Responsibility Without Control

When responsibility and decision-making authority diverge

A company has a board of directors, a CFO, experienced executives and external advisers. There are organisational charts, guidelines and regular management meetings. On paper, everything a professionally managed group of companies needs is in place.

Nevertheless, the crucial question remains: can these individuals actually fulfil their roles?

In my work as a board member and governance adviser, I repeatedly encounter the same pattern: companies establish professional structures but fail to delegate the corresponding decision-making powers. Executives bear the responsibility, whilst the decisions remain with the founder or owner. I call this Responsibility Without Control.

This pattern is particularly common in unregulated, owner-managed companies. Whilst all companies are subject to statutory organisational and supervisory obligations, institutions supervised by FINMA are also subject to additional regulatory requirements regarding organisation and safeguards, compliance with which is continuously monitored. Outside this framework, this additional control is lacking – even though the risks are no less significant.

A familiar pattern

Many companies go through the same development. During the start-up phase, short decision-making processes are the founder’s greatest advantage. As the company grows, structures, markets and financing become more complex, and experienced managers for finance and operational areas are brought on board.

However, decision-making habits rarely change at the same pace. Key issues continue to land on the desks of just a few people, and management can only act as quickly as decisions are made there. This is hardly ever a question of goodwill, but usually a natural consequence of success: what was right in the start-up phase becomes a bottleneck as the company grows.

Responsibility has been delegated, but control has not.

Activity is not progress

Meetings, project presentations, negotiations, external consultants: an organisation can be very busy without creating value. Anyone wishing to assess a management team’s performance should therefore not only ask whether tasks were completed, but also why they were not. Was there a lack of information, resources or clear lines of responsibility? Only then does it become clear where the bottleneck actually lies.

Governance on paper

The same applies to guidelines. Many companies have investment policies, due diligence procedures and rules on areas of responsibility. However, their value only becomes apparent when they are applied to crucial transactions – particularly during phases of rapid growth, when speed is often prioritised over thoroughness.

Good governance does not prevent business risk. It ensures that such risks are taken on a conscious basis and on a sound footing.

What this means for the board of directors

The duties of the board of directors apply regardless of how a company is actually managed. It does not have to make every operational decision itself, but must ensure that the organisational structure is appropriate and that oversight is effective.

This also includes the question of what happens to identified risks: who decides on proposed measures, who implements them, and who consciously accepts a risk? If this clarity is lacking, a gap arises between risk identification and risk management.

Five starting points

1. Understand the actual decision-making processes. The organisation chart shows who should make decisions – not who actually does. Where do projects get stuck?

2. Aligning responsibility and authority. Every management role requires a clear area of responsibility and the appropriate powers, set out in a binding framework of authority.

3. Systematising investment decisions. Consistent criteria, due diligence appropriate to the project, defined approval processes and transparent documentation.

4. Make implementation transparent. Track not only tasks and deadlines, but also pending decisions and missing resources. This reveals whether delays are due to performance or structural issues.

5. Regularly review effectiveness. A policy that nobody applies is not governance.

Delegation does not mean a loss of control

Many owners fear that delegating will mean relinquishing control. The opposite is true: a clear division of responsibilities and regular reporting provide a better overview than personal involvement in every single decision ever could. Overall management and non-delegable tasks remain with the board of directors, through which the owner also exercises their influence. Management is given the leeway to implement decisions.

At Wegmann Advisory, we support companies and boards of directors precisely at this interface: with governance assessments, practical competence and investment processes, and management monitoring that reveals where an organisation actually stands. In doing so, we apply tried-and-tested standards from the regulated financial sector, in an appropriate form, to companies that are not subject to supervision.

After all, the quality of corporate governance is not measured by the number of guidelines, but by whether they actually shape a company’s actions.

Joachim G. Wegmann Wegmann Advisory Corporate Governance | Risk Management | Compliance

From Opportunity to Execution: Why Good Deals Need Good Governance

Every successful business needs opportunities.

New markets need to be identified, projects discovered, relationships established and doors opened. Opportunities may emerge from many sources — management, shareholders, advisers, existing business relationships or individuals whose particular strength lies in originating new business. I would describe the latter as deal generators.

