Liability of Members of the Board of Directors of a Greek S.A. towards the company
Article 22a of Law 2190/1920 defines the duty of trust of the Members of the Board of Directors of a Greek S.A. company towards it. This duty of trust consists of a) the general promotion of the company’s interest (“positive obligation”) and b) the omission on the part of the Board Members of any act that could be prejudicial to the interests of the company (“negative obligation”). The liability of the members of the Board of Directors against the company for poor performance of their managerial duties is provided in article 22a par. 1a, according to which every member of the Board of Directors is liable against the company for its faults. According to relevant case law, the Directors of a company are considered to be at fault if they do not show the level of care required, according to the principles of good faith, by a “prudent manager of a foreign person’s property”. The liability of Members of the Board of Directors for their acts and omissions does not require intention but may be invoked also in cases of minor or gross negligence. Apart from Board Members, the same liability exists for any other officer of the company who exercises powers by virtue of a special mandate given to him by the company.
Article 22a par. 4 of the law provides that a company that has suffered a loss by the acts or omissions according to the above provisions may decide, by virtue of a Board of Directors resolution to waive its right to claim compensation or to come to a settlement with the director/officer who is accountable for the damage, only after 2 years have passed from the generation of the claim and under the following conditions: a) that the General Meeting of the shareholders approves the waiver b) that there is no objection to the waiver by a minority part of the shareholders which is equal or greater than 1/5th of the share capital represented at the General Meeting in question. The right of the company to raise a claim is subject to a limitation period of 3 years counting from the act or omission of the Board Member/director in question. But if the act or omission of the director is malicious, the limitation period is 10 years.
According to article 22b of law 2190/1920 the claim of the company against members of the board of directors that relate to the execution of this managerial duties is mandatorily raised if this is resolved by a General Meeting resolution (in ordinary majority) or if it is so requested by shareholders representing the 1/10th of the share capital to the board of directors or the liquidators of the company. As provided above, similarly, in the case of a malicious act of a director, these numerical thresholds are not required.