Responsibilities of the Board of Directors

The proper functioning of a Société Anonyme (S.A.) depends on the cooperation between its two principal corporate bodies: the Board of Directors (BoD) and the General Meeting of Shareholders (General Meeting).

The BoD -and respectively the sole director -single managing director, where such structure is provided for- constitutes the administrative and representative body of the SA.

According to Greek Law 4548/2018 on sociétés anonymes, the principal responsibility of the BoD is to decide on every act relating to the management of the company, the administration of its assets, and the pursuit of its corporate purpose, always taking into account the nature of the business and the company’s purpose as defined in its articles of association.

More specifically, with regard to the representative authority of the BoD, such authority is unlimited. Consequently, acts performed by the BoD bind the company vis-à-vis third parties even if they fall outside the company’s corporate purpose, unless the third parties were aware of the excess of corporate purpose or, under the circumstances, could not reasonably have been unaware thereof.

As regards its internal managerial authority, the BoD must comply with any restrictions imposed by the articles of association or by a lawful resolution of the General Meeting and may not carry out acts prohibited thereby. Such restrictions, however, may not be invoked against third parties, even if they have been published or are known to them.

Members of the BoD are obliged to manage the company’s affairs in a manner that promotes the corporate interest, supervise the implementation of resolutions of both the BoD and the GM, and inform the remaining members of the BoD accordingly. Furthermore, members of the BoD are subject by law to duties of loyalty and non-competition, as specifically provided for under the law and any special provisions of the company’s articles of association.

Power of the General Meeting on management matters

Based on the combination of several provisions of Law 4548/2018, legal doctrine accepts that the GM may intervene, either positively or negatively, in management matters, provided that such intervention does not lead to usurpation or deprivation of the powers of the BoD.

In this context, the articles of association may require the approval or consent of the GM for specific management acts and may also require the BoD to inform the GM, as a collective body or a specific shareholder. It is further accepted that the GM may intervene in the management of the company in matters involving risks for the company and potentially substantial effects on shareholders’ rights (e.g. transfer of profits between parent and subsidiary companies, transfer of a significant company asset or business branch). Greater level of such intervention is generally recognised in non-listed companies in comparison to listed SAs.

Internal liability of BoD members

Liability of BoD members is divided into two categories, internal and external.

Members of the BoD are liable towards the company itself (internal liability) for any damage it suffers due to act or omission of the member that consists breach of duties.

More specifically, the main prerequisites for establishing liability are, in summary: (a) breach of an obligation (e.g. duty of loyalty) incumbent upon the member in relation to his/her duties as defined by law and the articles of association, (b) fault, (c) damage to the company, and (d) causal link between the unlawful conduct of the member and the damage suffered.

In case such liability is established, the so-called ‘corporate lawsuit’ shall be filed by the company itself against the Board member.

The above liability shall not arise if the member of the BoD proves that, in the performance of his/her duties, he/she exercised the diligence of a prudent businessperson acting under similar circumstances, as well as in case of acts or omissions which are based on a lawful resolution of the GM or concern a reasonable business decision taken (a) in good faith, (b) on the basis of sufficient information appropriate under the relevant circumstances, and (c) exclusively in the interest of the company.

It is underlined that a BoD member is not liable towards shareholders for indirect loss caused to the value of their shares due to improper management. However, the member may be liable towards shareholders under the tort provisions in the event that direct damage has been caused to the shareholders directly.

External liability of BoD members

External liability, namely liability towards shareholders and third parties (creditors, employees, etc.), is in principle governed by the provisions of Greek Civil Code (GCC), complemented by special provisions that may govern specific matters.

Pursuant to the general rule of Article 71 of the Civil Code, the legal person is liable for the acts or omissions of the bodies representing it, provided that the act or omission occurred in the course of the performance of the duties entrusted to them and gives rise to an obligation to compensate. The liable person shall be also jointly and severally liable. In other words, whilst the directors of the SA do not have a personal liability for the company’s debts, they may nevertheless be held personally liable where they are at fault for a tort under Article 914 GCC.

There also legal provisions introducing personal joint and several liability of a company’s legal representatives in respect of specific obligations of the company. Thus, personal joint and several liability is typically provided for in relation to tax and social security obligations.

It should be emphasised that criminal liability may also arise for a Board member for acts and omissions during his/her term of office, pursuant to the relevant each time provisions of criminal law.

Joint and several liability for tax debts

Joint and several liability for tax debts owed to the State has, from time to time, been a matter of debate, due to cases where debts -often of significant height- were sought even many years later from individuals who happened to have held a managerial position in a company. However, under current legislation, this liability has now been specified and substantially limited, being contingent, on the one hand, on holding a position of responsibility and exercising substantive management at the relevant time and, on the other hand, on the existence of fault.

Thus, personal joint and several liability for the payment of income tax, withholding taxes, VAT and ENFIA owed by the company, as well as of interest, fines, surcharges and administrative financial penalties, lies with persons who are executive chairmen, directors, general managers, managers, managing directors, authorised representatives and liquidators of the company, as well as those persons who de facto exercise control or management of the company, regardless of when they were assessed, provided, however, that the following conditions are cumulatively met: (a) they held the aforementioned position either during the company’s operation, or at the time of its dissolution, winding-up or merger, or during the liquidation; (b) the debts became due and payable during their term of office; (c) the debts were not paid or settled through their own fault, the absence of which must be proven by the jointly and severally liable person themselves, in accordance with the specific provisions laid down by law (Article 49 of the Tax Procedure Code).

Indeed, even under the existing legislative framework, as recognised by the courts, “the provisions on joint and several liability, in so far as they constitute an exception to the principle of the legal independence of a legal entity and to the general rule that each person is liable for their own debts and not those of others …, while entailing serious encroachments on property rights and significant restrictions on the economic freedom of persons who are personally and jointly liable, are, by their very nature, to be interpreted narrowly …”. In this context, in the recent decision No. 2482/2025 of the Council of State, it was held that, since the Chairman of the Board of Directors of a SA was not included among the persons exhaustively listed in the relevant provision as being jointly and severally liable, holding that position per se does not entail such personal and joint and several liability.

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