Good deal generators are extremely valuable. They have networks, entrepreneurial instinct and the ability to identify opportunities that others may never see. Without this entrepreneurial element, organisations can easily turn inward: they administer existing business but stop creating new opportunities.

Yet identifying an opportunity and turning it into a successful investment are two fundamentally different disciplines.

The Opportunity Comes First

The starting point should always be the opportunity itself — not the person who introduced it.

Once identified, the organisation needs to understand what the opportunity actually represents: the business proposition, the parties involved, the capital required, the expected return, the principal risks, and what needs to happen for it to become an executable transaction.

At this stage, the deal generator's role begins to change. Their contribution starts to shift — from identifying the opportunity and bringing the right parties together to supporting those responsible for assessment and execution.

Once capital is committed and contracts are signed, legal obligations and operational risks follow. The opportunity is moving from origination into corporate responsibility, and that requires a different framework.

The Point Where Roles Need to Change

Not everyone involved in an investment carries the same risk or responsibility.

The investor bears economic exposure. Management is responsible for execution. Boards and executives carry formal — and sometimes personal — responsibilities. The deal originator typically has a different economic interest, often tied to identifying, introducing or facilitating the opportunity.

None of these roles is inherently more important than another, but they are different. Good governance recognises those differences and allocates information, authority and responsibility accordingly.

Once an opportunity enters assessment and execution, those carrying responsibility for the company and its capital need to take the lead.

The deal generator does not need to disappear. Their knowledge, relationships and entrepreneurial instinct may remain highly valuable. But the role should shift from control to support.

From Relationship Ownership to Corporate Responsibility

Problems arise when the person who originated a deal continues to control the process well into execution — remaining the principal source of information, holding exclusive relationships with counterparties and effectively becoming the sole channel through which relevant information flows.

What started as a valuable network can quietly become an information dependency, one that appears increasingly indispensable as the deal becomes more complex.

The principle should be the opposite:

The more complex an investment becomes, the more important it is to separate relationship ownership from decision-making authority.

Those carrying accountability need direct access to relevant information and, where appropriate, to counterparties themselves. Due diligence should be independently verifiable, decisions should be made by those authorised to make them, and execution should be owned by those accountable for the outcome.

This is not about diminishing the deal generator. It is about making the opportunity an asset of the organisation rather than a dependency on the individual who found it.

Governance as the Bridge

An effective corporate governance function is not there to prevent entrepreneurial activity or slow every opportunity into oblivion.

Its purpose is to build a disciplined bridge between opportunity, capital and execution.

Depending on the organisation, this responsibility may sit with the board, an independent director or an interim executive director. In established organisations, many of the required structures will already exist. In younger, fast-growing, cross-border or transforming businesses, however, governance often needs to be more hands-on in establishing those structures.

An exciting investment story therefore needs to be converted into a series of much less exciting questions:

• Who are the counterparties, and what has been independently verified?

• Who owns the relevant assets, and what contractual rights does the company obtain?

• What are the principal risks, and which approvals are required?

• How much capital should initially be committed, and what milestones should be achieved before further capital is released?

• Who is responsible for execution, and how will performance, risk and the use of capital be reported?

These questions do not destroy entrepreneurial opportunities — they make them manageable.

Governance does not kill the story. It translates the story into facts, responsibilities, controls and executable decisions.

Protecting Capital Without Preventing Investment

Good governance is not about eliminating risk. If it were, there would be very little business left to do.

The objective is to identify, understand and manage risk sufficiently well to allow informed decisions to be taken. In other words, governance should enable calculated risk-taking. Optimism, conviction and a willingness to take risk are essential elements of entrepreneurship and investment, not weaknesses.

This starts with proportionate due diligence — scaled to the size, complexity and risk profile of the transaction without creating unnecessary bureaucracy.

Speed and proper due diligence are not opposites. Where a decision is time-sensitive, resources can be focused and the review conducted efficiently. But urgency should never become a substitute for verification. A credible counterparty should understand that a professional investor — particularly one responsible for institutional or third-party capital — must satisfy appropriate standards before committing funds.

If material information is unavailable, that does not necessarily mean rejecting the transaction. But the information gap must be transparent.

