Time for a Change? ISS Backs Activist Push to Overhaul Swatch Group's Board

NEW YORK, NY – April 27, 2026 – The battle for the future of The Swatch Group AG has intensified dramatically as activist investor GreenWood Investors LLC secured a powerful endorsement from Institutional Shareholder Services (ISS). The influential proxy advisory firm has recommended that shareholders vote in favor of GreenWood’s board nominee, Steven Wood, and a slate of governance reform proposals at the watchmaking titan’s upcoming Annual Meeting on May 12, 2026.

The recommendation provides significant momentum to GreenWood's campaign, which seeks to inject independent oversight into the board of the family-controlled luxury giant. For years, Swatch has been synonymous with the Hayek family, who founded the modern group and maintain a firm grip on its strategic direction. Now, facing what ISS describes as deteriorating performance and significant governance shortcomings, that control is facing its most serious public challenge yet.

A Dynasty Under Fire

At the heart of the conflict is a fundamental clash between tradition and modern corporate governance. The Swatch Group, home to iconic brands like Omega, Longines, and Tissot, in addition to its namesake Swatch, has long been steered by the Hayek family's vision. Nayla Hayek serves as the Chair of the Board, while her brother, Nick Hayek Jr., is the company’s long-serving CEO. This concentration of power is fortified by a dual-class share structure that gives the family an estimated 43-44% of voting rights, despite holding only about 25% of the capital.

Swatch's board has defended this structure as a cornerstone of its stability and long-term success, shielding the company from short-term market pressures. In its official response to GreenWood's campaign, the company has firmly rejected the activist's proposals. The board recommended against Steven Wood's election, deeming him “not suitable,” and has instead put forward its own candidate, Andreas Rickenbacher, to strengthen the board. Swatch has also highlighted its legal disputes with Wood, stating it will not collaborate with an individual who has initiated legal action against the company after his 2025 board bid was blocked over his U.S. citizenship.

However, what the company sees as stability, critics and now ISS see as stagnation and a critical lack of accountability. The ISS report paints a picture of a board unable or unwilling to challenge the founding family's influence.

The Case for Change: Performance and Governance in Focus

The endorsement from ISS is not merely procedural; it is a damning assessment of Swatch’s recent trajectory. The advisory firm directly linked the company's financial woes to its governance structure. “It is difficult to separate the company’s issues with performance from its governance deficiencies,” the ISS report stated. “The sub-optimal governance setup is exemplified by the significant influence of the founding family and the lack of independence at the board level.”

The numbers underpinning this assessment are stark. ISS highlighted that Swatch’s dominant position in its home market has eroded significantly. “UHR has lost its luster as a leading player in the luxury watch segment,” the report noted, pointing out that “The company went from accounting for more than 40 percent of Switzerland's watch exports a decade ago, to less than 25 percent in the most recent reporting period.”

This loss of market share is mirrored in its financial results. Recent reports show a company struggling to maintain momentum. Net sales for 2025 fell, and operating profit plummeted to a margin of just 2.1%. This performance decline has directly impacted shareholders, with the company's stock price falling from a high of over CHF 600 in 2013 to under CHF 150 by 2025, a stark contrast to the performance of some of its luxury peers. ISS concluded that Swatch’s revenue has hit a decade-low, excluding the pandemic-induced dip, and its operating margin is the “worst among peers.”

ISS argues that adding a truly independent voice is the first step toward a solution. “Overall, given the company’s governance shortcomings and the clear need for a more independent, outside perspective at the board level, support for the dissident nominee is warranted,” the firm concluded. “A vote FOR the dissident director [Steven Wood] represents a constructive step toward improving oversight and rebuilding investor trust.”

The Activist's Playbook and a Powerful Endorsement

Enter Steven Wood, the Founder and CIO of GreenWood Investors. GreenWood, an investment manager founded in 2010, specializes in partnering with companies during what it calls “transformational moments.” Wood is being positioned as the catalyst for such a moment at Swatch, bringing what his firm describes as “critical capital markets, industrial cross-border, and operational excellence skillsets.”

In a statement, Wood expressed his gratitude for the ISS endorsement, framing his campaign as a necessary intervention. “Our proposals and candidate represent necessary first steps to rectifying the governance shortcomings and finally addressing the stagnation that has occurred at the Company in recent years,” he said. He further urged shareholders to follow the ISS advice to take a “constructive step toward improving oversight and rebuilding investor trust.”

To bolster Wood's credentials as a hands-on board member, GreenWood's press release included a strong endorsement from Mr. Raul Galamba, Chairman of CTT Correios de Portugal. Galamba credited Wood for his pivotal role in the postal service's evolution, stating, “Steven has been central to CTT’s industrial transformation from a legacy operator into a modern logistics leader. His hands-on role in our operational turnaround proves he brings deep industrial insight and a collaborative, results-driven mindset to the board.”

Beyond Wood’s nomination (Proposal 5.1.2), GreenWood is pushing for a suite of governance reforms under Proposal 9 (items 9.1-9.6). While the specifics are detailed in proxy materials, the overarching goal is to align Swatch with modern governance standards. The weight of ISS's recommendation on all these proposals cannot be overstated, as many institutional investors automatically follow its guidance. The move also aligns with recommendations from other advisory firms, including Glass Lewis and the Swiss-based Ethos Foundation, which have both previously raised red flags about the board's lack of independence.

A Broader Battleground for European Corporate Governance

The proxy battle at Swatch is more than a dispute over a single board seat; it is a test case for shareholder rights in continental Europe, where many blue-chip companies remain under the tight control of founding families. Activist campaigns in such environments face an uphill battle against entrenched interests and protective ownership structures.

The Hayek family’s formidable voting bloc means Wood’s election is far from guaranteed. However, the unified front presented by major proxy advisors signals a new level of investor dissatisfaction. The campaign forces a public debate on whether a governance model that once ensured stability has now become a liability, hindering the company's ability to adapt to a rapidly changing luxury market.

The industry is grappling with the rise of the second-hand market, fierce competition from smartwatches at lower price points, and shifting consumer preferences that demand more than just heritage. While Swatch has had successes, such as the wildly popular MoonSwatch collaboration, critics argue these are tactical wins that mask deeper strategic drift.

As the May 12 meeting approaches, all eyes will be on Swatch’s institutional shareholders. Their votes will determine whether the Hayek dynasty can fend off this challenge or if the winds of change, amplified by the powerful voice of ISS, will finally begin to reshape one of Switzerland’s most iconic corporations.