Corporate governance refers to a number of principles adopted by a company, aiming to uphold its performance and the interests of its shareholders and all stakeholders. Recognizing the importance of corporate governance principles and the benefits derived from their adoption, OTE follows international practice and standards in this area and opts for the systematic implementation of these principles throughout its operations.
More precisely, as a large capitalization company, listed on the Athens, New York and London Stock Exchanges, OTE complies with applicable domestic and international corporate governance legislation, incorporating regulations and compliance practices within its operations. At the same time, aiming to uphold transparency, efficient management and optimal operational performance, OTE follows practices which are not required by law but allow for company’s adherence to best practices.
All relevant provisions and practices are incorporated in the company’s Articles of Incorporartion, Internal Operations Regulation, the Code of Business Conduct and Ethics, the Internal Personnel Regulation and other company by-laws regulating its operations.
Even though ΟΤΕ is also listed company in the New York Stock Exchange, the corporate governance rules, applicable to OTE as a Greek corporation, differ in many respects from the corporate governance standards applicable to domestic corporations in the United States, which have securities listed on the New York Stock Exchange ("NYSE"). Most notably, there are differences with respect to stock exchange regulation, concerning the proportion of directors who have to be independent and the role, structure, composition and organization of the committees of the board of directors.
Differences in the Corporate Governance framework of Greece and U.S.A.
NYSE corporate governance rules require a majority of directors to be independent. According to Law 3016/2002, at least one-third of the directors must be non-executive and of these at least two must be independent. Of the ten members of OTE's current board, four are independent. Independence of directors in Greece is supervised by the Capital Markets Commission, which may impose sanctions in cases of violations of applicable law.
According to the NYSE corporate governance rules, listed companies must adopt and disclose corporate governance guidelines relating to director qualifications standards, responsibilities, access to management, compensation and various other matters. There are no similar requirements applicable to OTE and we have not adopted guidelines of this nature.
NYSE corporate governance rules stipulate that non-management directors must meet at regularly scheduled meetings without management being present. There are no similar requirements applicable to OTE and our non-management directors do not ordinarily hold separate meetings.
Other differences are summarized as follows:
OTE's Board of Directors has created an Audit Committee, which complies with U.S. laws and NYSE rules applicable to foreign private issuers.
Fundamental Principles of OTE's Corporate Governance System
The fundamental principles of OTE’s corporate governance system involve the following:
OTE applies corporate governance regulations and practices on the basis of three key priorities which include the definition of the role of the Board of Directors, the executive members and the control, the protection of shareholder rights, and the enhancement of transparency and information disclosure.
Corporate Governance in OTE
