ArticlesElection of the Board of Directors and Alternate Members

December 12, 2022by Stavros Koumentakis

In our previous article, we looked into the Board of Directors of the SA. Specifically: their operation, authority, members and term of office. However, as its members are not elected only by the General Assembly, interesting issues arise regarding the manner of their election. In the present article we will explore the rule (:election by the General Assembly). In the next article we will explore its exceptions.


The election of the Board of Directors from the G.A.

The rule

As mentioned in the introduction, the members of the Board of Directors are elected (: rule) by the General Assembly – subject to a different regulation in the law, (art. 78 §1, Law 4548/2018 – Memorandum to Law 4548/2018 on Art. 78). We find a similar provision in the provisions concerning the exclusive competence of the General Assembly (art. 117 §1, para. b). The principle of autonomy and self-governance of the SA is served through the election of the BoD by the General Assembly. Its owners (shareholders) have a say and participate in the management of the latter.

The relative competence of the General Assembly cannot be delegated (neither by the General Assembly or the statute) to another body of the SA or a third party. The General Assembly takes the decision to elect the Board of Directors with a simple quorum and majority (art. 130 §1 and 132 §2, respectively). Subject, of course, to the fact that the statute does not require, in this case, greater quorum and majority rates (art. 130 §5 and 132 §3, respectively). It is possible, however, for the statute to require unanimity.

The Exceptions

The rule of electing the board by the General Assembly, however, is not without exceptions. The exceptions established by law (for which see our next article)- are summarized in the following: (a) In the appointment of the first Board of Directors in the initial statute of the SA (art. 78 130 §2). (b) In the direct appointment of a member/members of the Board of Directors by a shareholder (art. 79). (c) In the election of members by the Board of Directors, in case of an incomplete Board of Directors (art. 82 130 §1). (d) In the appointment of a (temporary) Board of Directors pursuant to a court decision (art. 69 of the Civil Code).


Election of the Board of Directors based on lists

In General

The election of the Board of Directors by the General Assembly usually takes place on the basis of the majority system: those who receive the most votes are elected. However, another way of election is also provided for (art. 80 §1): the possibility, specifically, of electing members of the Board of Directors based on lists (: ballots). This is a possibility that was introduced in 2007 (law 3604/2007) in order to remove previous doubts set forth by the legal theory.

In the context of the specific system, it is provided that, subject to a relevant statutory provision, the candidates for election as members of the Board of Directors are proposed to the General Assembly based on lists. The General Assembly elects from among them as members of the Board of Directors according to the proportion of the votes received by each list (art. 80 §1 paragraph a’).

Through this regulation, the proportional election system by the General Assembly is introduced. As a result, there is a more proportional representation of the shareholders in the management of the SA; with a particular interest, of course, for the minorities. Proportional representation in the management of the SA carries, however, risks for the possibility of decision-making by the Board of Directors. Especially for those that (on the basis of a statutory provision or the law) require an increased quorum and majority. The members of the Board of Directors coming from the minority shareholders will be entitled (and it is probable), in this case, that they will vote against.

It is argued (and rightly so) that proportional and majority systems can coexist: a certain number of board members can be elected on the basis of the majority system and the remaining on the basis of lists.


(a) Statutory Provision: As we have already mentioned, the election based on lists requires a relevant statutory provision (: positive prerequisite).

The articles of association, however, should specify the procedure to be followed for the election of the members of the Board of Directors based on lists, in order to avoid any disputes. Election methods using list election vary. In fact, it is possible to have only one list. The need for detail concerns (in particular) the way seats are allocated.

Depending on the relevant statutory provisions, from each list are elected: either the persons who received the most votes or those who precede in the order of the list. The rest are considered alternates (art. 80 §1, ed. c and d), who are considered, by law, as substitute members (art. 81 §1, ed. b).

Such a statutory provision may be provided for in the initial statute of the SA. However, it can be introduced and/or abolished by decision of the General Assembly. The relevant decision is taken by a simple quorum and majority, unless the articles of association require higher percentages (art. 80 §1 in fine).

