This document discusses recent trends in corporate governance in Greece, including new legal requirements. It outlines how corporate governance involves many stakeholders, from shareholders and board members to regulators, creditors, and society. Recent Greek laws have introduced rules on board remuneration policies, related party transactions, and minority shareholder rights. Regulators influence governance through enforcing liabilities while creditors can impact governance during normal business or default situations. The document emphasizes that corporate governance is about more than just rules and instead concerns broader societal interests.

1. Corporate Governance
and the Law
Trends and increased requirements in light of
the new corporate law framework in Greece
23 September 2019

2. 23 September 2019PwC | Corporate Governance and the Law
Introduction

3. 23 September 2019PwC | Corporate Governance and the Law
Corporate governance concerns several stakeholders
The Company
Shareholders
Proper board composition and
functioning
Executives
Auditors
Employees
And, in most Greek
companies, the …family !
Creditos and counterparties
Banks
Bondholders
Suppliers
Customers
Investors
Regulators
Capital Markets Committee
Tax authority
Courts
Central banks
Independent authorities
But corporate governance also runs beyond the above, and starts being a concern to society as a whole

4. 23 September 2019PwC | Corporate Governance and the Law
“Generating value for
shareholders AND
contributing to wider
society”
“Even America’s famously ruthless bosses
agree. This week more than 180 of them,
including the chiefs of Walmart and
JPMorgan Chase, overturned three decades
of orthodoxy to pledge that their firms’
purpose was no longer to serve their owners
alone, but customers, staff, suppliers and
communities, too.”
Corporate governance concerns several stakeholders

5. 23 September 2019PwC | Corporate Governance and the Law
The main milestones of specific corporate
governance framework introduction in Greece
2000 2008 20192002 201001 03 04 05 08 09
L. 3873/2010
Annual Corporate Governance
Declaration
2019?
New Corporate
Governance law
expected
Ν. 4548/2018
New Corporate
Law
L.3016/2002
Governance for listed companies
L.3693/2008
Audit Committee
Disclosure obligations
Ν. 3884/2010
Minority rights
Disclosure obligations
07
Ν. 4449/2017
Audit Committee
06
2013
Corporate Governance
Code
02
HCMC 5/204/2000
Conduct rules

6. 23 September 2019PwC | Corporate Governance and the Law
Recent developments in corporate law

7. 23 September 2019PwC | Corporate Governance and the Law
Remuneration policy
The Remuneration Policy minimum content must set out:
• The expected contribution in terms of strategy, long-term well being and viability of the
company,
• Different variables taken into account and how these are factored in (e.g. fixed vs variable
remuneration, stock-options, grants, dividends, etc),
• Financial and non-financial criteria regarding the variable element of remuneration,
• How salary cost and working conditions of all employees is factored,
• Description of basic aspects of employment contracts, such as notice periods, redundancy
compensations, additional wage costs and conditions for their deferral of recovery from the
company,
• The decision making process, re-assessment policies, measures to avoid conflict of interest
situations and committees roles in the process,
• Deviation from the policy- conditions and process
The Remuneration Policy is approved by shareholders and has a maximum duration of
4 years
Introducing EU
Directive
2017/828 of 17
May 2017 and the
say-on-pay
principle

8. 23 September 2019PwC | Corporate Governance and the Law
Remuneration policy
The Remuneration Report minimum content must set out:
• The total amount of remuneration per variable and participation (%),
• Justification on performance criteria and compliance with remuneration policy,
• Annual variation of compensation and of company performance along with average
employee cost (excluding executives) during the last 5 years,
• Any other compensation received from an affiliate,
• Participation in stock option plans and any exercised option rights,
• Information on remuneration recovery,
• Deviation from policy and justification of the exceptional reasons causing it.
The Remuneration Policy is submitted to shareholders “for discussion”
Increased
transparency on
Board
remuneration (vs
privacy
concerns?)

9. 23 September 2019PwC | Corporate Governance and the Law
Remuneration policy
Key features of the new framework
• Definition based on IAS 24 and 27
• Invalidity if not approved
• Board has primary responsibility to approve related-party transactions
• Carve-out for inter alia:
- day-to-day transactions (10%-of-asset rule),
- transactions with subsidiaries,
- transactions with shareholders provided that equality principle is respected
• Requirement for fairness opinion
• Publication requirements
• Minorities of at least 5% may request for shareholder approval
• Special rules on voting rights for interested shareholder
A new framework
with checks and
balances between
Board and
Shareholders

10. 23 September 2019PwC | Corporate Governance and the Law
Other key features of the new corporate law
Provisions on
shareholder
unions
Staggered
Board
Golden leash
Role of
Committees
Conflicts of
interest

11. 23 September 2019PwC | Corporate Governance and the Law
How stakeholders can influence
governance

12. 23 September 2019PwC | Corporate Governance and the Law
Shareholders – investors in listed companies
Union of
shareholders
Direct Board
appointment
Say-on-pay
Board liabilities
Minority rights
Challenging
related party
transactions

13. 23 September 2019PwC | Corporate Governance and the Law
Shareholders in private / family-owned companies
Governance arrangements normally based on:
• General corporate law provisions
• Shareholders agreements
• In family companies though mostly on informal understandings
• Court decisions when things go wrong
More complex arrangements to ensure long term succession:
• Trusts
• Foundations
• Written family arrangement documents (framework agreements)

14. 23 September 2019PwC | Corporate Governance and the Law
Regulators - Authorities
Enforcing board
liabilities
• Special rules for banks (e.g. restrictions on remuneration)
• Regulated businesses
Special rules by
law
State ownership
• Taxation
• Environmental, safety etc.
• Special governance of state owned companies
• Rules for ΤΑΙΠΕΔ - ΕΕΣΥΠ

15. 23 September 2019PwC | Corporate Governance and the Law
Creditors (banks, bondholders etc.)
Normal course of business
• Contractual provisions (e.g monitoring
covenants etc.)
• Limited ability by law to impact on governance
• Share pledges normally do not provide voting
rights exercise until needed
• Possibility to request for guarantees or
otherwise object on corporate reorganisations
and share capital reductions
Default situations
• Enforcing pledge and acquiring voting rights
• Appointment of administrator under special
rehabilitation regime (art. 106)
• Appointment of special administration under Code
of Civil procedure provisions
• Bankruptcy

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“Good corporate governance is about 'intellectual honesty’
and not just sticking to rules and regulations”
Mervin King
Governor of the Bank of England