The disaster of World War II was, quite unexpectedly, followed by an extended period of prosperity. It was as if Europe was finally being compensated for the hardships and sacrifices of its many wars and crises. Average income increased four-fold within the space of just thirty years – a historic record. Globally, too, the “Trente Glorieuses”, as the boom from 1945 to 1975 was known, was like nothing seen before. Both the planned economy of the Soviet Union and the former colonies of Asia and Africa saw unprecedented levels of growth. Some countries, specifically Japan, South Korea and Taiwan, also managed to catch up with the rich western industrial nations. By the mid-1970s, the world had changed utterly from what it had been in 1945.
Increasing prosperity was not just an abstract quantity, but rather something physically tangible and capable of being held. The average Swiss household could now afford a radio, a refrigerator and a car. At last, most homes had central heating and running water. Normal working hours decreased, Saturday became a day off and – for the first time in world history – not only the well-off, but also salaried employees and workers could go on extended vacations. Healthcare made giant leaps forward; people were living more healthily and to a greater age. There were, of course, problems too. Environmental pollution took on worrying dimensions. The bureaucratisation of life provoked militant backlashes. The Cold War repeatedly erupted into “heated” military confrontations. From an economic perspective, however, 1945 to 1975 was undoubtedly a Golden Age.
Just how spectacular this post-war period was became all too clear in the mid-1970s, when the global economy slipped into recession and from that point onwards grew at only half its previous rate. As recently as the end of the 1960s, people were talking about the negative effects of growth and the futility of working life; now, they had to contend with the old problem of unemployment again. In Switzerland, not all industries were hit by the slowdown in growth. The service sector pulled through quite well overall, while industry, in a stark contrast, lost tens of thousands of jobs in the space of just a few years. Within the service sector itself, the trust and audit industry proved to be especially robust. It definitely did not undergo a crisis in the 1970s, and the uptrend continued unabated.
ATAG, for its part, managed to increase operating income from CHF 3.1 million to CHF 325 million between 1955 and 1990, equivalent to an average annual growth rate of 12.6 percent. Through diversification and regionalisation, the company grew in ways that would have been completely unthinkable in 1945. The post-war period transformed humble ATAG into a mid-sized company with a tightly woven domestic network and a series of bases around the globe.
The big expansion did not begin immediately after World War II, however. First of all, ATAG had to get to grips with the situation resulting from the bankruptcy of Basler Handelsbank in 1945. While in the short term this meant a weakening of its position since all of its major competitors – STG, Fides and Schweizerische Revisionsgesellschaft – continued to receive lucrative orders from their parent banks, in the medium term the fact that Basler Handelsbank was no longer in the picture turned out to be an advantage as it forced ATAG to be more innovative and agile. The company would have to reinvent itself if it wanted to keep playing with the big boys.
ATAG made up for the loss of referrals from its parent company by shifting its focus to small and medium-sized enterprises (SMEs). Acquiring large corporations as new clients proved difficult during this phase because these generally chose to use the services of the trust company affiliated with their home bank. Secondly, ATAG expanded its range of services. The new strategy was launched in the mid-1950s, when ATAG began to strengthen the “general banking business” division. Convinced that “our Group’s service offering is not complete without its own credit institution,” in 1955 ATAG founded a proprietary bank as a subsidiary at its head office in Berne – Bank- und Finanzinstitut AG. Looking back, the decision was prompted by the fact that it created a source of income that was not dependent on billing working hours: “Quand le banquier dort, les intérêts courent.” One year later, “Bankfinanz”, as it was referred to internally, set up a branch in Basel, followed by one in Geneva and one in Zurich. It was later joined by Proinvest, an investment fund geared towards real estate and shares and whose certificates were sold by Bankfinanz. The Board of Directors was pleased to note that the competition – STG, Fides and Schweizerische Revisionsgesellschaft – could not engage in any business in this field “because these tasks were reserved for their parent companies – the big banks”. But ATAG was no longer owned by a bank; it owned a bank of its own.
