Directors’ Duties in Greece

>> Powers and Duties in Greece

You must act within the powers imposed by the Greek legislation and the Articles of Incorporation. As a company director you are required, alongside the other directors of the company, to administrate and manage the company’s affairs and to decide to take any action pertaining to the management of the company and its assets. As a director you must generally pursue the company’s aims in good faith and in the company’s best interest, according to the law and the company’s Articles.

Duties – skill and care

In exercising directors’ powers, you are  required to exhibit a certain degree of care, diligence and skill that a reasonable director  and prudent entrepreneur would exercise in  the same circumstances.

Duties – general

In general, directors owe the following duties  to the company:

  • duty to act as a prudent businessman
  • duty of care
  • duty of loyalty
  • duty to disclose all relevant information to the other board members
  • duty of confidentiality
  • duty to pursue the corporate objectives of the company

Board members’ general duties arise out of their managerial responsibilities as well as their fiduciary duties towards the company. The board of directors represents the company in all judicial and extra-judicial affairs and matters. It works with and binds the company towards third parties with its decisions and actions. It also resolves on every action concerning the management of the company (eg signing contracts, employing employees, resolving on filing of legal actions, etc), its property and carrying out the company’s objectives. The directors decide collectively on the company’s affairs, with the exception of the cases where specific powers are assigned to one or more of them (eg to the Managing Director, General Manager) or the shareholders.

The directors have a duty of trust and loyalty towards the company with the directors being obliged to observe the confidentiality of all company information which became known to them due to their capacity as directors. In case of breach of the confidentiality requirements by a director, the company may claim compensation. Additionally, the company is able to file an injunction as a provisional remedy, requesting the prohibition of any disclosure in the future or the immediate return of documents that the company has handed over to the director who breached his duty of confidentiality.

Please note, in order to limit exposure and ensure better management performance, the Greek Corporate Governance Code provides that the board should have access to independent professional advice at the company’s expense where the board judges it necessary to fulfil its responsibilities. Non-executive members should have the right to propose the appointment of professional consultants to the chairman for this purpose.

Duties – other

The directors must comply with all applicable legislation regarding anti-corruption and legalisation of income arising from illegal and criminal acts, disloyalty, defrauding of creditors or intentional bankruptcy. Directors may face criminal charges if found to be in breach of said obligations and legislation.

Securities law

Directors of listed companies are expected to appropriately disclose insider information. Failure to do so, or doing so wrongfully, could lead to criminal sanctions including the imposition of fines on the director for insider trading or market manipulation.

Insolvency law

Directors are expected to file for insolvency as soon as it becomes apparent the company is unable to pay its debts to creditors. It is essential that where the risk of insolvency is apparent, the directors work to show due care towards the company and all relevant third parties; please note that preferential payment of debts can be treated as discriminatory. Where directors fail to do so they can be liable towards the company and its creditors for damages, as well as liable for certain criminal sanctions.

Anti-Trust law

Directors should also be aware of the relevant Anti-Trust legislation, with the breach of national and international competition law leading to both civil and criminal liability. Recent legislative clarifications on the protection of free competition now states that directors can and will be personally liable for any anti-competitive behaviour. The company, and its directors are recommended to enact specific compliance programmes and policies to ensure that no breaches occur.

Annual accounts

Following the end of each financial year  (31 December), the board is responsible for the collating and preparation of the annual financial statements, namely:

  • the balance sheet
  • the results of the financial year
  • the table of the distribution of profits and the

annex thereof, in accordance with the Law

The yearly financial statements must be signed by the Managing Director or another appointed director, the General Manager and the Accounts Manager.

The board must convene annually and at least twenty (20) days prior to the annual ordinary general shareholders meeting (which takes place within six (6) months following the end of the financial year). This is in order to prepare and submit the relevant documents to the annual general shareholders meeting for approval and then publishing with the relevant authorities

Additional reporting requirements

Alongside the annual financials, the directors must also file a report of the board describing the course of business, the company’s financial status and the prospects of the company, as well as the auditors’ report concerning the results of the previous financial year. The directors must ensure that the annual accounts and the board report are appropriately drafted in accordance with the international accounting principles and then published correctly. The directors must ensure that the shareholders appoint the statutory auditors and are liable towards the company if they fail to do so.

The board must also ensure that the company files the annual income tax and all other tax declarations (eg for payment of VAT, tax on immovable properties).

Latest version updated 4th April 2018

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