Corporate Governance

Effective corporate governance is one of the key elements of a healthy organisation. It sets the tone as to how the organisation operates and behaves both internally and with regard to the markets in general. It defines the relationship, which the board and management have with the organisation as a whole.

Since 2000 the Hellenic Capital Market Commission strengthened the administrative and functional framework of all incorporative firms listed in the Stock Market of Greece. These new regulations (which can be viewed below via the pdf files) aim to determine the responsibilities and obligations of all listed companies in order to ensure transparency of transactions, safeguard shareholders as well as its proper running and organisation according to the basic principles of corporate governance.

Please note that the content of the pdf files is in the Greek language

• Decision of Internal Audit Regulation No. 5-204 (14/11/2002)
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• Circulation No. 9
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• Circulation No. 10
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• Government Gazette A-2002-110 - Corporate Governance
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Meeting Three Challenges for 2006

Macroeconomic and social changes will be making a big impact on corporate governance over the next three years. In particular total Risk Management, New Accounting Standards and Value Reporting will be under close scrutiny.

A series of powerful macroeconomic trends, such as anti-globalisation movement, issues surrounding product and service safety and the Enron affair, ave made a profound impression on consumers everywhere. Even in Greece it is more than enough to mention the incidents of ETBA Financing and Connections, in relation to the general fall of the stock market, which stretches the feeling that corporate world is under an ear of insecurity and it is already having what will be a far-reaching impact on the corporate governance of companies.

Companies will need to be simultaneously managing the interests of all five of their stakeholders such as customers, employees, investors, suppliers and the community. More generally they will be answering greater expectations for sustainability, social responsibility, financial accountability and transparency from their stakeholders.To deal with this demanding situation companies should address three major challenges which all concern corporate governance in the following areas:

Total Risk Management: A necessity that will become an all-encompassing approach to risk assessment and management. A detailed framework for the comprehensive identification of all possible sources of risk and their prioritisation needs to be set up. Company executives have an enormous responsibility to protect tangible as well as intangible company assets such as the corporate brand and reputation, which form the life-blood of their organisations.

New Accounting Principles: As Europe moves forward with the adoption of IFRS (International Financial Reporting Standards), all internal accounting principles must be reviewed. This kind of switch represents both a challenge and an opportunity for companies to reconsider, clarify and simplify their accounting processes and control systems. Accounting principles should always ensure that substance takes precedence over form. The management has to adopt a competent and independent view that will spread across the organisations.

ValueReporting: A holistic approach to company reporting is a must in an integrated and inter-dependent world. Communicating corporate goals and in particular sustainable growth to all stakeholders will become a priority for top management in the future. In addition, and increasingly ethically-minded and vocal customer-employee-investor wants to be associated with a company whose values he or she approves. As Stakeholders need information that is easily accessible, understandable and current, they will put pressure on businesses to provide it.

To meet these three challenges, what is really needed is a huge dose of common sense and robust decisions for investment.

Companies should take this opportunity to revitalise their risk management, accounting principles and reporting processes with a view to facilitate the flow of information from the enterprise to all five of its stakeholders.