A second step towards diversification followed soon after, this time in the field of management consulting. “Advice on organisational matters” had of course long been part of the service offering, albeit not as a branch in its own right, but rather as an add-on to auditing. Now, however, with the booming economy fuelling demand for rationalisation and automation, ATAG saw this as the perfect opportunity to expand and enhance management consulting as an independent discipline in a big way. In order to generate new orders, the focus was placed on data processing. Back in 1960, a punch card division was affiliated to the Berne head office. Kurt Feller, who later became CEO and Chairman of the Board of Directors of Rieter Holding AG, worked as an assistant in this field at ATAG Berne after completing his baccalaureate. “The punch cards had to be processed using sorting and mixing machines and converted into visual form using the tabulator (printer),” recalls Fellner, who worked in this facility together with five others under Vice Director René Schärlig.
Since data processing was work-intensive and required expensive machines, smaller companies in particular tended to outsource this task. The punch card machines at the Berne head office were soon running at capacity, and so focus shifted to electronic data processing (EDP). Following the foundation of Teledata AG in 1963, the company had “one of the most cutting-edge data processing centres in Switzerland,” as the Board of Directors noted. Commercially, though, Teledata was not a success. In 1975, then, it was merged with Interdata, a data processing centre whose majority stake was held by cement and building materials group Holderbank. The merger gave rise to the largest independent data processing centre in Switzerland. In 1981, ATAG finally acquired all of the shares owned by Holderbank and by doing so became Interdata’s sole shareholder. Other fields were tapped into in addition to banking and data processing. In 1963, ATAG entered the insurance consulting market with Tutor AG, then at the start of the 1970s it built up a property management business. It entered completely uncharted territory in 1963 with the foundation of an advertising and public relations subsidiary, only to sell this off just a few years later after the company failed to develop to the expected extent. However, PR consulting was picked up again in 1979 and remained part of the business into the 1990s.
Rapid diversification not only increased headcount and sales, but also paved the way for a new positioning on the market. In 1969, ATAG began to lay the foundations for the concept of “integrated management consulting”. An internal market study had shown that companies were more interested in an interdisciplinary advisory offering from combined and coordinated specialist teams than in individual services. The idea was that auditors, rather than checking their clients’ accounts, would serve as all-round business consultants, which would require appropriate training in the fields of management and EDP. And so the continually expanding service offering was consolidated into a new service.
The company also spread its wings geographically. In 1960, ATAG joined with US-based Arthur Young & Co. to found a company that would focus on audits for US subsidiaries in Switzerland. The company, in which ATAG held a 50 percent stake, was called Arthur Young & Company AG. It was part of a strategy adopted by the US accounting firm – which had been established in 1894 – to follow its clients to Europe during the post-war boom. ATAG supplied the staff and in return received many audit and advisory mandates from subsidiaries of the clients of Arthur Young & Co. In 1964, it joined the international association of Arthur Young & Co. International. Parallel to this, ATAG set up its own companies abroad. Fiduciaria Italo-Svizzera S.p.A. (FIS) started business in Milan in 1962, while ATOR – which was founded to oversee management consulting abroad – soon had branches in Stuttgart, Essen, Milan, Düsseldorf and Barcelona. In 1973, the firm bought a stake in French auditing company STRECO with offices in Paris and later also in Lyon. As the business expanded, so did the need for space. In the 1950s, inroads were made into French-speaking Switzerland with an office in Biel/Bienne (1957) and the branches in Lausanne (1957) and Geneva (1959). New buildings also went up in the key locations. At the Berne branch, which by the end of the 1950s employed almost twice as many staff as the head office, ATAG was dispersed across four locations; all this changed with a new building at Schauplatzgasse 19 and 21. Meanwhile, at Aeschengraben 7–11 in Basel, 1964 saw a new building erected on three plots of land to accommodate Bankfinanz. A few years after that, the impressive “ATAG House” went up at Bleicherweg 21 in Zurich, together with another office building on Rue d’Italie in Geneva. The expansion was anything but quiet; it showed that ATAG was a force to be reckoned with and it was here to stay.
