oversight
  • Quicken the pace on visible and invisible diversity
  • Move the dial on diversity
  • Board skills required to support growth
  • Succession planning
  • Planning for increasingly active investors

On the 2023 nomination agenda

KPMG Board Leadership Center

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CEO succession: the board perspective

By Dr. Andreas Zehnder, Partner Egon Zehnder International

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Compensation committee

The compensation committee is responsible for policies on pay, compensation reports and related discussions with shareholders. Executive compensation is sure to be on the agenda of the shareholders' meeting – and has even been known to hit the headlines. This is especially true given the current economic outlook.

Compensation committees will need to balance economic uncertainty with the need to retain the key talent required to navigate the business through these challenging times. 

We have highlighted areas to keep in mind as compensation committees consider and carry out their 2023 agendas:

  • Cost of living crisis
  • "Windfall" gains on long term incentives plans
  • Continued focus on the ESG agenda
  • The Swiss Angle – Findings from the SWIPRA Governance Survey

On the 2023 compensation committee agenda

KPMG Board Leadership Center

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Compensation in times of coronavirus

Dr. Stephan Hostettler, Managing Partner, HCM International Ltd.

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ESG committee

ESG committees are becoming an increasingly common presence on boards of listed companies. Whether they’re referred to as the corporate responsibility committee, responsible business committee, sustainability committee or environments and communities committee, some listed companies now have some form of ESG committee.

How companies address climate change, diversity issues, and other ESG risks is now viewed – by investors, research and ratings firms, activists, employees, customers, and regulators – as fundamental to business and critical to long-term sustainability and value creation.  

In our ESG agenda 2023 we put the focus on:

  • Clarity of purpose
  • An ESG competent board
  • Engage proactively with shareholders and other stakeholders
  • Embed ESG, including climate risk and diversity issues, into risk and strategy discussions
  • Driving the transition towards a more purposeful ESG oriented organisation through culture
  • Systems, controls and data
  • Reporting to investors and other stakeholders
  • The Swiss Angle – Findings from the SWIPRA Governance Survey

On the 2023 ESG committee agenda

KPMG Board Leadership Center

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Your key contacts

Hélène Béguin

Hélène Béguin

Chairwoman of the Board of Directors, Audit Partner

KPMG Switzerland
Reto Eberle

Prof. Dr. Reto Eberle

Partner, Member of the Department of Professional Practice

KPMG Switzerland
Rolf Hauenstein

Rolf Hauenstein

Partner, Head of Markets Audit, Head of Board Leadership Center

KPMG Switzerland
Board Leadership Center

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