Governance establishes what is known, what has been independently verified, what remains uncertain and what risks follow from that uncertainty. The investor can then decide whether the opportunity justifies accepting the remaining risk.

This is fundamentally different from either blindly approving or automatically rejecting a deal.

Capital depends on confidence. Where investors know that information has been appropriately scrutinised, material risks have been identified and responsibilities are clear, capital can flow. Where that confidence is missing, even an attractive opportunity may remain just that — an opportunity.

Properly designed, governance is therefore not merely protective. It is an enabling function that allows credible opportunities to attract capital and investors to take calculated risks on an informed basis.

The objective is not a risk-free investment. It is an informed investment decision.

Governance Matters Most When Everyone Wants the Deal

Governance is rarely tested when everyone agrees that an opportunity is unattractive.

The real test comes when the deal generator is enthusiastic, management sees potential and the investor wants in.

That is precisely when independent judgement matters most — not to stop the deal, but to ensure that enthusiasm does not replace verification.

Due diligence, clear authorities, transparent reporting and staged funding where appropriate are not expressions of distrust. They are mechanisms that allow entrepreneurial conviction to operate within a professional framework.

Governance does not sit opposite entrepreneurship — it makes disciplined entrepreneurship possible.

Let Deal Generators Generate Deals

This approach ultimately benefits everyone.

Someone who is exceptionally good at finding opportunities should spend their time doing exactly that: building networks, opening doors, identifying projects and creating new business.

Once an opportunity moves into assessment and execution, professional management and those carrying governance responsibility should take the lead — with the originator remaining involved as an adviser, relationship holder or source of specialist knowledge wherever useful.

This allows everyone to focus on what they do best.

The opportunity creates the potential.
The deal generator creates access.
The investor provides capital.
Management executes.
Governance keeps opportunity, capital and execution aligned.

Depending on the organisation, that governance responsibility may be exercised by the board, an independent director or an interim executive director working alongside management and investors.

What matters is that the function exists, that responsibilities are clearly allocated and that those carrying accountability have direct access to the information required to exercise it.

The strongest investment organisations do not choose between entrepreneurship and governance.

They combine them.

Good governance does not stand in the way of a good deal — it is what allows a good deal to survive execution.

Beyond the Boardroom – Why I Created EloxalPrints Events

Over the past months, I have published several articles about corporate governance, regulated financial institutions and the realities of serving as an independent director.

Many readers may therefore be surprised to learn that, alongside Wegmann-Advisory Alternative Investments, I have also built Eloxal Prints – a project that combines art, innovative printing technology and carefully curated events.

At first glance, these two worlds seem unrelated. In reality, they are closely connected.

Throughout my career, I have learned that business is ultimately built on trust. Trust is rarely created during formal board meetings or through PowerPoint presentations. It develops through genuine conversations, shared experiences and the opportunity to get to know people beyond their professional titles.

That is precisely the idea behind Eloxal Prints Events.

Our first event, held in Zurich on 25 June, was never intended to be just another art exhibition. It was designed as an environment where entrepreneurs, investors, board members and professionals from different backgrounds could meet in a relaxed atmosphere, discover a unique printing technology, speak directly with the artist and exchange ideas without the formality of a traditional business event.

To bring this vision to life, we chose a bold yet elegant setting. Alongside the artwork, our EloxalPrints Brand Ambassador, Ning Ning, represented the visual identity of the brand, complementing the exhibition with a distinctive and contemporary aesthetic. Combined with fine champagne, handcrafted premium Swiss organic chocolate and carefully selected delicacies from Naturkostbar, the evening was designed as a complete sensory experience. As Chairman of Naturkostbar AG, I was particularly pleased to introduce our guests to one of Switzerland’s outstanding producers of premium organic products.

For me, the evening confirmed something I have believed for many years:

Meaningful relationships cannot be forced. They develop naturally when people enjoy spending time together.

The event also demonstrated that innovation is not limited to financial markets. Eloxal printing is a highly specialised technology that offers exceptional durability, colour stability and a distinctive visual appearance unlike conventional fine art prints. Presenting this technology in combination with original artworks, the artist’s personal presence and a carefully curated setting created an experience rather than a simple product presentation.

