Swatch Doubles Down On Board

In its latest filing, Swatch did little to soften its stance. The company described Wood’s allegations as “baseless and damaging” and emphasized that it would not collaborate with an individual who had initiated legal action against it. Swatch also reiterated concerns about reputational risk tied to Wood’s position on the board of Leonardo, which it said could conflict with Swatch’s corporate values.

“It is important to the group that its board members are Swiss citizens or have their primary residence in Switzerland,” the company said in a statement, reinforcing a philosophy that has long been a hallmark of the Hayek family’s stewardship.

That traces back to the industry’s modern revival. Swatch, founded in its current form in the early 1980s, emerged from the merger of two struggling Swiss watch conglomerates at a time when the sector was under threat from inexpensive quartz watches produced in Asia.

Under the leadership of the late Nicolas Hayek, the company not only stabilized but reinvented Swiss watchmaking with bold designs and brand storytelling.

Today, Swatch Group controls a vast portfolio spanning entry-level plastic watches to some of the most prestigious timepiece names including Omega, Longines, Breguet and Tissot. The group also produces key components, giving it a vertically integrated structure that few competitors can match.

Swatch Hit By Watch Market Headwinds

Yet that scale and legacy have not insulated it from recent headwinds. The Swiss watch industry has entered a more volatile phase and the war in the Middle East, alongside ongoing trade tensions and U.S. tariff uncertainty, have disrupted key markets. At the same time, a prolonged slowdown in China, once the engine of luxury growth, has weighed heavily on demand.

The company recently reported declining sales in several key regions, with Greater China in particular proving a drag on overall performance. Operating margins have come under strain as the group balances inventory levels with softer demand.

Although Swatch has maintained a relatively strong balance sheet, its shares have underperformed some peers, fueling investor frustration and lending momentum to Wood’s campaign. That said, its stock price is still up over 40% in the last 12 months and increased 6% following its rebuttal of Wood’s proposals.

Activist Argues Against Swatch

Wood’s argument is that these dynamics make governance reform more urgent and he has called for greater transparency, a more independent board and reassessment of capital allocation priorities, including dividends and share buybacks.

Swatch, for its part, has consistently defended its model. The company argues that its long-term orientation, anchored by stable family ownership, has been a key factor in its long-term success. It points to decades of innovation and brand-building as evidence that its framework works.

As the May 12 AGM approaches, the outcome of this dispute will be closely watched, not only by Swatch investors but by the wider luxury sector. A victory for Wood, however unlikely, would mark a significant shift in the balance of power at one of Switzerland’s flagship companies.

Conversely, a decisive rejection would reinforce the resilience of the Hayek family’s control of Swtahc Group and perhaps signal the limits of activist influence in Europe’s more traditional corporate landscapes.