Advisory board of a private foundation: powers, beneficiary influence and limits

Under section 14(2) PSG, the foundation declaration may provide further bodies to safeguard the foundation purpose. The statute does not provide a ready-made advisory-board catalogue. The declaration must regulate appointment, term, removal, voting and powers.

An advisory board may advise, receive information, propose candidates or consent to specified transactions. It may also receive powers concerning appointment and removal of board members. The stronger those rights, the more strongly mandatory limits and incompatibilities become relevant.

The declaration may not hollow out the board’s independent responsibility. RS0115030 emphasises the legislative intention to strengthen board independence and limit permissible outside influence. A consent right reviews a decision; continuing instructions on individual management matters can shift the governing role itself.

Not every family council is a legal foundation body. A council outside the declaration can structure communication but has no governing consent, appointment or information rights against the foundation. Name and legal effect must be kept separate.

Beneficiaries may in principle belong to an additional body. For an ordinary advisory board, the PSG does not impose the general absolute appointment prohibition applicable to a supervisory board. Saying that beneficiaries may never form a majority is therefore unreliable without examining the powers.

In RS0107655, however, the Supreme Court held impermissible an advisory board composed solely of beneficiaries where it could remove board members without restriction to important cause or determine board remuneration. The reasons were conflict of interest and avoidance of incompatibility rules.

Section 14(3) and (4) expressly regulate removal resolutions by an additional body. Removal generally requires a three-quarter majority; if the body has fewer than four members, unanimity is required. For removal on grounds other than those in section 27(2)(1) to (3), beneficiaries, relatives and instructed representatives may exercise no more than half the votes.

That voting limit is more precise than a universal headcount. For other powers, the assessment asks whether beneficiary influence, conflicts and the body’s total authority undermine independent board management. Membership and voting rights are separate design layers.

A body does not become a supervisory board through its name. Under RS0123561, comparability turns primarily on the core supervisory-board functions in section 25(1) PSG. Ongoing monitoring, extensive inspection, reporting duties and control of management must be assessed as a whole.

Where its control functions make the advisory board comparable to a supervisory board, the mandatory incompatibilities of section 23(2) may apply by analogy. The Supreme Court specifically rejects dual membership of the foundation board and such a supervisory-board-like control body.

A limited consent requirement does not automatically create a supervisory board. The risk grows where the advisory board continuously monitors management, controls almost every major transaction and also exercises personnel powers. The full powers catalogue is decisive.

If employee numbers or the participation structure already trigger a statutory supervisory board under section 22 PSG, a voluntary advisory board cannot replace it. Advisory board and supervisory bodies explains the thresholds and duties.

A consent right prevents the board from completing a specified transaction without approval. It does not relieve the board of its own review and preparation. Advisory-board consent cannot make a breach of duty lawful.

A power to issue instructions intervenes more deeply. Clauses removing all independent board judgment in day-to-day management endanger the board’s statutory responsibility. Permissible purpose and competence controls must be distinguished from factual outside management.

Advisory-board members bear responsibility for their own governing acts. They must read documents, disclose conflicts and decide within their powers. A family mandate or expectation of a particular beneficiary does not replace the duty to safeguard the foundation purpose.

Where consent is disputed, the resolution record, information available and consequences should be documented. Lasting deadlock can impair functioning and ultimately lead to governing or court measures.

Unrestricted removal: a beneficiary-dominated body can replace the board at any time without important cause. That can conflict with section 14 and Supreme Court case law.

Undefined consent catalogue: phrases such as “important transactions” without categories or thresholds generate permanent competence disputes.

No conflict rule: members vote on their own benefits, remuneration or related-party transactions without recusal and replacement rules.

Supervisory powers without incompatibility review: the body receives monitoring, personnel and remuneration powers while membership is treated like a purely advisory family council.

No succession mechanism: death, resignation or deadlock leaves the body unable to appoint the foundation board.