Greece: Corporate Governance

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This country-specific Q&A provides an overview to tax laws and regulations that may occur in Greece.

This Q&A is part of the global guide to Corporate Governance. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/corporate-governance/

  1. What is the typical organizational structure of a company and does the structure typically differ if the company is public or private?

    The organizational structure of a company in the form of a societe anonyme (SA), equivalent to a corporation, consists of the General Meeting of shareholders and the Board of Directors. These are the main corporate actors. In principle, the organizational structure of public and private companies are similar although there are some differences and governance rules are more detailed in case of public companies.

    Apart from the General Meeting and the Board of Directors, key corporate actors are also the Managing Director (which is a member of the Board) and any Committee.

    The General Meeting of shareholders is the highest governing body of the Company and is the only only competent body to resolve on certain material issues (please refer to answer under 20 for more details).

    The board of directors’ duty is to perform the management of the company, and to represent it judicially and out-of-court, i.e. in its relations with third parties. In general, the board is competent to administer the assets of the company and to perform the object of the company’s activity, within the limits of the law and except for matters decided by the general meeting of shareholders.

    The board of directors may delegate the powers of management and representation of the company to one or more persons, members or non-members, if so permitted, in accordance with the articles of incorporation. The articles of incorporation may also authorize the board of directors or require the board to entrust internal control to one or more non-members.

    Additionally, following a respective provision in the articles of incorporation or a resolution of the board of directors, an executive committee may also be elected and be delegated certain powers or functions of the board of directors. In such a case, the composition, responsibilities, tasks and manner of decision-making of the executive committee, as well as any matter relating to its operation, shall be governed by the articles of incorporation or the resolution of the board of directors that elected the committee.

    The Hellenic Federation of Enterprises has also issued a Code of Corporate Governance (the CGC), which is not mandatory for companies but rather soft law. Such Code provides for companies admitted to a regulated market, that in addition to the board of directors, an audit committee shall be established for auditing the financial information, the efficient operation of the internal audit of the company, risk management and for auditing the independency and objectiveness of the auditors of the company.

    In public companies thus, the Board of Directors operates through various committees, such as the audit committee, the remuneration committee and nomination committee. In addition, public companies have an (i) internal audit unit; (ii) a shareholders relations unit; and (iii) a corporate announcements unit. The board, nevertheless, remains fully responsible for decisions under its responsibilities. Unless the board decides expressly to delegate particular powers to the committees, the committees have an advisory role. Board committees aim at developing specialised knowledge, discuss issues within their remit in depth, and make recommendations to the board.

    In public companies the internal auditor is also a key corporate actor. The internal auditor is appointed by the Board but is independent and is supervised by non-executive Board members. The internal auditor monitors the consistent compliance of the public entity with the applicable corporate governance legislation, the internal operation regulation and its articles of association and it reports any conflicts of interest between the company and the members of the Board. The internal auditor submits to the Board on a quarterly basis an internal audit report and is present at the shareholders’ general meetings.

  2. Who are the key corporate actors (e.g., the governing body, management, shareholders and other key constituencies) and what are their primary roles? How are responsibilities divided between the governing body and management?

    Please see the answer to Q1.

  3. What are the sources of corporate governance requirements?

    The main corporate governance source for Societes Anonymes is set out in Law 4548/2018 (“Law”). The Hellenic Federation of Enterprises has also issued a Code of Corporate Governance, which is not mandatory for companies but rather soft law and applies to companies admitted in a regulated market. Given that the Code of Corporate Governance was implemented before the newly enacted Law on Societes Anonymes, it is anticipated that some amendments may take place in order to align to the new Law.

  4. What is the purpose of a company?

    The purpose of a company is to perform an activity, usually a commercial activity. It is at the discretion of the founders and shareholders to determine the object of the activity, assuming that such activity is lawful. In case the activity is unlawful, the company can be declared void, pursuant to a court judgment.

