Greek Corporate Governance Code: A Framework for Best Practices

The Greek Corporate Governance Code (HCGC Code) serves as a non-binding guide that sets out best practices for listed companies in Greece. This code is composed of 16 principles, organized into five pillars:

Pillar 1: Board of Directors’ Responsibilities and Composition

• The board of directors plays a crucial role in overseeing the company’s strategy, supervising executive directors, and providing their views on proposals.
• The Corporate Governance Law establishes a distinction between executive and non-executive directors, with independent directors having specific responsibilities.

Pillar 2: Executive Compensation System

• The HCGC Code recommends that executive compensation be disclosed and transparent, with clear performance targets and vesting periods.
• This approach ensures accountability and fairness in the remuneration process.

Pillar 3: Audit Committee’s Duties

• The audit committee is responsible for reviewing the company’s financial statements, internal controls, and risk management processes.
• Their role is to ensure transparency and accuracy in financial reporting.

Pillar 4: Transparency and Disclosure

• Shareholders should have access to timely and accurate information about the company’s activities and financial performance.
• This includes regular updates on corporate governance practices and executive compensation.

Pillar 5: Shareholder Rights

• Shareholders should be able to participate in decision-making processes, such as electing directors and approving major transactions.
• The HCGC Code emphasizes the importance of shareholder involvement in corporate governance.

Key Recommendations from the HCGC Code

• Board composition: Boards should consist of at least seven members, with a majority being non-executive directors.
• Independent directors: Independent directors should make up at least one-third of the board and meet specific independence criteria.
• Executive compensation: Executive compensation should be disclosed and transparent, with clear performance targets and vesting periods.
• Shareholder rights: Shareholders should have access to timely and accurate information about the company’s activities and financial performance.

By following these best practices outlined in the HCGC Code, listed companies in Greece can improve their corporate governance and ultimately benefit from increased transparency, accountability, and fairness.