ArticlesThe Board of Directors of the SA: Operation, Authority, Members

December 6, 2022by Stavros Koumentakis

One of the most important bodies of the SA is its Board of Directors. It is the body through which exercises the management and representation of the SA; through which the SA expresses its will and manifests its action both internally and to the outside world. The important role of the Board of Directors, as well as issues regarding its members and their term of office will be the approached in the present article.


The Role of the Board of Directors – The Management Task

As expressly provided for in the law on SAs (law. 4548/2018), the company is managed by the BoD (art. 77 §1, section a’, law 4548/2018). The administration of the SA includes: (a) management and (b) its judicial and extrajudicial representation (art. 77 §1 sec. b’).

The law, therefore, generates a range of powers (and responsibility) of the BoD, which are distinguished from the corresponding ones of the General Assembly. The latter, moreover, is the one that decides on structural changes concerning the SA.

The SA acts through its BoD. Its existence therefore becomes mandatory. This obligation does not mean, however, that in case the Board of Directors disappears (e.g. due to the resignation of its members) the SA ceases to exist. Its existence, in this case, is not disputed. It is necessary, however, to ensure its operation through the election of a new Board of Directors by the General Assembly or the judicial appointment of its temporary administration (69 Civil Code).

The obligation of the BoD for exercising management is not limited to the management and representation of the SA. It generally includes all actions of administration. In this context: the determination-coordination of the business policy and strategy and ensuring its compliance. Although the law on SAs adheres to the traditional way of governing the SA through the Board of Directors, it also provides for its (potential) substitute: the “executive committee” (art. 87 §4). The latter, once its appointment is chosen, can make decisions for the daily administration of the SA; the rest of the Board of Directors will, in this case, exercise supervisory duties (see Explanatory Report of law 4548/2018 on the 6th section).

A question arises regarding the content of the corporate interest at the promotion of which the Board of Directors should aim, while exercising the duty of administration. In one view, the corporate interest of the SA is identified with the aspirations of its shareholders for the long-term profitability of the SA and, by extension, an increase in the shareholding value (: monist theory). On the other hand, not only the interests of the shareholders should be taken into account, but also those of e.g. the SA workers and even the environment (: pluralist theory). In any case, however, and through the serving of such interests by the Board of Directors, for example of the interests of the employees, the interests of the shareholders are served in the end.


Legal Relationship Between Board Members & SA

The members of the Board of Directors are linked by a legal relationship (: organic) with the SA. This legal relationship may or may not be in exchange for a numeration.

It is possible that a member of the Board of Directors provides the SA, in addition, with services that go beyond the narrow limits of its administration. These services are provided in the context of a “special relationship” (art. 109 §3). The specific, special, relationship can include, indicatively, the type of employment contract, project, independent services or mandate (e.g. a member of the Board of Directors provides, at the same time, legal or accounting services to the SA).


Principle Of Autonomy

The members of the Board act independently. Therefore, they are not subject to instructions and orders, e.g. of the General Assembly or the majority shareholder of the SA. The only obligation of the members of the Board of Directors towards the shareholders (in the context, mainly, of the General Assembly) is the obligation of provision of information (: art. 141).

The members of the BoD have (against the SA – only) an obligation of loyalty and diligence when fulfilling their duties – in the context of the organic relationship between them (and this regardless of any underlying relationship – e.g., contract of mandate or of independent services).

Except in the case where the BoD itself requests it, no consent/approval of the GA is required in the making of management decisions by the BoD. Statutory clauses for approval of the decisions of the Board by the General Assembly will therefore be void. However, the possibility of the latter to elect, at any time, a new Board of Directors, undoubtedly works in the direction of the compliance of its members with the directions (formal or informal, explicit or implicit) of the majority shareholders.

Finally, it should be noted that, even more so, not even the Board of Directors of a subsidiary company is obliged to carry out the orders of the parent company (regardless, of course, that in practice it will be aligned with its orders).


Management Authority: Content, Scope & Responsibility


The Board of Directors is competent to decide on every act concerning the administration of the SA, the management of its property and, in general, the pursuit of its corporate objectives (art. 86).


The Authority of the Board of Directors is limited: the Board of Directors does not have the right to carry out actions in excess of the corporate objectives as well as actions that are prohibited by the articles of association or contrary to decisions of the General Assembly. It is, however, possible to further limit its authority by the statute or by decisions of the General Assembly.


Any actions in excess of the management authority of a member of the Board of Directors gives rise to an obligation to compensate. However, the relevant act is evaluated as valid and carries legal consequences, as long as the potential third party is in good faith.


Representation: Content, Scope & Liabilities


The Board of Directors, as a collective body of the SA, represents the latter judicially and extrajudicially. Exceptions are found in special cases – e.g.: (a) at the stage of establishment of the SA (: when neither a legal entity exists nor, much less, a BoD), (b) at the stage of liquidation (: when representatives are the liquidators), (c) at the stage of bankruptcy (when the liquidator acts as a representative).

In the context of the out-of-court representation of the SA by the BoD fall the execution of legal transactions and the conclusion of contracts with third parties. Also, the acts of a corporate nature towards the shareholders (e.g. the approval of the transfer of reserved shares).

In the context of legal representation, the Board of Directors represents the SA legally, as the SA, as a legal entity, has the capacity to be a party and appear before any court.


The scope of the board’s representation authority is unlimited: the SA is bound to bona fide third parties (who did not know or could not have known of the relevant excess of exercise of power) – even if the board acts beyond the corporate objectives.

The extent of the power of representation of the Board of Directors is (also) unlimited: Any limitations of it by the statute or the General Assembly cannot be opposed against third parties (art. 86 §3). Even if these have been made public.