  5. Is the typical governing body a single board or comprised of more than one board?

    The typical governing body in Greece is a single board of directors (i.e Greece follows one-tier governing model). Among the board of directors’ duties, is the management of the company, its judicial and out-of-court representation. The board shall consist of at least 3 members and not more than 15, the exact number of which is determined by the general meeting of the shareholders or the articles of incorporation.

    Furthermore, for extra small or small sized companies, the Law provides for the possibility of appointment of a single-member administrative body (director-manager) elected by the general meeting. The consultant-manager shall always be a natural person and the same rules applicable to the board of directors shall apply as such. Large and medium-sized companies or companies with shares admitted to a regulated market, are exempted from the possibility of appointing a single-member board.

    The board of directors may delegate the powers of management and representation of the company to one or more persons, members or non-members, if so permitted, in accordance with the articles of incorporation. The articles of incorporation may also authorize the board of directors or require the board to entrust internal control to one or more non-members.

    Additionally, following a respective provision in the articles of incorporation or a resolution of the board of directors, an executive committee may also be elected and be delegated certain powers or functions of the board of directors. In such a case, the composition, responsibilities, tasks and manner of decision-making of the executive committee, as well as any matter relating to its operation, shall be governed by the articles of incorporation or the resolution of the board of directors that elected the committee.

    The Hellenic Federation of Enterprises has also issued a Code of Corporate Governance, which is not mandatory for companies but rather soft law. Such Code provides for companies admitted to a regulated market, that further to the board of directors, an audit committee shall be established for auditing the financial information, the efficient operation of the internal audit of the company, risk management and for auditing the independency and objectiveness of the auditors of the company.

  6. How are members of the governing body appointed and removed from service?

    The election of the board of directors may be effected by the following ways: a) by the articles of incorporation, b) by a shareholder, c) by the general meeting of the shareholders, d) on the basis of directories, e) by a civil Court and f) by the board of directors, as provided in detail below:

    a) By the articles of incorporation: The company's first board of directors is defined in the articles of incorporation. If the first board is not provided in the articles of incorporation then it is elected by the general meeting of the shareholders, unles specified otherwise in the law or the articles.

    b) By a shareholder: The articles of incorporation may provide that a shareholder or shareholders are entitled to directly appoint directors but not more than two-fifths of the total number of the board of directors. The exercise of this right shall be exercised prior to the election of the board of directors by the general meeting, which in that event, shall be limited to the election of the rest members of the board of directors. The shareholder or shareholders exercising the above right shall announce the appointment of the members of the board of directors to the company three (3) full days prior to the meeting of the general meeting and shall not participate in the election of the remaining board of directors.

    c) By the general meeting of the shareholders: The Law provides that unless otherwise specified by law, the board of directors is elected by the general meeting of the shareholders.

    d) On the basis of directories The articles of incorporation may provide that candidate members of the board may be nominated on the basis of directories (lists) and that they are elected according to the proportion of votes each list receives. This way of election of the board is not applicable if the board has been elected as provided under (b) above.

    e) By a civil Court: The Greek Civil Code provides that in the absence of the persons required for exercising the management of a company, then by a Court order, the president of the Court of Peace shall appoint a provisional board of directors at the request of any person having a lawful interest thereof.

    f) By the board of directors: In the event of resignation or death or any other loss of membership or board members, the board of directors may elect its members in replacement of the remaining members. The election by the board of directors shall be according to a board resolution of the remaining members, if at least three (3), and is valid for the remainder of the term of office of the member being replaced.

    The service of a Director of the board is ended either by resignation of the member of the board, expiration of its service term, by death of a member of the board, or election of a new board of directors as described above.

  7. Who typically serves on the governing body and are there requirements that govern board composition or impose qualifications for directors regarding independence, diversity or succession?

    A natural person who does not have full legal capacity may not be a member of a board of directors or a representative of a legal person who is a member of the board of directors.

    Any additional conditions, incapacity or incompatibility provided for by other provisions of the applicable legislation are not prejudiced. The articles of incorporation may provide for further eligibility conditions for members of the board of directors, provided that these conditions do not conflict with other provisions. The maximum term of the board of directors is six (6) years.