The diversification strategy was accompanied by a change at the top of ATAG. In 1958, Hans Müller succeeded Manfred Hoessly as ATAG Chairman. At the same time, he served as Chairman of the newly created Central Management Committee. The other members included Hugo Aeberhard, Ernst Eggenschwiler, Emil Vogt, Willy Müller, Dr. Roger Voumard, Michael Hoessli, Prof. Dr. Rudolf Probst and Otto Germann. The Board of Directors was joined in 1955 by Dr. Otto Zipfel, former Delegate of the Federal Council for Job Creation (Bundesrat für Arbeitsbeschaffung) and member of the “Study Commission for the possible acquisition by Switzerland of its own nuclear weapons” (Studienkommission für die allfällige Beschaffung eigener Atomwaffen). The General Directors Probst and Germann were also elected to the Board of Directors. This was due to the fact that Hans Müller, after barely one year in office, had already made arrangements for his succession. He explained to the Board of Directors that he intended to head up the company until 1967 – its 50th anniversary – and then hand over the position to Rudolf Probst, whom he described as “best qualified” for this role.
The transition of management from Manfred Hoessly to Hans Müller marked the beginnings of a new corporate image for ATAG. Firstly, a competition was held to design a new company logo. The company also started using its financial autonomy as a sales argument. From 1960 onwards, Annual Reports contained the following words below the new company logo: “Allgemeine Treuhand AG brings together experts in business consulting: accountants, tax advisors, lawyers, economists, business engineers and other specialists.
The majority shareholding belongs to a foundation that is dedicated to employee welfare. The company is therefore completely independent.” In 1964, Hans Müller handed over the position as Delegate as planned to Prof. Dr. Rudolf Probst. Three years later, he also took over as Chairman of the Board of Directors. Probst, a lawyer qualified to teach law at university level, was the Chairman of the Swiss Cheese Union and a Colonel in the Swiss army. He joined the company in 1945 as Vice Director of the Berne office. When he assumed responsibility for operational management, ATAG already had an impressive number of subsidiaries; at Probst’s suggestion, the Board of Directors set up an executive committee. Gesellschaft für Finanzierungen und Beteiligungen, which had performed trust administration since 1922, served as the main holding company for the subsidiaries.
The process of diversification and internationalisation pushed HR policy into the foreground at ATAG. During the post-war growth, it was not easy to find enough suitable staff. In the internal company magazine ATAG Bulletin, which appeared several times a year starting in 1970, an unknown author quipped that ATAG would soon go the way of a landlord who hangs a sign in his pub bearing the inscription “Be nice to the staff, we have enough customers”. The company’s management counteracted this problem with two packages of measures. On the one hand, they wanted to attract and retain good staff by strengthening the firm’s welfare arrangements. In 1966, an occupational pension fund was set up offering better benefits than those at BHB. The company established a fund, the Hans Müller-Fonds – named in honour of its retired Chairman – to support the professional careers of ATAG employees. This is where the second measure came in: ATAG evolved into a training organisation. An international Arthur Young Seminar was held for the first time in 1962, attended by a large number of ATAG staff. The first ATAG in-house auditor course was held that same year, led by Michael Hoessli. Alongside this, an auditor school was introduced in 1964 under the patronage of the Chamber of Trustees and Auditors (Treuhand- und Revisorenkammer) in the aim of preparing auditors for the diploma examination. Advertising brochures on accounting had been distributed in universities a year earlier in 1963 to generate interest in the profession among young people. The early 1970s then saw the creation of a training concept to nurture “above-average specialists, generalists and managers”. In addition, annual senior manager conferences were held starting in 1969.
Rudolf Probst stepped down from his position as Delegate of the Board of Directors in 1974. He was succeeded by Dr. Peider Mengiardi, a lawyer, who had started his ATAG career as Authorised Officer at the Berne office in 1961 before being transferred to Basel in 1968 with the mandate of reorganising the legal department at the head office. He had been a member of the Central Management Committee since 1972. Prior to being elected Delegate he had taught at the University of Berne as Associate Professor and had become a member of the Swiss Lawyers’ Association in 1976. The Central Management Committee now consisted of him, Max Attenhofer, Fritz Christen, Karl Müller, Hans Weiss and Dr. Peter Welti. Probst retired from his role as Chairman in 1979 and Mengiardi took his place. Like his predecessor, Mengiardi also chaired the Dr. Manfred Hoessly-Stiftung. The other members of the Board of Directors alongside Mengiardi were Roger Voumard, Hans Welti, Dr. Leonhard Gysin, Maître Jean-Claude Jacquemond, Willi Löliger, Prof. Dr. Walter Winkler, Dr. Ernst Höhn, Fritz Christen and Karl Müller.