The positive feedback we received was encouraging. More importantly, it confirmed that this concept has the potential to evolve into a recurring platform bringing together art, entrepreneurship and meaningful conversations.

For Wegmann-Advisory, these events represent more than a cultural initiative. They reflect the same philosophy that guides my work: creating long-term relationships built on trust, quality and authenticity.

Following the encouraging response to our inaugural event in Zurich, we are already preparing our next Eloxal Prints Evening for September 2026. As before, it will bring together art, innovation and meaningful conversations in an intimate setting. Should this concept resonate with you, I would be delighted to hear from you.

Acquiring vs. Building a FINMA-Regulated Asset Manager – Strategic Considerations

Introduction
International investors and family offices looking to establish a presence in Switzerland are often confronted with a fundamental strategic question: should they acquire an existing FINMA-regulated asset manager or build a new structure from the ground up?

At first glance, the acquisition of an already licensed entity may appear to be the faster route. In practice, however, the decision involves a range of regulatory, operational and governance-related considerations that are frequently underestimated. Based on practical experience within the Swiss financial sector, it becomes evident that the “cleaner” path often provides the more sustainable long-term outcome.

The Appeal of Acquiring an Existing Platform
The acquisition of a licensed asset manager is often perceived as a shortcut. Potential advantages may include:

- Immediate Market Presence: Brand recognition and an established local footprint.

- Operational Setup: Existing IT infrastructure, service provider contracts and office space.

- Client Base: Established relationships and Assets under Management (AuM) providing immediate cash flow.

Key Challenges of Acquiring an Existing Structure
In practice, several structural challenges may ultimately offset the perceived speed advantage of an acquisition.

1. Regulatory “Change of Control” Complexity
A significant change in ownership, especially when combined with a replacement of executive management and the Board of Directors, triggers a detailed FINMA review process.

In many cases, the simultaneous replacement of shareholders, executive management and governance bodies can significantly increase the complexity and duration of the approval process.

During this transition period, buyers may find themselves in a “strategic grey zone”: economically exposed to the investment while remaining unable to fully steer the company’s operational and strategic direction, as the organization continues to operate within its legacy structures until formal approval is granted.

2. Legacy Liabilities and Hidden Costs
Due diligence processes rarely uncover the full extent of historical risks. Post-acquisition, investors may encounter:

- Compliance Gaps: Historical deficiencies in client documentation or AML-related processes.

- Strategic Exit Costs: Operational, financial and legal burdens associated with exiting client segments or activities that no longer fit the new owner’s strategic direction.

- Hidden Liabilities: Tax-related risks or unresolved legacy disputes that may significantly increase the effective acquisition cost.

3. Key Person Dependencies
Swiss wealth management remains a highly relationship-driven industry. Client loyalty is often linked more closely to individual advisers than to the legal entity itself.

If key personnel depart following a transaction, investors may find themselves owning an expensive licensed structure with rapidly diminishing assets and limited strategic value.

The Greenfield Approach: Strategic Flexibility and Clean Governance
Building a new structure may initially appear slower, but it can offer significant long-term strategic advantages.

Clean Governance and Modern Infrastructure
A Greenfield structure allows investors to establish governance, compliance and operational frameworks according to current regulatory expectations from day one.

This approach avoids many of the integration challenges associated with legacy systems and allows for the implementation of a modern and scalable operational infrastructure without historical constraints.

The “Smart Start”: Gradual Market Entry During the Licensing Process
A common misconception is that no commercial activity can take place until the full FINMA licence has been granted.

In practice, however, there are ways to gradually establish market presence during the build-up phase. By leveraging the Swiss Register of Client Advisers, qualified professionals may be registered within a relatively short timeframe, subject to the applicable regulatory framework.

This staged approach may allow firms to gradually establish advisory activities, onboard clients and build operational infrastructure while the full FINMA licensing process for a discretionary asset manager progresses in parallel.

Conclusion
There is no universally correct answer to the question of acquisition versus Greenfield development.

The appropriate strategy depends on several factors, including:

- Risk Appetite: Do investors wish to manage historical structures and potential legacy risks, or establish a new organisation from the ground up?

