1. INTRODUCTION

The present Suitability Policy (hereinafter referred to as “Policy”) has been prepared by the Board of Directors of the company “KIRIACOULIS MEDITERRANEAN CRUISES SHIPPING S.A.” (hereinafter referred to as the “Company”), in order to comply with the current legislative provisions regarding “Corporate governance of public limited companies, modern capital market, incorporation into Greek law of Directive (EU) 2017/828 of the European Parliament and of the Council, measures to implement Regulation (EU) 2017/1131” and other provisions governing the content of the Board of Directors’ Suitability Policy, in accordance with article 3 of Law 4706/2020. The members of the Board of Directors fall within its scope.

The Suitability Policy aims to ensure that the Board of Directors is staffed with competent persons, who will ensure the exercise of sound and effective management for the benefit of the Company and all stakeholders and the strengthening of the effectiveness of the risk management system to which the Company is exposed from its internal operation and organization, and ensures that the members of the Board of Directors have professional qualifications, knowledge and experience that allow them to exercise a sound and consistent management and are adequate with regard to reputation and integrity.

 

2. MAIN OBJECTIVES AND PRINCIPLES OF THE POLICY SUITABILITY

The main objectives of this Policy are: a) the definition of the persons covered by it and cases where it is deemed appropriate to review the suitability of these persons and the procedures to be applied in this regard, the analysis of the criteria for the assessment of the degree of suitability of the aforementioned persons and the definition of the minimum required data – supporting documents, b) to ensure the effective operation of the Board of Directors and the fulfilment of its role as the Company’s highest management body, responsible for the development of the strategy, the supervision of the Company’s administration and sufficient control, c) the institution of transparent rules and procedures to evaluate the suitability of these persons, prior to taking over the specific post (placement), as well as on a periodical basis (assessment) and d) the distribution of responsibilities to the Company Bodies for the implementation of the Policy and minimisation of possible business risks resulting from the assignment of duties to non-suitable and credible persons.

At the same time, the main principles of this Policy are:

• It must be clear, adequately documented, governed by the principle of transparency and proportionality and comply with the Internal Operating Regulations and the Greek Corporate Governance Code applied by the Company.
• In establishing the suitability policy, the size, internal organisation, attitude to undertake risks, nature and complexity of the Company’s activities are taken into account.
• The Policy shall take into account the specific description of the responsibilities of each Board member or his or her participation or non-participation in committees, the nature of his or her duties (executive or non-executive Board member), as well as specific incompatibilities or characteristics or contractual commitments.
• The Policy is evaluated periodically or when remarkable events or changes occur.

 

3. DESIGNATION OF PERSONS AND COMPETENT BODIES INVOLVED IN THE POLICY

According to article 3 of Law 4706/2020, all members of the Board of Directors of the Company are covered by the Suitability Policy. Nevertheless, the responsibilities of the Company’s Bodies with regard to the adoption, monitoring, implementation, and amendment of the Policy are, per Body, as follows:

1. a) Board of Directors

• Adoption and periodic review of the Policy
• Selection of candidates and final approval of evaluations of persons covered by the Policy
• Working with the Remuneration and Nomination Committee to oversee the correct and appropriate implementation of the Policy
• Determine any further actions that may be appropriate to be taken following the evaluation of the members of the Board of Directors, after the Remuneration and Nomination Committee has informed the Board of Directors of the results of this evaluation

1. b) Remuneration and Nominations Committee

• Approves the Evaluation Report resulting from the completion of the evaluation and is responsible for preparing a summary report to the Board of Directors to inform it on the main points of the evaluation results and decision making.
• Monitors the appropriate implementation of any corrective actions identified following the evaluation.

 

4. PRINCIPLES FOR THE SELECTION OR REPLACEMENT OF MEMBERS OF THE BOARD OF DIRECTORS AND FOR THE RENEWAL OF THE TERM OF OFFICE OF EXISTING MEMBERS

The Board of Directors of the Company has a sufficient number of members, given the limited size and complexity of the Company’s activities. In particular, the Board of Directors, in accordance with Article 11 par. 1 of the Company’s Articles of Association consists of (3) to seven (7) members, and in particular, an executive Chairperson, a non-executive Vice Chairman, a Chief Executive Officer, who is deputy to the Chairperson in his executive duties, and (2) to (4) members.

