Poland : Report on the Observance of Standards and Codes (ROSC), Corporate Governance Country Assessment

Abstract

This report assesses Poland's corporate governance policy framework, and its enforcement and compliance practices.It highlights recent improvements in corporate governance regulation, makes policy recommendations, and provides investors with a benchmark against which to measure corporate governance in Poland.The report updates the corporate governance ROSC carried out in 2001.Poland is at an advanced stage of corporate governance debate, discussion, and reform.Since the previous assessment, Poland has adopted new legislation, effectively promulgated a corporate governance code, and continued to develop strong regulatory and enforcement institutions.These improvements have resulted in a corporate governance framework that complies with many of the OECD Principles.The basic minority rights and disclosure framework are in place.Several issues drive the requirements for future reform, including the growing power of pension funds, which are rapidly becoming significant holders of Polish shares.The report identifies several potential problems and remedies, including: insufficient regulation of the corporate governance activities of the pension funds; weakness of the supervisory board; problems in the delisting / squeeze-out process; and insufficient approvals of related party transactions.Policy recommendations are based on Poland's competition with increasingly sophisticated markets in OECD countries, and the need for corporate governance policy to rise above basic minimum standards.At the request of the authorities, this report also includes two detailed analyses of special policy topics: Annex 1 is an analysis of the Warsaw Stock Exchange Best Practices Code and options for compliance, and Annex 2 is an assessment of the corporate governance issues of state owned enterprises.

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