    The members of the board and any third person to whom powers have been delegated to, shall, in the performance of their duties and responsibilities, comply with the law, the statutes and the lawful decisions of the general meeting of the shareholders. They must manage corporate affairs in order to promote the corporate interest, supervise the execution of the decisions of the board of directors and the general meeting and inform other members of the board of directors on corporate affairs. The members of the board of directors must observe the legal records, books and records and make sure that the required publications according to the financial standards are made regarding the financial statements of the company.

    The Board of a public company is composed by executive and non-executive members. The non-executive members should not be less than the 1/3 of the members of the BoD. Among the non-executive members of the BoD at least two members should be independent. Independent non-executive members of the BoD should not hold a stake of more than 0.5% in the company and should not have a dependence relationship with the company or related parties or individuals. The independent BoD members are elected by the General Meeting of the shareholders of the company and the non-executive members are appointed by the BoD. If an independent member of the BoD is substituted for any reason by an interim member, the interim member should also be elected as an independent member.

    The CGC usually adopted by listed companies, provides for additional requirements in relation to the qualifications of the members of the BoD. Criteria for the diversity of the composition of the BoD are applied and the company should publish at its annual corporate governance declaration data on the diversity policy applied in relation to the managers and the directors, as well as the percentages of gender respresentation in the company.

    The Law sets out rules for a) loyalty, b) non-compete and c) transparency obligations for the members of the board of directors.

    In brief,

    a) Loyalty (fiduciary duty): The board members should: (i) not pursue own interests contrary to the interests of the company, (ii) disclose in due time to the other members of the board their own interests, which may arise from the transactions of the company, which fall within their duties, as well as any conflict of their interests with those of the company or its affiliates, (c) maintain strict confidentiality for company affairs and business secrets, which have become known to them as a consultant.

    b) Non- compete: It is prohibited for the members of the board of directors who are involved in any way in the management of the company to act for their own account or for the benefit of third parties without the permission of the general meeting or the provision of the articles of incorporation for their own account to the purposes of the company, as well as to participate as general partners or as sole shareholders or partners in companies pursuing such purposes.

    c) Transparency: The conclusion of contracts between the company and members of its board shall be prohibited and shall be void, as well as the provision of collateral and guarantees to third parties in favor of such persons without special permission granted by a decision of the board of directors or of the general meeting shareholders. Said provision contains numerous exclusions from the general prohibition.

  8. What is the common approach to the leadership of the governing body?

    The Board of Directors consists of at least a Chairman. A company may, at its discretion, also appoint one (or more) Managing Directors. The Managing Director is usually granted with all or most of the powers of the Board, together or separately from the Chairman. The Chairman is awarded by Law with some additional powers regarding the operation of the governing bodies, such as the convocation of a Board meeting and General Meeting.

  9. What is the typical committee structure of the governing body?

    For public companies, Greek law provides the establishment of an audit committee, whose main role is to supervise the internal auditors of the company, to review the disclosed financial information, to audit and evaluate internal control systems, to assess and coordinate audit functions and procedures in accordance with the applicable legislative framework, to select the chartered auditors for each financial year and to evaluate their performance. The audit committee is comprised by at least three members and can be either established by the Board or be an independent committee of the listed company. The members of the audit committee are independent and have adequate knowledge of the industry of the listed company and at least one member is a non-active chartered auditor or has adequate knowledge of accounting and audits.

    Other committees provided for in the CGC include the remuneration committee and the nomination committee. The remuneration committee’s main role is to propose to the Board the remuneration of the non-executive members, to review and propose the granting of stock option programs, to suggest performance targets in relation to the stock option programs and in general to submit to the Board any proposal in relation to the remuneration policy of the company. The nomination committee ensures that the process of nomination of the Board candidates is transparent and efficient, by setting the selection criteria and the appointment procedures, submitting proposals in relation to the diversity policy applied by the listed company, evaluating the Board and the desired qualifications of the members and by proposing Board candidates.