The basic principle for the selection or replacement of a Board member is to have been employed in the industry for several consecutive years in various positions in order to gain an overall picture of the market. Also, a key factor in the selection of members is that the Board of Directors should be staffed with persons of ethics, reputation, and credibility, suitable for either executive or non-executive roles. The Company strictly selects persons on the Board who have been distinguished for their ethics and credibility and no objective and verifiable reasons have ever arisen to the contrary.

The members of the Board of Directors shall further possess the skills and experience required by the tasks they undertake and their role on the Board of Directors and/or its Committees, as well as sufficient time to perform their duties as appropriate. Given the limited size of the Company and its long history, the Board has supported the existing business for several years and understands the risks it takes. The knowledge and skills acquired through education in relevant fields, training on financial sector issues and practical experience are considered sufficient to conduct the role and duties of the position assigned to each member.

The Company’s Policy provides that in the selection, renewal of the term of office and replacement of members, consideration is given to the assessment of individual and collective suitability, as well as recognition and alignment with the Company’s culture, values, and overall strategy.

The suitability of the members of the Board of Directors shall be reviewed in accordance with the provisions of chapter 5 below and shall be reassessed in any case deemed necessary. In particular, the suitability shall be reassessed in cases where any doubt arises as to the individual suitability of a member or members of the Board of Directors or its composition, where there is a significant impact on the reputation of a member or members of the Board of Directors or of its composition, as well as in any case where an event occurs which may significantly affect the suitability of a member of the Board of Directors (e.g. the occurrence of a conflict of interest).

 

5. CRITERIA FOR ASSESSING THE SUITABILITY OF THE MEMBERS OF THE BOARD OF DIRECTORS

Α. Individual Suitability

The individual suitability of the members of the Board of Directors shall be assessed on the basis of the criteria set out in paragraphs 1 to 5 of this Chapter, which shall apply to all members of the Board of Directors, irrespective of their executive or non-executive status. Specific disqualifications, obligations and conditions required by the relevant legislation in relation to the status of the members of the Board of Directors as executive or non-executive shall apply irrespective of the suitability criteria.

 

1. Professional training, experience, adequate knowledge, and skills

 

The members of the Board of Directors must have sufficient knowledge, skills, professional training, and experience at least for the most crucial functions and activities of the Company in the performance of their duties. The term “experience” refers to both the theoretical training acquired by the members of the Board of Directors through theoretical and practical training and practical experience, either from previous positions of responsibility held or from conducting business activities, for a sufficient period of time. All members of the Board of Directors should have an understanding of the Company’s activities and key risks.

When assessing the theoretical knowledge and skills of a Board member, first of all the level and type of education or training (such as: field of study and specialisation, lifelong training) shall be taken into account. Theoretical knowledge may be related to the Company’s relevant activities or to other relevant areas of activity, at the Company’s discretion depending on the status, role, and responsibilities of each Board member. In assessing the practical and professional experience, knowledge and skills of a Board member, the previous positions and the type of employment held by the member over time (including any business activities) shall be taken into account. In this context, the overall professional development of the board member over time shall be taken into account, as well as elements such as the length of time the board member has held the position, the size of the undertaking in which he/she has been employed, the scale and complexity of the business activity, the responsibilities exercised in the business activity, the responsibility of a department and/or number of subordinates, if any, and the nature of the activities of the undertaking. It should be noted that the above assessment is not limited to the member’s academic qualifications or evidence of a specific length of service in a particular subject and role. A thorough analysis of the member’s training and experience shall be conducted by the Remuneration and Nominations Committee, given that the member may have acquired sufficient theoretical and practical experience also by virtue of his/her level of responsibility, duties, and business activity over a sufficient period of time.

The existence of the required conditions will be verified by means of detailed curricula vitae containing information on their training and professional experience and copies of diplomas and, where appropriate, professional certifications. The Company may request legally certified copies of the above.

 

2. Guarantees of ethics and reputation

 

The good reputation, honesty, ethics, and integrity of the members of the Board of Directors are criteria of exceptional importance to the Company, which the latter evaluates thoroughly. A member of the Board of Directors is presumed to possess these characteristics unless there are objective and proven reasons to the contrary.