A broad service offering and integrated consulting were what clients wanted. From a firm’s perspective, it was convenient to get not only accounting but also other services from the same trust company. ATAG offered clients a comprehensive one-stop shop. The motto was: “Everything from a single source.”
Its relationship with company Kühne + Nagel is a perfect example of this. As tax advisor to Alfred Kühne – son of the company’s founder August – Peider Mengiardi helped relocate the head office of the international logistics firm to Pfäffikon (canton of Schwyz) in the mid-1970s. Kühne took a pessimistic view of the future political development of the Federal Republic of Germany. He also valued Switzerland as a haven of stability and often spent his vacations in the Lenzerheide mountain resort in the Canton of Graubünden, where he met Mengiardi. Together with Alfred’s son Klaus-Michael Kühne, who took over the reins in the 1960s, Mengiardi drove around Switzerland in search of suitable locations and cooperative authorities. After setting up shop in Switzerland, ATAG took over the role as auditor for Kühne + Nagel and their relationship deepened. Klaus-Michael Kühne remembers: “ATAG also offered us their advisory services right from the beginning. They helped us with the issuing of work permits, the recruitment of staff and the optimisation of our tax position and worked with us to solve complex accounting and internal auditing problems.” Furthermore, Peider Mengiardi served on the Board of Directors of Kühne + Nagel and helped set up a charitable foundation run by the Kühne family. Back then, auditor and company enjoyed a close and integrated relationship – something we can no longer imagine today.
An all-around service like this was very lucrative for ATAG. Within the Central Management Committee, however, there was the feeling that the impending stock corporation law reform – a working group had been busy since 1972 drafting proposed amendments – would no longer allow auditors to perform auditing services, serve as a member of the Board of Directors and provide accounting services for one and the same client, as in theory this could impair their independent judgement.
Bank audit had already seen more stringent requirements placed on it by new legislation. The prohibition on companies that performed audits conducting banking business was now reinforced by the provision that auditing firms had to be financially independent from the company being audited. Due to this change, ATAG gained its first major bank as an audit client. Schweizerische Bankgesellschaft (Swiss Bank Corporation, SBG) had until that time employed its subsidiary Schweizerische Revisionsgesellschaft (Revisuisse) as auditor. Since the Swiss Federal Banking Commission (SFBC) no longer permitted this financial proximity between auditor and audit client, SBG awarded the mandate to ATAG company Koreag. The mandate brought in over one million Swiss francs and employed a good 30 people over three months. Peider Mengiardi spoke of a “new phase of audits in compliance with Swiss banking law”.
Financial independence, then, had significant advantages over being awarded mandates by a big bank. This was also emphasised in the Annual Report 1975: “The fact that [...] various large mandates have been transferred to us, something that would have hardly been conceivable without our independence [(italics in original)], shows us that the importance of a truly independent large audit and advisory firm is being identified and recognised in more and more sectors of the economy.” Large corporations that were affiliated with banks continued to award their mandates mostly to the competitors, however. Small and medium-sized enterprises were without doubt the most important client segment for ATAG.
The strengthening of bank auditing raised the question of the company’s position vis-a-vis its own credit institution. Bank- und Finanzinstitut AG had turned a good profit until the beginning of the 1970s. After the onset of economic recession, though – barely felt across ATAG as a whole – earnings began to decline. Income from interest rate business fell, and the Zurich office started to post losses. At the end of the 1970s, the Board of Directors decided to separate the firm from the bank, which in 1978 had total assets of CHF 171 million and a staff of some one hundred. A decisive factor in the planned sale was that the bank was supporting an apparatus disproportionate to its size and was also affected by staff shortages. Moreover, a good twenty years after it was founded, people were questioning behind closed doors why ATAG needed a bank in the first place. Mengiardi responded to the question from Board member Dr. Winkler as to whether there were sufficient arguments to keep the bank that, in his eyes, the bank had always been somewhat of a foreign entity. Indeed, it made little sense for its in-house asset manager to compete with its own subsidiary. ATAG therefore sold off Bankfinanz in stages beginning in 1979 to Amro Bank, which, at that time, was the Netherlands’ second-largest credit institution.