Limitations, however, on the Authority of the Board of Directors may be set by law. Such cases constitute the transactions of the SA with members of the Board of Directors (art. 99 et seq.). Also, the cases in which the function of representation is exercised by the Board of Directors, but the consent of the General Assembly is required (e.g. transactions with related parties – art. 100 §3).


The consequences and actions of the members of the Board of Directors are attributed to the SA itself. Liability, therefore, arises at the expense of the latter for (unjust, mainly) actions or omissions of the members of the Board of Directors (art. 71 CC). It gives rise, however, at the same time, on the joint responsibility of the guilty persons.


Principle Of Collective Action

The Board of Directors when exercising its powers but taking its decisions (art. 92 par. 2) acts, in principle, collectively (art. 77 §2 sub. b’). It is therefore important that the members of the Board of Directors participate in the collective proceedings. On the contrary, it is not required that all members participate in every act of representation.

Permissible, however, are specific statutory deviations, such as e.g. the assignment of representation for one or more issues to specific, only, members or member of the Board of Directors. Also, the sovereignty of the president’s vote in the event of a tie (art. 92 par. 2 sec. b’). As well as the appointment of a substitute body, which acts in parallel with the Board of Directors (art. 87).


The Members of the Board of Directors; In particular

Election & Possibility of Re-election

The methods of electing the members (shareholders or non-shareholders) of the BoD are expressly provided for in the law (art. 77 §2 section a’, with reference to art. 78-80). Specifically, these methods include: (a) election by the General Assembly (art. 78), (b) direct appointment by a shareholder (art. 79) and (c) election based on lists (art. 80).

The members of the Board of Directors remain, at all times, eligible for re-election (even before the expiry of their term – article 77, §2, section b’). In this way, the need – often – for unity and continuity in the administration of the SA is met. Any statutory clause prohibiting re-election will be considered invalid (art. 77 §2 section b’).

The Free Revocation

The members of the Board of Directors can be revoked freely – at any time (art. 77 §2 sec. b’). Their tenure, therefore, is always subject to their recall.

Revocation takes place, basically, by decision of the General Assembly (by simple quorum and majority). If, however, a member was appointed by direct appointment, by the shareholder who appointed them (or they were appointed judicially, if 1/10 of the paid-up share capital made such a request and there is a great reason).

The revocation of the members of the Board of Directors-consultants usually expresses the lack of confidence in them or, in general, the disapproval of the management they exercise. Statutory clauses that remove or limit the right of revocation are void.

The act of revocation is subject to (declarative) publicity.


The number of members of the Board of Directors is determined by the articles of association. Alternatively by the General Assembly, within the limits provided by the articles of association. However, it cannot (art. 77 §3) be less than three (3) or exceed fifteen (15) members. Failure to comply with these limits renders the composition of the Board of Directors illegal.

A Legal Entity as a Board Member

As long as there is an express statutory provision, it is possible for any legal entity to become a member of a Board of Directors. (art. 77 §4).

The legal entity-member is obliged, within 15 days from its designation as a member of the Board, to indicate, a natural person as its representative. The latter will exercise all the responsibilities with which the member of the Board of Directors is charged. The natural person in question is revoked/replaced at any time by the legal person-member. However both the legal entity and its representative have full liability vis-à-vis SA in terms of corporate management operations.

The Tenure

The status of a member of the Board is related to the duration its his term – unless the member resigns (expressly or implicitly) before its expiration. The term of office is determined, in particular, by the statute and cannot, in any case, exceed six years. In the event that the election or appointment is made for a longer period, then they apply for a maximum of six years (art. 85 §1 sec. a’ & b’). A minimum term, however, is not foreseen – it is not common, however, for it to fall short of a year.

It is within the competence of the General Assembly to specify the term of office, since the statutes simply set its limits (e.g. “between one and five years”). As an exception, in fact, it can elect a Board of Directors with a shorter (statutory) term. However, if both the statute and the General Assembly do not address its duration, it is assumed that the term of office of the members is six years.

A legal extension of the term of office of the BoD – the duration of which has expired – is provided for, until a decision is taken to elect a new one in the context of the regular General Assembly of Art. 119 (art. 85 §1 ed. c΄). In this way, phenomena of the SA’s lack of governance are avoided.

It is, however, possible that there is a provision for extending the term of office of the Board either in the statute or in the decision of the General Assembly for the election of the Board. Implied extension is not accepted.

Finally, it is allowed, by law, to make a decision – optional or statutory mandatory – on behalf of the General Assembly for partial renewal of the members of the Board of Directors. Also, the provision of differentiated, among the members, expiry times of their term of office (: staggered BoD) – under the terms of the law (art. 85 §2).


The SA’s Board of Directors is not its most powerful body (the power of the General Assembly always prevails), but it is the most important one. And this is because the Board of Directors is responsible for the internal management and external bounding and representation of the SA. It is the one to which every failure will be attributed (but also every success will be credited) in the effort to fulfill the corporate objectives and serve the interest of the shareholders. The BoD is a collective body (and is treated as such by the law and the statutes of the SA), but in practice one or, at best, only a few of its members are responsible for the day-to-day management of the SA. In this context (according to Thucydides, Historiai, 2.65.9): “Thus the state was ostensibly a democracy, while in reality it was ruled by one citizen”. And so happens in the SA. And rightly so. The rules, however, are there. Their compliance is supervised and their circumvention (even if it is deliberate) is controlled. And rightly so.

However, the interesting issues of the election of the members of the Board of Directors will concern us in our next article.-

Stavros Koumentakis
Managing Partner


P.S. A brief version of this article has been published in MAKEDONIA Newspaper (December 4th, 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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