The members of the Board of Directors must perform their duties with integrity, objectivity, and professionalism. Among other things, they should:

• have impeccable morals. A Director shall be presumed to be of impeccable moral character unless there is an indication to the contrary or there is no reason for reasonable doubt.
• not come under, themselves and/or their related persons, in cases of conflict of interest and transactions with third parties or incompatibility, in accordance with the Greek Corporate Governance Code and meet the independence criteria of the Law, provided that they are independent non-executive members of the Board of Directors.

In order to assess the reputation, honesty and integrity of a candidate or current member of the Board of Directors, the Company may conduct an investigation and, without prejudice to the legislation on the protection of personal data, request information and relevant supporting documents regarding any final administrative and judicial decisions against him/her, in particular for violations and offences related to his/her membership of the Board of Directors or to non-compliance with the provisions of the legislation of the Hellenic Capital Market Commission or, in general, to any financial crimes.

With the reservation of the provisions of Article 3 par. 4 and 5 of Law No. 4706/2020, such assessment may take into account, in particular, the relevance of the offence or measure to the role of the member, the severity of the offence or measure, the general circumstances, including mitigating factors, the role of the person involved, the sentence imposed, the stage reached in the legal proceedings and any rehabilitation measures that have been put in place. It is useful to consider the time that has elapsed and the person’s conduct since the violation or offence.

 

3. Conflict of interest

 

Conflict of interest means the realization of a member’s interests to the detriment of the Company’s interests and also in accordance with the Conflict of Interest Policy that it has established:

• sets out how conflicts of interest are identified, disclosed, limited, managed, and prevented.
• set out any circumstances and conditions under which, exceptionally, it would be acceptable for a member of the Board of Directors to have conflicting interests, provided that such interests of the member are substantially limited or subject to appropriate management.
• the Company and the Board member should disclose any conflict of interest they identify, and the Remuneration and Nomination Committee shall assess the adequacy or otherwise of these measures in order to decide on the suitability of the Board member.

The members of the Board of Directors must at all times be fully informed and comply with the conflict of interest policy applied by the Company and included in its Internal Operating Regulations.

 

 

4. Independence of judgement

 

Each member of the Board of Directors must actively participate in the meetings and make his/her own correct, objective, and independent decisions and judgments in the performance of his/her duties. “Objectivity” means an impartial attitude and mentality, which allows a Board member to perform his/her work as he/she believes it to be done and not to compromise on its quality. “‘Independence’ means freedom from circumstances that prevent a Board member from exercising impartial judgment in the performance of his or her duties. In assessing the independence of its Board members’ judgement, the Company shall take into account whether all Board members have the necessary behavioural skills, including in particular:

• the courage, conviction, and fortitude to undertake a meaningful evaluation and challenge the proposals or opinions of other Board members,
• the ability to ask reasonable questions of the members of the Board of Directors, and in particular its executive members, and to criticise them; and
• the ability to resist the phenomenon of “flock” thinking.

Independent will may be affected by conflicts of interest, but Board members should be able to take prudent, objective, and independent decisions (i.e., act with independent will).

 

5. Allocation of sufficient time for the performance of duties

 

The members of the Board of Directors must have the time necessary for the unobstructed performance of their duties. The expected time that each candidate for Board member is required to devote to his/her duties is determined by the Company according to its needs and communicated to the candidate. In determining the adequacy of the time, the capacity and responsibilities assigned to the Board member by the Company shall be taken into account, as appropriate. Board members are required to disclose the number of positions they may hold on other boards of directors and the capacities they simultaneously hold, as well as any other professional or personal commitments and circumstances to the extent that they are likely to affect the time they have available in the performance of their duties as members of the Company’s Board of Directors.

 

Β. Collective Suitability

 

Collectively, the members of the Company’s Board of Directors must be able to make appropriate decisions, considering the business model, attitude to undertake risk, strategy, and the markets in which the Company operates. In addition, the members of the Board of Directors collectively must be able to undertake meaningful monitoring and critique of the decisions of the executive members of the Board of Directors.

