The Balance of Power in Polish Company Code Regulations: An Eastern European perspective on Corporate Governance

Abstract

This article contributes to the ongoing discussion on the normative efficiency of strategic control and the operational oversight of business in public limited companies from the Eastern European point of view, especially since some Polish regulation could be seen as an example of best practice for international shareholders. The article will attempt to answer the question: Using the appropriate legal tools and instruments available under Polish company law, is a balance of power possible within a corporation's bodies? It will consider various aspects of company law such as: the composition, powers and functioning of management boards as well as; the specific position and related duties of supervisors, their conflicts of interest, the role of external auditors, liability, the expected behavior of shareholders and the use of business judgment rules. There are certain factors and underlying forces which determine a divergence of the Polish regulation from that of the celebrated theories in Western Europe. The evidence of empirical observation regarding the type of ownership structure leads to an exceptional legal diversification of the monitoring and enforcement of corporate governance and subsequently allows us to see the advantages and disadvantages of such a system. More than three years after the begin of the economic crisis, it is necessary to review recent evidence and the possible impacts of the forthcoming EC measures on ‘crisis management’.