- Operational Timing: Is a staged market entry approach sufficient during the licensing phase?

- Governance Standards: How important is it to implement governance and compliance structures according to the organisation’s own standards from day one?

While acquisitions may provide faster initial access to the Swiss market, they may also involve considerable complexity relating to regulatory approvals, legacy structures and organisational integration.

In many situations, a carefully planned Greenfield setup may ultimately provide a cleaner, more flexible and more sustainable foundation for long-term success in the Swiss wealth management industry from both a governance and operational perspective.

The Reality of Being a Director in Cross-Border Structures

In recent years, I have observed a recurring pattern in internationally structured businesses: a Swiss entity is established, a local director is appointed, and operations are driven across multiple jurisdictions.

On paper, the structure appears sound. In practice, it often reveals a fundamental misunderstanding. A Swiss company is not an administrative wrapper. It is a legally and operationally accountable entity, governed by one of the most robust regulatory frameworks in the world.

The Illusion
From an international perspective, the logic often seems straightforward:

• Establish a Swiss entity

• Appoint a local director

• Conduct business across borders

• Rely on the reputation of the jurisdiction

This approach assumes that governance can be geographically separated from operations.
It cannot. Legal responsibility remains anchored in the entity itself — and therefore with its governing bodies.

The Reality
The role of a director in Switzerland is not symbolic.
It carries:

• personal accountability

• fiduciary duties

• responsibility for oversight and decision-making

• an obligation to ensure that the company is properly governed and structured

Even when business activities take place abroad, the Swiss entity remains responsible for how those activities are conducted, structured, and controlled. A director cannot delegate responsibility simply because operations occur elsewhere.

Governance Is Not a Formality — It Is Personal Liability
What is often underestimated in international setups is the practical reality of Swiss governance. Swiss law does not treat a company as an abstract vehicle. It assigns clear responsibility to its governing bodies — and ultimately to the individuals behind them.
This becomes particularly relevant in areas such as:

• withholding tax (35%) in cases of non-arm’s length transactions or hidden profit distributions

• social security contributions in cases of misclassified compensation structures

• VAT in cross-border service arrangements and incorrect treatment of supplies

• capital structures and financing arrangements that do not withstand regulatory scrutiny

These are not theoretical considerations. Failures in these areas can result in direct personal liability of the responsible directors.

International Structures Increase Complexity
Once multiple jurisdictions are involved, the situation becomes significantly more complex. A typical structure may involve:

• a Swiss entity

• US-based investors or capital providers

• UK-based deal origination

• operational exposure in emerging markets

This introduces additional layers such as:

• OECD standards (including transfer pricing and substance requirements)

• international VAT regimes

• local regulatory and tax obligations

These frameworks are not harmonised. They are often inconsistent — and the responsibility for navigating them does not disappear. It remains with the director.

The Price of Swiss Stability
The reputation of Switzerland is not a branding exercise.
It is the result of consistent enforcement of rules:

• legal certainty

• predictability

• protection of market participants

This stability exists because standards are high — and applied. For a director, this leads to a simple conclusion: Compliance is not optional. It is the foundation of risk management.

The Tension
This creates a structural tension that is often underestimated:

• Shareholders seek speed and opportunity

• Markets demand flexibility

• International deal flows evolve rapidly

At the same time:

• governance requires discipline

• regulatory expectations require clarity

• decision-making requires substance

These forces do not always align. In many cases, the director finds himself positioned between strategic ambition and legal responsibility.

Where It Often Breaks
In practice, challenges typically arise when:

• governance is treated as a formality rather than a function

• directors are expected to validate decisions rather than assess them

• risk is implicitly transferred to the local structure without corresponding control

• the substance of the organisation does not match its external positioning

At that point, the structure may still appear intact — but its foundation is already compromised.

The Role of the Director
A director’s role is not to facilitate decisions at any cost.
It is to ensure that decisions are:

• understood

• structured

• aligned with the legal and regulatory framework

• sustainable over time

This requires independence of judgment. And occasionally, it requires restraint.

Conclusion
Cross-border structures can be highly effective — if they are built on clarity, alignment, and genuine understanding of responsibilities. They become fragile when governance is assumed rather than implemented. A Swiss company does not derive its strength from perception. It derives it from structure, substance, and accountability. And ultimately, from the willingness of its directors to uphold them.