  10. How are members of the governing body compensated?

    Members of the board of directors shall be entitled to receive remuneration or other benefits in accordance with the law and the articles of incorporation and, where appropriate, according to the remuneration policy of the company. A fee or benefit granted to a member of the board of directors which is not governed by law or by the articles of incorporation shall be borne by the company only if approved by the general meeting.

    A fee consisting of a share in the profits of the year shall be provided only if this is provided for in the articles of incorporation. The amount of the above remuneration is determined by a resolution of the general meeting. The fee earned from the profits for the year is calculated on the basis of the balance of the net profit remaining after the deduction of the statutory bookings for a statutory reserve and the distribution of the minimum dividend to the shareholders.

    For listed companies admitted on a regulated market this paragraph shall be without prejudice to the conditions set out for the remuneration policy of the company (see below).

    Remuneration to members of the board of directors for services to the company on the basis of a special relationship, such as an employment contract, a work or a contract, shall be paid following the formalities for compliance with the transparency rules laid down in Articles 99 to 101 of the Law.

    The general meeting may authorize a down payment for the period until the next ordinary general meeting. The down payment is subject to its approval by the next ordinary general meeting.

    Remuneration Policy for listed companies:

    Companies listed on a regulated market are required to adopt remuneration policies for the members of the board of directors and, if any, for the general manager or his substitute. Such remuneration policy shall be subject to the approval of the general meeting and its duration may not exceed four (4) years from the date of its approval by the general meeting. The articles of incorporation may further extend the remuneration policy to (a) to executives as defined in International Accounting Standards and to (b) companies with shares not listed on a regulated market.

    In exceptional circumstances temporary derogation from the approved remuneration policy shall be permitted, provided that (a) the remuneration policy defines the procedural conditions under which a derogation from its content may be applied, (b) the remuneration policy defines its elements for which the derogation may apply; and (c) this derogation is necessary for the long-term servicing of the interests of the company as a whole or for ensuring its viability.

    The law further sets out the obligatory elements that the remuneration policy should include. A remuneration report is drawn up annually and sets out a comprehensive overview of the remunerations which applied during each financial year. Such reports must include the information set out in detail in the Law. The remuneration report is approved each year by the Annual General Meeting of shareholders and is uploaded on the company’s website for at least ten (10) years.

    Lastly, the law provides that following a resolution of the general meeting, the free distribution of shares to the members of the board of directors and the personnel of the company, as well as of its affiliated companies may be decided.

  11. Are fiduciary duties owed by members of the governing body and to whom are they owed?

    The members of the Board have fiduciary duties against the company, as these are set out above in question 7.

  12. Do members of the governing body have potential personal liability? If so, what are the key means for protecting against such potential liability?

    The members of the board bear personal liability against the company and third parties. Each member of the board of directors shall be liable to the company for damage suffered as a result of an act or omission which constitutes an infringement of his duties.

    This liability shall not exist if the member of the board of directors proves that in the performance of his/her duties he/she has performed the diligence of the prudent businessman operating in similar circumstances. Such diligence shall be judged on the basis of the status of each member and the duties assigned to him by law, statute or decision of the competent corporate bodies.

    If a joint act of more than one member of the board of directors causes damage or if more than one person is responsible for the same damage, they are all jointly liable. The court may also regulate the right of recourse between the liable directors.

    Such personal liability may be waived if acts or omissions of the members of the board are based on a lawful decision of the general meeting or relating to a reasonable business decision taken in (a) in good faith, (b) on an adequate basis of information, for the specific conditions, and (c) solely to serve the corporate interest. The members of board have the burden of proving the above requirements. The Court may also consider that there is no liability for acts or omissions based on a suggestion or opinion of an independent body or committee operating in the company in accordance with the law.

    Same liability shall also apply to persons who have been delegated powers of representation and management by the board or to persons appointed in the board of directors whose appointment is defective. The company's claims time-barred three (3) years after the act or omission.

    Furthermore, personal liability is awarded to directors and managers in tax and social security legislation. Such liability extends to personal assets of the directors and managers.

