GREECE Law and Practice Contributed by: Stathis Orfanoudakis, Theodore Konstantakopoulos and Yolanda Antoniou-Rapti, Zepos & Yannopoulos
11.3 Board’s Role The board is usually expected to be actively involved in the negotiations for a proposed transaction, as it constitutes the principal man- agement body of the company and is entrusted with deciding on any act concerning the admin- istration of the company, the management of its property and the general pursuit of its purpose, as well as representing the company judicially and extra-judicially. The foregoing is subject to the caveat of the neutrality obligation imposed on the board of directors in the context of takeo- ver bids. Shareholder litigation challenging the board’s decision to pursue an M&A transaction is not very common in Greece. Greek courts tend to side with the recommendations of the board in such cases, provided the directors have shown – in the performance of their duties – the diligence of a prudent businessperson operating in similar circumstances (business judgement rule), which is also the standard for limiting any related liabil- ity of the directors. Prior to entering into an M&A transaction, bid- ders should ideally do some preparatory work and obtain information on the target company’s shareholders, as well as any previous cases of shareholder activism. 11.4 Independent Outside Advice Directors are generally supported by a wide range of advisers in connection with takeover and/or business combinations. These can indic- atively include financial, legal, tax and technical advisers engaged during different stages of the transaction, depending on the specific needs and complexities of each case. Greek Law 4601/2019 on corporate transforma- tions provides that, in the case of merger, the
or interests of their close family that may arise from the company’s transactions and fall within their duties; and (c) refrain from voting on issues with a po- tential or factual conflict of interests. • Duty of confidentiality – the obligation to keep confidential information and matters of the company that were made known to them in view of their capacity as board members. • Non-compete obligation – the obligation to: (a) not engage in acts that are considered competitive to the company’s operation (ie, acts that fall within the company’s purpose and are proceeded for the mem- ber’s or a third party’s interests are forbid- den), unless special permission has been granted by the general meeting; and (b) not participate as partners in general or limited partnerships or as sole sharehold- ers/partners in companies with the same purpose, unless special permission has been granted by the general meeting or a relevant provision exists in the company’s articles of association. See 9.1 Technology Company Due Diligence in relation to the board of directors’ neutrality obligation in the case of tender offers. 11.2 Special or Ad Hoc Committees The establishment of special or ad hoc com- mittees in business combinations by the board of directors is not very common in the Greek market – although there have been instances of companies deploying such a strategy (especially larger listed entities). As noted under 11.1 Princi- pal Directors’ Duties , under Greek law there is in any case a requirement for directors to disclose conflicts of interest and to refrain from voting on any such matters.
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