Joachim Wegmann is a Swiss-based director and advisor focusing on governance, structure and cross-border investment platforms.

Fit & Proper: More Than a Regulatory Checkbox

In regulated financial institutions, the concept of “Fit & Proper” is often treated as a formal requirement. Candidates submit documentation, regulators perform background checks, and once approved, the matter is considered closed.

In reality, however, Fit & Proper is not a one-time administrative hurdle. It is a continuous obligation — and more importantly, a mindset.

Over the years, I have come to understand that the true meaning of Fit & Proper only becomes visible when governance structures are under pressure. It is in difficult situations — not in stable ones — that the real quality of leadership and oversight is revealed.

Beyond formal criteria
Regulators typically assess Fit & Proper based on:

• professional qualifications,

• relevant experience,

• reputation,

• financial soundness,

• and the absence of criminal or regulatory sanctions.

These criteria are necessary. But they are not sufficient.
A person may meet all formal requirements and still fail to act in a way that reflects the spirit of the role. Fit & Proper is not only about past records; it is about current behaviour and decision-making. It is ultimately a question of character, judgement, and accountability.

Fit & Proper as a mindset
At its core, Fit & Proper represents a simple but demanding principle: A person in a regulated function must act with integrity, transparency, and responsibility — even when it is inconvenient. This includes:

• respecting governance structures,

• accepting oversight,

• documenting decisions properly,

• and avoiding concentrations of power that bypass established controls.

Fit & Proper is therefore not a title. It is a daily discipline.

Typical red flags in practice
In real-world situations, certain behavioural patterns often indicate deeper governance problems.
Examples include:

a) Inconsistent or unclear residency and professional disclosures
When individuals appear with different domiciles or professional bases across various corporate or regulatory contexts, this raises questions about transparency and credibility.

b) Formal compliance without internal alignment
Some individuals focus on passing the formal Fit & Proper test but do not adopt the mindset behind it. They see regulation as an obstacle rather than as a framework for responsible leadership.

c) Concentration of control in one person
Healthy governance requires checks and balances. When one individual attempts to control decisions, bank access, or operational matters alone, bypassing proper approvals, this is a serious warning sign.

d) Bypassing established processes
Payments, strategic decisions, or contractual obligations made without board approval or proper documentation undermine the integrity of the institution.

Each of these elements may appear minor in isolation. But together, they often indicate a structural problem.

Collective responsibility: Fit & Proper is not an individual label
Another often overlooked aspect is that Fit & Proper is not only an individual assessment. In regulated institutions, it is a collective responsibility.
Senior executives, board members, and other approved persons are expected not only to meet formal criteria themselves, but also to uphold the governance framework as a group.

In practice, governance failures rarely occur because of one dominant individual alone. They often arise because others in the structure:

• remain passive,

• avoid confrontation,

• or prioritise personal or financial interests over institutional integrity.

When formally approved individuals tolerate behaviour that contradicts basic governance principles — for example, the concentration of control in a single person or the bypassing of established decision processes — the problem is no longer individual.
It becomes systemic.
Fit & Proper therefore requires not only personal integrity, but also the courage to uphold principles, even when this involves professional risk or personal discomfort.
A governance structure where approved individuals remain silent out of fear of losing their position is, in substance, no longer a Fit & Proper environment.

A continuous obligation
One of the most important lessons from practical experience is this:
Fit & Proper is not something you achieve once. It is something you must demonstrate continuously.
Regulators may grant approval at a specific point in time. But reputation, conduct, and governance behaviour are assessed every day — by regulators, counterparties, investors, and colleagues.
In this sense, Fit & Proper is less about passing a test and more about maintaining a consistent professional identity.

Conclusion
The concept of Fit & Proper is often perceived as a technical or bureaucratic requirement. In reality, it is one of the most important foundations of trust in the financial industry. It reflects:

• personal integrity,

• institutional discipline,

• and the willingness to act responsibly under pressure.

In the end, Fit & Proper is not defined by a regulator’s decision. It is defined by the choices professionals make — especially when no one is watching.