Council of State’s landmark judgment sets the basis for corporate governance reform


Our Firm continues its commitment to apply corporate governance rules from the right angle securing the disciplinary acquittal of a member of the board of directors (BoD) before the Council of State in a landmark judgment. It is rewarding to see our position affirmed by the Council of State in judgment no 304/2020. The Court upheld that not all BoD members can indiscriminately be held accountable, but the responsibilities of each member should be unambiguously determined in order for any breach of duty to be clearly identified. The Council of State only recently had this opportunity to bring the old corporate rules in line with the recently enacted framework, thus confirming the rationale of the legislative overhaul. The new law 4706/2020 provides for specific duties and areas of responsibility of the BoD members in addition to those already enacted by corporate law (L. 4548/2018). The provisions introduce the principle that the composition of the BoD should reflect the knowledge, skills and experience required to exercise its responsibilities in accordance with the business model and strategy of the company. For the entire judgment in Greek please click here