Reforming the corporate governance in Greece: After the introduction of Law 4706/2020

Abstract

Good corporate governance undoubtedly is a key to sustainable private sector development and a basic element for healthy firms (Kostyuk, Braendle, & Capizzi, 2018). However, in Greece, the relevant legal framework was until recently anachronistic, whilst recent scandals in the Greek capital market revealed the regulatory gaps in the internal and external control mechanisms applied by listed companies and exacerbated the need for a significant reform in the corporate governance legal framework in force. The purpose of this article is to enrich the literature in this area and to present an overview of the state of corporate governance in Greece and particularly the innovations introduced by the new Law 4706/2020 on corporate governance as well as the good practices recommended by the recently adopted new code. By comparing the previous and the new corporate governance laws, as well as the existing literature in the field, our paper concludes that the adaptation to the general principles of corporate governance is quite difficult for most of the traditional Greek firms which are based on family ties. Furthermore, the financial crisis, and the current COVID-19 pandemic, created a highly unfavourable and challenging economic environment for Greek firms