    Directors and managers may also be held criminally liable for certain offences set out in the Law.

    Protection against such liability may be granted by the company pursuant to D&O insurance or letter of indemnity by the shareholder(s), as the case may be.

  13. How are managers typically compensated?

    Members of the Board may be compensated on the basis of their office (for more details on this please refer to our answer of question No.10 above), although this is not mandatory. Managers and members of the Board may also have an employment agreement (or similar arrangement) with the company.

  14. How are members of management typically evaluated?

    The Law does not provide an evaluation process for members of the board or management. Thus this is at the discretion of the company. Notwithstanding the above, the General Meeting of shareholders monitors the actions of the managers and the members of the board annually, during the meeting and in the context of the approval of the financial statements of the company.

  15. Do members of management typically serve on the governing body?

    Members of management can either be members of the Board of directors, without this however being necessary.

  16. What are the required corporate disclosures, and how are they communicated?

    All companies (whether public or private) must disclose certain resolutions taken either by the Board or by the General Meeting of shareholders as set out by the Law. This includes for example amendments of the Articles of Association, election of board of directors, mergers, invitations to the General Meetings etc. Such information must be submitted to or uploaded on the website of the competent General Commercial Registry within twenty (20) days from the date thereof. Companies subject to International Accounting Standards must also publish certain information (such as the Annual Financial Statements) on their website

    Public companies should include in their annual financial statements a corporate governance declaration where they refer to the corporate governance code adopted by the company, any deviations from the corporate governance code of the company, description of the main features of the internal control and risk management systems and references to the governing bodies of the company, their committees and the policies applied in relation to corporate governance.

    Public companies must disclose to investors all significant resolutions and corporate events, such as invitation of shareholders’ general meeting, the general meeting resolutions etc, as well as any other material information on the company and its shareholding structure. Acquisition and/or disposal of significant holdings in public companies are also disclosed.

    All corporate disclosures are published in the company’s website and the Athens Exchange. The corporate announcement unit of the company is responsible for the creation, update and maintenance of the company’s website and the communication of the company with the competent authorities such the Athens Exchange and the Hellenic Capital Market Commission, and the media.

  17. How do the governing body and the equity holders of the company communicate or otherwise engage with one another?

    The Board is obliged to invite a General Meeting once a year, for the purpose of approving the annual financial statements of the company, and on any other occasion it deems necessary to discuss company matters. Respectively, the shareholders are entitled to request information from the company and to convene a General Meeting in certain occasions, and assuming that they hold a minimum stake in the company (please see more under question 21 hereof).

    In public companies, the shareholders relations unit is responsible to ensure the direct and equal information of the shareholders, as well as the exercise of their rights provided by law and the articles of association of the company. In particular, the shareholders relations unit is, among others, responsible to inform the shareholders on any distribution of profits and dividends, any resignation or modification, any deadlines for the exercise of the shareholders’ rights, any information on the General Meetings, on the adopted resolutions and the acquisition or distribution or cancellation of own shares of the company.

  18. Are dual or multi-class capital structures permitted and how common are they?

    Dual and mutli-class capital structures are permitted. In particular, companies may issue common or preference shares. The preference right can take various forms, such as receiving dividend (in full or in part) prior to the common shares, receiving priority over capital from share capital reduction or liquidation proceeds, etc. Preference shares can also be convertible. A company may also issue warrants and founders titles. All of the above capital structures can be issued in various classes, as well as in different tiers.

  19. What percentage of public equity is held by institutional investors versus retail investors?

    Apart from the minimum free float requirements (which must not be less than 10% of the share capital), there is no other legal requirement regarding the shareholding structure of public companies.

    In practice, institutional investors are primarily engaged in shares of the four Greek systemic banks and certain large non-financial corporations. There is no public data on the overall percentage of public equity which is held by institutional investors versus retail investors.

  20. What matters are subject to approval by the shareholders and what are the typical quorum requirements and approval standards? How do shareholders approve matters (e.g., voted at a meeting, written consent)?

