Privatization and Corporate Governance in Poland: Problems and Trends

Abstract

The paper is devoted to the problems of the impact of on corporate governance formation in Poland. It discusses the dilemmas of choosing a model for and corporate governance, legal background, mechanisms of corporate governance formation depending on a method applied, and the evolution of these structures in the course of systemic transformation in Poland. The Author comes to the conclusion that the processes of and corporate governance formation in Poland are marked by both successes and failures. The most spectacular success is in the sense which boosted the growth of new private businesses and the share of the private sector in the national economy. Privatization in the sense (ownership transformation of state-owned enterprises) was only a partial success, both in terms of quantity and quality. Some methods of proved to be more permeable, easier to implement for a number of social, political and technical reasons than the others; thus, the progress of was very uneven across sectors, and some of them (infrastructure, extractive industries and some others) remain predominantly state-owned. There were two reasons for this situation: the highly gradualist, consensual character of Polish procedures and the emergence of interest groups not interested in of remaining state-controlled companies. Recently, new trends are seen that can be interpreted as a certain convergence of corporate governance models and a convergence between the effects of different methods in corporate governance and performance of enterprises. Taking this into account, the Author elaborates on whether the how to privatize question still actual and on the feasibility vs. efficiency policy dilemma. In this paper, term privatization is used in a narrow sense. It means transfer of state-owned stock into private (non-state) hands (unlike in the broad sense; i.e., development of the private sector of economy - both through of state-owned enterprises and spontaneous formation of de novo private companies). The OECD definition of corporate governance is used: the system by which business corporations are directed and controlled (OECD, 1999). The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs.