Annual Management Report: A New Era in Corporate Governance

In a significant move to enhance corporate governance and transparency, Greece has introduced a range of reforms aimed at strengthening the annual management report. Effective January 1st, 2020, listed companies and public interest undertakings will be required to submit an annual management report that provides stakeholders with a comprehensive overview of their operations.

Mandatory Information

According to Article 150 of the Greek Law on Public Limited Companies (SA Law), the report must contain specific information, including:

• Company strategy
• Financial performance
• Risk management practices
• Corporate governance structure

The content of the report will vary depending on the size of the company, with listed companies required to provide more detailed information.

Enhanced Transparency and Accountability

The reforms also introduce new provisions for the criminal liability of the board for missing any of the required information in both the management report and the corporate governance statement. This highlights the importance of transparency and accountability in corporate governance.

Additional Reforms

In addition, the SA Law introduces a range of other reforms aimed at strengthening corporate governance practices, including:

• The requirement for listed companies to establish an audit committee consisting of mainly independent and experienced members.
• The need for credit institutions and insurance undertakings to establish sound and efficient corporate governance systems that contain clear organisational structures, internal audit systems, and effective risk management processes.
• The obligation for public interest undertakings to conduct statutory audits according to international auditing standards.

Key Highlights

• Listed companies and public interest undertakings must submit an annual management report that provides stakeholders with a comprehensive overview of their operations.
• The report must contain specific information, including strategy, financial performance, risk management practices, and corporate governance structure.
• Criminal liability will be introduced for the board if required information is missing from both the management report and the corporate governance statement.
• Listed companies must establish an audit committee consisting of mainly independent and experienced members.
• Credit institutions and insurance undertakings must establish sound and efficient corporate governance systems that contain clear organisational structures, internal audit systems, and effective risk management processes.
• Public interest undertakings must conduct statutory audits according to international auditing standards.

Conclusion

The introduction of the annual management report is a significant step forward in enhancing corporate governance practices in Greece. The reforms aim to promote transparency, accountability, and best practices among listed companies and public interest undertakings, restoring investor confidence and enhancing competitiveness. As the Greek economy continues to evolve, these reforms will play a crucial role in shaping its future success.