    The general meeting of shareholders is the supreme body of the company and is entitled to decide on each corporate affair in accordance with the Law. Its decisions also bind the absent or dissenting shareholders.

    The general meeting shall have sole power to resolve on:

    a) Amendments to the articles of incorporation. Amendments include capital increases, regular or extraordinary, and capital reductions. b) Election of board members and auditors. c) Approval of the overall management of the company and the discharge of the auditors. d) Approval of the annual and any consolidated financial statements. e) Allocation of annual profits. f) The authorization to provide remuneration or advance payment as described above. g) For listed companies, the adoption of remuneration policy and the salary report. h) Merging, splitting, transforming, reviving, extending the duration or dissolution of the company and i) the Appointment of liquidators.

    The General Meeting is in quorum and validly deliberates on the items on the agenda when shareholders representing at least one-fifth (1/5) of the paid-up capital are present or represented therein.

    If this quorum is not reached, the general meeting shall meet again within twenty (20) days of the date of the canceled meeting, following an invitation to the shareholders of at least 10 full days. At the repetitive general meeting the general meeting is in quorum and validly meets on the issues of the original agenda, no matter what part of the paid-up capital represented in it.

    By way of exception, in the case of resolutions relating to changes in the company's nationality, the change in the scope of the company, the increase in the obligations of shareholders, the regular increase of capital, unless required by law or by capitalization of reserves, the reduction of the capital, changes in the way profits are allocated, merged, split, transform, revive, extend or dissolution of the company, the renewal of authority to the Board to increase the capital, and in other cases specified in the law, then the General Meeting is in quorum when shareholders representing ½ of the paid-up capital are present or represented therein.

    In the case of the exceptions described in the above paragraph, if the required quorum is not reached, the general meeting shall be invited and convene anew and shall be considered to be in quorum and validly resolve on the items on the original agenda, when shareholders representing at least one third (1/3) of the paid-up capital are represented or represented therein. In the case of listed companies or, in any event, when a decision to increase capital is to be taken, the general meeting in the repetitive general meeting is considered to be in quorum when shareholders representing at least one-fifth (1/5) are present or represented therein of the paid-up capital. The articles of incorporation may set higher quorum percentages.

    The shareholders approve matters either by a) convocation of a general meeting, b) a vote without holding a meeting or c) without holding a meeting, only by signing minutes of the resolution.

    Voting without the convocation of a general meeting may only be effected, if the following preconditions apply:

    a) The company's shares are not listed on a regulated market; b) There is specific mention of the possibility of such voting in the articles of incorporation. Decisions on matters of the ordinary general meeting may not be taken in accordance with the procedure set out herein; c) All shareholders have communicated to the company their electronic contact details; d) A minority of one-fifth (1/5) of the capital shall not object to a decision under the procedure set out herein.

    For companies whose shares are not listed on a regulated market, the shareholders may resolve on matters without holding a meeting, only by signing the minutes of their resolution. The signatures of the shareholders or their representatives may be replaced by an exchange of messages by e-mail or other electronic means, if provided for in the articles of incorporation.

    It is to be noted that the articles of incorporation may provide for the possibility of attending the general meeting from a distance by audiovisual or other electronic means, without the physical presence of the shareholder at the venue. Furthermore, the articles of incorporation may provide for the possibility of participating in the voting from a distance, by a letter or by electronic means, held before the meeting. The items of the agenda and ballots may be available and completed electronically via the Internet or in paper form at the headquarters of the company.