The lucrative asset management business within ATAG was left untouched. In 1977, though, an internal code of conduct was adopted. This move was prompted by the “Chiasso scandal”, when directors of a branch of Credit Suisse in Chiasso lost over two billion Swiss francs while speculating with foreign client assets they had transferred to Liechtenstein-based companies to keep them out of sight of the tax authorities. Any such “active involvement in practices to avoid or evade domestic or foreign taxes” at ATAG, which until then had been party to such activities through legal entities in the Principality of Liechtenstein, was from that point on completely taboo.
Parallel to the sale of Bankfinanz, a major investment was on the cards. The management of IHA Holding, a holding company containing several market research companies, had contacted ATAG with a view to working together. “This is a brilliant and reputable institution,” reported ATAG Board member Dr. Gysin, who knew IHA from other business relationships. The Central Management Committee shared this impression, and in 1979 ATAG acquired a stake in the IHA group in Hergiswil. The purchase price of CHF 5.4 million was more than offset by the proceeds of the bank sale (CHF 6.5 million).
A few years after acquiring the stake in the IHA group, ATAG’s diverse service offering was divided into three key areas of focus: assurance services, advisory services and business information. Assurance services included auditing and financial consulting. Advisory services also housed tax and legal advice, administration and accounting for third parties, property management, asset management, occupational pension advice, management of offices and the new department for mergers and acquisitions, founded in 1986, alongside management consulting proper. Business information comprised the IT services of Interdata and the market research activities of IHA Holding; other participations were added later on. Measured in terms of sales, these three pillars of the ATAG Group were roughly equal in size until the mid-1990s.
At the beginning of the 1980s, the Central Management Committee identified deficiencies in terms of regional presence. While the company was well established in Basel, Berne, Zurich and, increasingly, in Western Switzerland, it was “still practically unknown” in the eastern and central parts of the country. The plan now was to strengthen the smaller offices, which in the meantime also included Fribourg (1977) and Neuchâtel (1978), as well as to buy up well-managed smaller trust companies and integrate them into ATAG. ATAG’s independence was a major asset when it came to purchasing consulting firms. It wanted to take quick and full advantage of this, since the assumption within the Central Management Committee was that sooner or later STG, Fides and Revisuisse would also go down the route of a management buy-out. With that in mind, beginning in 1982 ATAG established branches in St. Gallen, Solothurn, Chur, Winterthur, Sion, Kreuzlingen, Brig, Lucerne, Herisau, Zug, Buchs, Lugano, La Chaux-de-Fonds and Ascona. By 1994, it had 23 offices throughout Switzerland and ran several small trust agencies as subsidiaries. Not wanting to lose existing client contacts, not all the companies bore the ATAG name. ATAG’s presence in Western Switzerland was given a particular boost in 1982 through the merger with Société Fiduciaire Lémano, which had a good 60 employees.
At the end of the 1970s, finally the opportunity presented itself to acquire all of the shares of ATAG. In 1976, Paul Sacher transferred his stake, which still amounted to a good one-third of them, to a foundation. Mengiardi and Sacher agreed that Mengiardi would be given a seat on the Foundation Board of Paul-Sacher-Stiftung and so have an overview of what happened with the foundation’s assets. In 1980, Sacher wanted to sell his ATAG shares since the foundation needed funds to build a property, and Sacher asked Mengiardi whether ATAG would like to buy its own shares. The Central Management Committee and the Board of Directors quickly reached the consensus that this constituted a unique opportunity to secure full access to distributed profits and one hundred percent of voting stock. In this way, the Dr. Manfred Hoessly-Stiftung acquired 943 ATAG shares effective 1 January 1981 for a price of CHF 11,326,000 and so now held over 98 percent of the share certificates. The remaining shares were bought from employees and third-party shareholders by the end of the year. “From that point on,” explained Peider Mengiardi in an interview, “we were able to do as we saw fit.” This also meant that ATAG employees could be given a greater share in the company’s profits.