(b) Absence of Statutory Provision for Direct Appointment: In order for the election of Board members to take place on the basis of lists, the absence of a statutory provision for the direct appointment of a Board member/members by a shareholder is assumed (: negative condition) (art. 80 §2). This seems reasonable, as (: Memorandum to law 4548/2018 on art. 80) the two possibilities serve the same purpose: the representation of the minority on the Board.


Alternate Members

Definitive Replacement

In addition to the (in any way elected) members of the Board of Directors, any substitutes may be called upon to play an important role. As such are meant those that are (basically) elected or appointed with the purpose of replacing a member/members in the event of their loss of status.

The possibility of electing or appointing substitute members (art. 81) is intended to deal with the case of a “stump”, as it is called, of the Board. By extension, to prevent legal action for the appointment of a temporary administration (69 CC) , which must be opted for in exceptional cases only. Indeed, given the relevant legislative provision, a corresponding statutory provision is not required (Memorandum to law 4548/2018 on art. 81).

The person who elects or appoints the Board of Directors (or its members) may also elect or appoint substitute members in the event of the resignation or death of the persons elected or appointed by them; also those who, for any other reason, have lost their status of member case of election of members of the Board of Directors based on lists (art. 80), the runners-up are considered as alternate members.

Contrary to the previous regime, the relative possibility of replacement is provided in all cases of election or appointment of the Board of Directors (Memorandum to law 4548/2018 on art. 81). Therefore: not only in case of election by the General Assembly. In turn, the alternate members: (a) will either be elected by the General Assembly and designated in the election decision of the Board of Directors, (b) or will be notified to the SA together with the member appointed, directly, by a shareholder, (c) or the runners-up will be considered as such, in case of election based on lists.

Appointment of substitute members is not, however, possible to take place (as accepted) in the original statute of the SA.

The election or appointment of an alternate member may concern the replacement of a specific member or any of them – depending, of course, on the act of election or appointment of the alternate members. If no relevant reference is made, any replacement may occur for any existing member.

Furthermore, it is required that the appointment of substitute members be published (art. 81 §1 in fine).

Temporary Replacement Due to Conflict of Interests

The replacement of a member of the Board of Directors takes place for the remainder of their term. Any replacement cannot take place due to the temporary unavailability of an existing member.

A deviation from the above, by virtue of a more specific regulation, is introduced in the case of a conflict of interests of a member of the Board of Directors with those of the SA (art. 97 & 81 §2). A necessary condition is that this is provided for in the deed of election or appointment of the substitute member. As expressly stated, in this case the replacement is temporary and concerns the acts for which the conflict exists.

Presence of Substitute Members at Board Meetings

The law provides (art. 81 §3) the possibility of representation of the substitute members at the meetings of the Board of Directors – before they replace a (regular) member. This option is considered necessary, in order for the substitute members to be informed about corporate issues; to be able, consequently, to assume their duties, in case there is a reason for replacement.

In the said meetings, the substitute members do not have the right to vote nor is it necessary for them to be invited to the meetings (Memorandum to law 4548/2018 on art. 81). It is, however, possible for them to take the floor and express their opinion – at the discretion of the president. It is also possible for them to represent another member of the Board of Directors at the meetings (art. 92 §4).


It is common knowledge that (most of the time) the members of the board of an SA are elected by its General Assembly. The latter elects the members of the Board either on the basis of individual nominations or nominations included in lists-ballots. The latter would be a beneficial option for the minority shareholders, but problematic (and therefore is avoided) for the majority. However, the selection of alternate members of the Board of Directors is optimal in order to deal with (potentially) problematic situations (e.g. incomplete composition of the Board of Directors or conflict of interests of its members). Eligible, also, in some cases (and not unusual, and sometimes, in fact, necessary) is the election/appointment of members of the Board of Directors-outside the General Assembly. About them, however, see our next article.-

Stavros Koumentakis
Managing Partner


P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 11th, 2022).


Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

Stavros Koumentakis
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(+30) 2310 27 80 84

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