  21. Are shareholder proposals permitted and what requirements must be met for shareholders to make a proposal?

    The law provides for the following rights/allowances to the minority shareholders of a company:

    a) At the request of shareholders, representing one twentieth (1/20) of the paid-up capital, to the board of directors, the board is obliged to convene an extraordinary general meeting of shareholders, setting a date for this meeting, which should not be more than 45 days from the date of the request to the chairman of the board.

    b) At the request of shareholders, representing one twentieth (1/20) of the paid-in capital, the board of directors is obliged to include additional items on the agenda of a general meeting already convened if the relevant request is received by the board of directors at least 15 days before the general meeting.

    c) In companies with shares listed on a regulated market, shareholders representing one (1/20) of the paid-up capital have the right to submit draft decisions on matters included in the original or any revised agenda of the general meeting.

    d) At the request of a shareholder or shareholders representing one twentieth (1/20) of the paid-up capital, the chairman of the meeting shall be obliged to defer once only the decision-making by the general meeting, ordinary or extraordinary, on all or certain matters, day of resumption of the meeting, as specified in the shareholder's request, which may not be more than twenty (20) days from the date of the postponement.

    e) At the request of any shareholder submitted to the company at least five full days before the general meeting, the board of directors is required to provide the general meeting with the specific information requested on the company's affairs insofar as they are relevant with the items on the agenda. The obligation to provide information does not exist when the relevant information is already available on the company's website, in particular in the form of questions and answers. Also, at the request of shareholders, representing one twentieth (1/20) of the paid up capital, the board of directors is obliged to announce to the annual general meeting, the sums paid in the last two years to each member of the board of directors or the directors of the company, as well as any benefit to such persons from any cause or contract of the company with them.

    f) At the request of shareholders, representing one tenth (1/10) of the paid up capital submitted to the company within the time limit set in paragraph 6, the board of directors shall be required to provide the general meeting with information on the course of corporate affairs and the assets of the company.

    g) At the request of shareholders, representing one twentieth (1/20) of the paid-up capital, the voting on a topic or items on the agenda shall be made by open vote.

    h) At the request of any shareholder who has been submitted at all times, the board of directors must within twenty (20) days inform the shareholder about the amount of the company's capital, the categories of shares issued and the number of shares in each class, in particular privileged, with the rights granted by each category, as well as any tied shares, both in their number and in the limitations provided. The shareholder will also be entitled to know how many and what shares he owns as they arise from the shareholders' book. This shall not be applicable for companies with shares listed in the regulated market.

    It is to be noted that the articles of incorporation may reduce, but not more than half, the percentages of the paid-up capital required to exercise the minority rights described above.

  22. May shareholders call special meetings or act by written consent?

    At the request of shareholders, representing one twentieth (1/20) of the paid-up capital, to the board of directors, the board is obliged to convene an extraordinary general meeting of shareholders, setting a date for this meeting, which should not be more than 45 days from the date of the request to the chairman of the board. Shareholders may act on written consent, as described above regarding the participation methods in the resolutions of the general meeting.

  23. Is shareholder activism common and what are the recent trends?

    Shareholder activism is not so common. However, the newly enacted Law has introduced the concept of shareholders’ unions. Shareholders can thus act through unions. Such unions take the form of an association as provided by the Greek Civil Code. The unions can provide information regarding the shareholders rights through a website. A Presidential Decree shall be issued by the Ministers of Finance and Development which will set out in more details about the operation of the unions.

  24. What is the role of shareholders in electing the governing body?

    The Law provides that unless otherwise specified by law, the board of directors is elected by the general meeting of the shareholders. For more information please refer to the answer of question No. 6 above.

  25. Are shareholder meetings required to be held annually or otherwise, and what information needs to be presented?

    The general meeting must meet at least once each year by the tenth (10th) calendar day of the ninth month after the end of the financial year in order to decide on the approval of the annual financial statements and the election of auditors (Annual General Meeting). The annual general meeting may also decide on any other matter of its competence.

    The general meeting shall meet extraordinarily at any time whenever the board deems it appropriate or necessary (Extraordinary General Meeting).

    The general meeting convened to amend the articles of incorporation or take decisions requiring an increased quorum and majority (statutory general meeting) may be regular or extraordinary.

    In practice, the information presented in the General Meeting minutes, is the date, time and place of the convocation, the representation of the shareholders in the meeting, the confirmation of its lawful convocation by the president of the general meeting, the items of the agenda and the main body of the resolution of the general meeting on the items of the agenda.