The areas of knowledge that need to be effective for the Company’s business activities are recommended to be covered by the Board of Directors collectively with sufficient expertise among its members. Board members should also have the necessary skills to present their views. The Board of Directors should have an adequate understanding of the areas for which the members are collectively responsible, and have the necessary skills to exercise effective management and oversight of the Company, including with respect to:

• its business activity and the main risks associated with it,
• strategic planning,
• the financial reports,
• compliance with the legislative and regulatory framework,
• an understanding of corporate governance issues,
• the ability to identify and manage risks,
• the impact of technology on its activity,
• adequate gender representation.

In particular, with regard to adequate gender representation, it should be mandatory to have twenty-five percent (25%) of the total number of members of the Board of Directors. This criterion should be taken into account by the Remuneration and Nomination Committee when making its proposals for the appointment of a new member of the Board of Directors and it is noted that in the case of a fraction, this percentage shall be rounded to the nearest whole number. The Company hereby ensures equal treatment and equal gender opportunities among the members of the Board of Directors.

 

6. PROCEDURE FOR THE ASSESSMENT OF CANDIDATES FALLING WITHIN THE POLICY AREA

 

Assessment of Members’ suitability

 

The assessment of the suitability and credibility of the candidates falling under the Policy should take place before the nomination of the new member of the Board of Directors. If, for special reasons, the assessment cannot be completed before the appointment of the member, then it should be completed as soon as possible and at the latest within six weeks of the appointment.

 

Evaluation of Candidate Persons

 

For the election of its members, the Board of Directors shall post on the Company’s website twenty (20) days at the latest before the General Meeting, in the context of its proposal, information regarding each candidate for membership, on the following:

-The justification of the candidate’s proposal.

-The candidate’s detailed curriculum vitae, including in particular information on his or her current or previous activities, as well as his or her participation in executive positions in other companies or participation in other boards and committees of other legal entities.

-The verification of the eligibility criteria of the candidates for the Board of Directors, in accordance with the Company’s eligibility policy, and, if the candidate is proposed for election as an independent member of the Board of Directors, the fulfilment of the requirements set forth in article 9 of Law 4706/2020.

Diversity Criteria

 

In order to promote an appropriate level of diversity on the Board of Directors and a diverse group of members, the Company applies a diversity policy when appointing new members of the Board of Directors. In addition to adequate gender representation as provided above, in selecting new members for the Company’s Board of Directors, no exclusion is made on the basis of discrimination based on gender, race, colour, national or social origin, religion or belief, property, birth, disability, age or sexual orientation.

 

7. IMPLEMENTATION, MONITORING AND MODIFICATION OF THE SUITABILITY POLICY – EVALUATION OF SUITABILITY.

 

Monitoring the implementation of the Suitability Policy is the responsibility of the Board of Directors collectively. The Board of Directors is assisted by the Remuneration and Nomination Committee, which follows and implements the Suitability Policy within the scope of its relevant responsibilities, organises the annual self-assessment of the Board of Directors based on the above criteria and makes proposals for the alignment of the Suitability Policy with the corporate governance framework, corporate culture and attitude to undertake risk set by the Company, including any amendments to the Suitability Policy. The Company’s Internal Audit unit also assists in this process where required.

The Board of Directors conducts an annual self-evaluation of the Board as a whole, as well as of each individual part, in accordance with the procedure provided by the Company, which is initiated and organised by the Remuneration and Nomination Committee.

The Board of Directors shall record the results of the assessment of suitability and in particular any shortcomings identified between the intended and actual individual and collective suitability, and measures to be taken to address these shortcomings.

 

8. NOTIFICATION / VALIDITY

 

Each person covered by the Policy, upon assuming his/her position of responsibility, becomes aware of the Policy and undertakes in writing the obligation to comply with it and to submit in a timely manner the required notifications to the competent bodies of the Company, in case of events affecting the eligibility requirements.

The Suitability Policy was approved by the Board of Directors of the Company at its meeting of 16.07.2021 and is effective as of 01.09.2021, date of its approval by the Annual General Meeting of the Company’s shareholders, until any amendment by the Board of Directors or the General Meeting, in case of material amendments. Material amendments are those that introduce deviations or that significantly change the content of the Suitability Policy, in particular with regard to the general principles and criteria applied.