Derogations from the Corporate Governance Code
In accordance with Article 2 of Law 3873/2010, the Board of Directors declares that the Company complies with the provisions of the U.K. Code on Corporate Governance save for the following derogations:
1. Composition of the Board (Code Provision B.1.1.)
The Company did not implement the practice referred to in Code Provision B.1.1, whereby independent members of the Board of Directors should not serve for more than 9 years from the date they were first elected. As explained in detail in the paragraph relating to the independent members of the Board of Directors in Section III of this Statement, two of the Board’s independent members elected by the General Meeting on 18 May 2010 with a tenure until the Ordinary General Meeting of 2013, do meet the independence conditions laid down in Article 3(1) of Law 3016/2002, but are currently in their twelfth year on the Board of Directors, since they were first elected as members of the Board of Directors by the General Meeting of Shareholders in 2001. However, and despite their long tenure in the Board, both the aforementioned directors retain absolute independence in their way of thinking, character and judgment and, as a result, the Board of Directors believes that they are indeed independent members. Notwithstanding the above, it should be noted that the Board of Directors has resolved that starting from the election of the next Board by the forthcoming Ordinary Meeting of Shareholders which will take place on June 14 2013, the independent, non-executive Board members will not be able to serve for more than three terms in office (or a maximum of nine years). As a result of the above, three of Board’s independent members, namely Messrs. George David, Panagiotis Marinopoulos and Spyridon Theodoropoulos will not be candidates for re-election.
2. Commitment of Non-Executive Directors (Code Provision B.3.2).
The official letter sent to the independent non-executive members of the Board of Directors after their election by the General Meeting on 18 May 2010 did not set out their expected time commitment for their performance of their duties (Code Provision B.3.2). It was not considered necessary to make an express reference to this because, to date, non-executive members have always devoted the necessary time in order to perform their duties. Hereinafter, the Company intends to apply the practice referred to in Code Provision B.3.2.
3. Board evaluation by external facilitator (Code Provision B.6.2)
The Board of Directors does not assign the evaluation of the Board to an external facilitator every three years. The Board is of the view that the applied procedure for the evaluation of the Board’s performance by its members and the self-assessment of the individual performance of each member is highly effective and contributes substantially to the identification of malfunctions and failures and to the improvement of the performance of the Board of Directors and its members.
4. Re-election of Board members (Code Provision B.7.1.)
The principle referred to in Code Provision B.7.1 which requires that all Board members of FTSE 350 companies and all non-executive members who have served for more than nine years should be subject to annual re-election by the General Meeting is not applied.
The main reason for this derogation is that the Company’s Articles of Association provide that all members of the Board of Directors are elected by the General Meeting to serve for a three-year term in office. It should be also noted that the Greek law allows the Board members to be elected for tenure up to six years.
Moreover, the Greek Law (article 39 of Law 2190/1920) provides that shareholders representing 1/20 of the paid-up share capital are entitled to request the entering on the agenda of a General Meeting already convened of additional items, including, therefore, the election of a new Board of Directors. For the taking of a relevant resolution, it is required the ordinary quorum of 1/5 of the paid up share capital and absolute majority of the votes represented at the General Meeting.
It should be further pointed out that according to the law and the articles of association of the Company, in case a member of the Board is elected by the Board of Directors to replace another member who resigned, passed away or was removed from office on other grounds, that decision must be submitted to the next General Meeting and that said General Meeting is entitled to vote against the person elected and have this person replaced with another. The same as above is the case if the BoD elects another member to replace an independent member who had resigned or passed away. In addition to that, if the member resigned, passed away or removed on other grounds was independent, the member elected in the position of the aforementioned person must also be independent.
Moreover, the Board of Directors decides each year whether the independent members of the Board elected by the General Meeting meet all the independence criteria laid down by Greek law, the Code and the Company, and inserts a statement to that effect into its Corporate Governance Statement.
5. Remuneration of Board members.
Although the provisions of the Code do not require detailed information about the individual remuneration paid to each member of the Board of Directors, nor is it mandatory under the relevant Greek legislation on Societes Anonyme, in the paragraph entitled “Remuneration of Board of Directors members”, the Company has set out information relating to the remuneration paid to members of the Board of Directors and its Committees in 2012 after preliminary approval given by the General Meeting on 8 June 2012, and has also provided information about the total remuneration paid to executive members of the Board of Directors. The Company has also set out information relating to the remuneration received by two executive members of the Board of Directors of the Company for their participation as independent directors in the Board of Directors of other companies listed in the Athens.