  26. Do any organizations advise or counsel shareholders on whether to approve matters?

    In principle no. See however also our reply under question 23.

  27. What role do other stakeholders, including debt holders, employees, suppliers and customers and the government, typically play in the corporate governance of a company?

    Bond loan documentation may provide that bondholders have the right to participate in General Meetings and to vote therein, in order to secure their rights arising from such loans. In principle, employees, suppliers and customers, as well as the government do not have any role in the corporate governance of the company.

  28. What consideration is given to environmental and social issues, including climate change, sustainability and product safety issues, and are there any legal disclosure obligations regarding the same?

    It is at each company’s discretion to determine its policy with respect to environmental and social issues. In case a company applies such policies, it is common to disclose them on their website and in the press, for marketing purposes.

  29. How are the interests of shareholders and other stakeholders factored into decisions of the governing body?

    There is no specific obligation for factoring in interests of shareholders and other stakeholders into decisions. However, the Law provides that in case (i) certain information regarding a General Meeting resolution are not provided to shareholders who have lawfully exercised such right or (ii) the majority shareholders has acted in abuse of its power, a General Meeting resolution can be annulled. Anullment can be requested by any shareholder holding at least 2/100 of the share capital, in case he/she did not participate at the meeting or objected to the decision, as well as any member of the Board. In case the lawsuit is filed by shareholders who did not receive the information requested, the minimum threshold is set at 1/20 of the share capital. In case there are shareholders who do not have the required amount of shares in order to file above lawsuit, they can request from the company restoration of their damage.

  30. Do public companies typically provide earnings guidance on either a quarterly or annual basis?

    Greek public companies publish financial statements on a bi-annual and annual basis. Only credit institutions and other regulated entities are obliged to publish financial reports quarterly. Publication of earnings guidance (forecasts) by public companies is not market practice and should comply with specific rules (e.g. make reference to annual revenues, pre-tax earnings) in order not to be considered as market abuse. Any deviation from the published forecasted earnings should be published by the company as soon as possible after it realizes that its estimation is to be adjusted based on the actual earnings.

  31. May public companies engage in share buybacks and under what circumstances?

    Trading in own shares by a public company benefits from the exemption from the prohibitions on market abuse, if such trading takes place in the framework of share buyback programs which comply with the conditions set out in Art.5 of Regulation (EU) 2014/596. More specifically, the conditions are the following:

    (a) the full details of the program are disclosed prior to the start of trading;

    (b) trades are reported as being part of the buy-back programme to the competent authority of the trading venue and subsequently disclosed to the public;

    (c) adequate limits with regard to price and volume are complied with; and

    (d) it is carried out with a purpose (i) to reduce the capital of an issuer (ii) to meet obligations arising from debt financial instruments that are exchangeable into equity instruments; or (iii) to meet obligations arising from share option programmes, or other allocations of shares, to employees or to members of the administrative, management or supervisory bodies of the issuer or of an associate company.

  32. What do you believe will be the three most significant issues influencing corporate governance trends over the next two years?

    The Greek financial crisis brought fundamental changes to the business environment and the structure of the Greek economy. One of these changes is the effort of the Greek businesses to adopt a more sustainable business model. The adversities they faced the previous years showcased the need for a new management and internal audit model that sets clearly the lines between shareholders, the management, the board of directors and other stakeholders. Greek businesses still have a long way to go to reach the international corporate governance standards but they are expected to move steadily towards that direction in the future as the Greek economy is reshaped.

    Recent scandals around public companies have caught the attention of the authorities and other organisations which push for stricter corporate governance rules and more scrutiny of public companies. The Hellenic Federation of Enterprises, the Hellenic Bank Association and Athens Exchange Group are some of the stakeholders that support a new stricter corporate governance regime.

    Finally, the financing needs of Greek businesses combined with the current situation of the country’s banking sector create the need for alternative sources of funding for businesses. Institutional investors can emerge to cover this financing gap. These much-needed alternative sources, however, will be attracted only by companies with high corporate governance standards.